07-28-2020, 10:12 AM | #43 | |
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Drives: '20 2SS Convertible 6MT Join Date: May 2020
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There's a HUGE difference between "buy here, pay here" financing (what is truly a "dealer loan") and loans secured through a legitimate lender that are "brokered' by the dealer (you fill out a general loan app at the dealership and they shop your loan to various banks). The former should be avoided at all costs. They are huge rip-off's financially. The latter seldom will have penalties for early repayment. Credit Unions are 100% -NOT- the panacea that so many people claim them to be. As mentioned before, I have only gotten a better rate from a credit union ONCE than I did from any other lender when buying a car. And, honestly, I was quite surprised that I got the rate that I did as the manufacturer was already offering reasonable rates for their CPO cars. If you are shopping for a loan based on the rate, Credit Unions seldom have better interest rates than banks if you have a high credit score (over 700-725). Sometimes they have better rates if you have a significant amount of money on deposit with them. |
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07-28-2020, 08:43 PM | #44 |
Drives: 2021 Camaro LT1 Conv Join Date: Oct 2016
Location: Texas
Posts: 197
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Credit Union’s are great if you are building your credit but you will consistently beat their rates if you have established credit.
Beginning of 2016 when I purchased my 2016 Mustang GT, Capital One gave me a 6 Year @ 1.95% with $2,000 down. Had just under a 700 credit with each major credit agencies back then. Summer 2020, around 750 now, yet they only offered a 6 Year @ 3.98% with $2,000 down. If GM Financial offers another 0% type promo when my 2021 Camaro is delivered in October, I would more than likely go with them this time around versus my bank Capital One. In other words, it varies who has the best rates. |
07-28-2020, 09:34 PM | #45 | |
Drives: 2018 1SS M6 Join Date: Nov 2014
Location: Houston
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Financing through a dealer, especially if you have Tier 1 credit can be beneficial to you. First, the dealerships have contracts with several lenders. Whereas, if we, the customer, go to our own bank, we are going to get a rate that is profitable to the bank. The only thing a bank does is sell money. However, a dealership has more bargaining power with lenders because dealers generate more business for them. There is truth that a dealership can bump the rate up to 2 points. However, how that really happens is not that raise your rate, they negotiate with the bank to lower the buy rate for the dealer. This is why many people show up with pre-approval from their bank at 3or 4% and the dealer gets them out of finance at 2.5 or 2.9%, from the same bank. The dealer negotiates the buy rate down. Sure, dealers are out to make money, they are not 501c operations, and neither are the banks. |
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07-29-2020, 06:49 AM | #46 | ||
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07-29-2020, 07:41 AM | #47 | |
Drives: 2018 1SS M6 Join Date: Nov 2014
Location: Houston
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On that loan, you have a contracted monthly payment. Anything you pay over and above that amount on any given payment goes directly towards principal. |
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07-29-2020, 08:27 AM | #48 | |
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07-29-2020, 09:05 AM | #49 | |
Drives: 2017 Camaro 2.0T, 91 Miata Join Date: Jan 2020
Location: Raleigh, North Carolina
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07-29-2020, 09:16 AM | #50 | |
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If I am able to pay more than the scheduled amount, or can pay ahead of time, I don't. Instead, I put that money into a savings account with a higher yield and let it work for me. As long as the interest rate that I am earning is either better than, or only slightly less than, the interest rate of the loan, putting that money away helps me to build a financial cushion should I need it during the course of the loan. Once I have enough money saved up from doing the above to where I can pay the loan off in full, I do so. And remember: If you ever have to choose between making a car payment or paying rent, make the car payment. You can live in your car but you can't drive your house. lol |
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07-29-2020, 09:18 AM | #51 |
Drives: 2019 2SS 1LE Join Date: Mar 2020
Location: Florida
Posts: 282
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Called GM Financial 2 weeks ago, paying $110 over min to have neutral/positive equity faster to refinance with someone else, asked if my account could be set up so that any payments over the min goes towards the principal and they told me "nope, every time you pay over the min, you have to contact us to inform us of this so we can make sure it goes towards to principal"
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07-29-2020, 09:22 AM | #52 | |
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Drives: '20 2SS Convertible 6MT Join Date: May 2020
Location: CT
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07-29-2020, 09:29 AM | #53 | |
Drives: 2019 2SS 1LE Join Date: Mar 2020
Location: Florida
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If you mean if paying more reduces the amount of interest rather than paying the car faster, then it does, I'm pretty sure there is someone more experienced than I am that can give you an explanation that's not an overly gross simplification. $1000 loan, $200 payment, $100 goes towards interest, $900 left and you get charged interest in this $1000 loan, $200 payment + extra $50, $100 goes towards interest, $850 left and you get charged interest in this Or something among those lines, either way, compounding interest is annoying, just playing the same amount split bi-weekly means you will pay less interest over the life of the loan.
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Current: 2019 2SS 1LE aka "Blanc"
Previous: 2017 2LT aka "Noire" Mods: Chevrolet Performance Suspension || K&N Cold Air Intake || Borla ATAK Mufflers + Catback system || MRR 650 ZL1 replicas with squared 285/30 Michelin Pilot Sport 4S || ZZP 4 piston brake kit + braided brake lines || BMR everything (Solid/Lockout cradle bushing are a MUST in Camaros) |
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07-29-2020, 09:33 AM | #54 | |
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Drives: '20 2SS Convertible 6MT Join Date: May 2020
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In your example, you are assuming that the extra $50 is paid toward principle. From your previous post, some lenders do not do this automatically and apply the money directly toward your "next payment" amount. Unless that money is directly credited to the principle amount, it very well may NOT reduce your overall interest liability as it will not slow down the rate of compounding. |
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07-29-2020, 09:40 AM | #55 | |
Drives: 2017 Camaro 2.0T, 91 Miata Join Date: Jan 2020
Location: Raleigh, North Carolina
Posts: 505
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07-29-2020, 09:56 AM | #56 | |
Drives: 2018 camaro 2ss Join Date: Nov 2018
Location: Riverside CA
Posts: 93
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Very well put! Been at a chevy dealer for years and yes we consistently get the same or better rates than when people come with pre-approvals. Banks reach out to us and let us know when they're willing to get more aggressive on loans since they haven't been receiving as many as usual. We call them and let them know to match or slightly beat your rate and they usually give us a small flat fee. It's a win-win |
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