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Started By
Message
When buying a car, is it better to get a loan before going to the dealership?
Posted on 5/15/17 at 6:15 pm
Posted on 5/15/17 at 6:15 pm
I've seen differing opinions and my guess is that it will depend on what the dealership is offering. Looking to buy a Subaru for my wife, and I'm a pretty big noob on this whole deal.
I've looked at my credit union's rates (between 3-4%) and another credit union in town's rates (2-2.75%). According to Capital One, my credit score is 745, and I think my wife's is better.
Just looking for some advice on the best way to proceed. The Lafayette car show is this week so I'm thinking about going see if any deals are to be had.
I've looked at my credit union's rates (between 3-4%) and another credit union in town's rates (2-2.75%). According to Capital One, my credit score is 745, and I think my wife's is better.
Just looking for some advice on the best way to proceed. The Lafayette car show is this week so I'm thinking about going see if any deals are to be had.
9
Posted on 5/15/17 at 6:23 pm to hendersonshands
quote:yes. Shop around. Your credit scored won't get dinged too much if you request multiple auto loans within a certain period of time as it will know that you're shopping around. I recommend dcu and PenFed and of course a local credit union. In the case Penfed you'll have to join an association for a small fee.
When buying a car, is it better to get a loan before going to the dealership?
Posted on 5/15/17 at 6:26 pm to castorinho
quote:
yes. Shop around. Your credit scored won't get dinged too much if you request multiple auto loans within a certain period of time as it will know that you're shopping around. I recommend dcu and PenFed and of course a local credit union. In the case Penfed you'll have to join an association for a small fee.
Thanks. How should I go about trying to figure out how much of a loan to request? I have a general idea about the price I want to pay for the car, but I'm not sure what the final total will be including tax and fees and the settled number with the dealership.
Posted on 5/15/17 at 6:35 pm to hendersonshands
I called my credit union and asked what the going rate was for a certain credit score and went truck shopping. Once I found a truck I went to finance and got their rate at the dealership and it was the same or a little better so I went with it. It actually was the credit union I called before hand.
This post was edited on 5/15/17 at 7:00 pm
Posted on 5/15/17 at 6:47 pm to hendersonshands
Typically, if the dealership beats your best interest rate then you can roll all that in the loan. But for the others you might not be and to,it depends. I'd check with each individually.
Posted on 5/15/17 at 6:49 pm to castorinho
quote:
Typically, if the dealership beats your best interest rate then you can roll all that in the loan.
I guess I'm stupid, but I'm not sure what that means.
Posted on 5/15/17 at 7:21 pm to hendersonshands
Lol. I meant to say that if the dealership offers you a better interest rate after you walk in and you decide to go with their in house financing, they can add the tax and title to it.
Posted on 5/15/17 at 7:24 pm to castorinho
quote:
Lol. I meant to say that if the dealership offers you a better interest rate after you walk in and you decide to go with their in house financing, they can add the tax and title to it.
Yeah, I get that. I'm just not sure how to determine the total amount of the loan I should request from the credit union.
Posted on 5/15/17 at 7:26 pm to hendersonshands
In my case, I used TrueCar to see what the car was going for in my area and added a couple of thousands.
Posted on 5/15/17 at 7:55 pm to Rize
"I called my credit union and asked what the going rate was for a certain credit score and went truck shopping. Once I found a truck I went to finance and got their rate at the dealership and it was the same or a little better so I went with it. It actually was the credit union I called before hand. "
Yeah, basically the same here. Got rates from Credit Union. Then told the dealership if they could beat it, I'd just assume go with them. And they did beat it and took care of the paperwork.
Yeah, basically the same here. Got rates from Credit Union. Then told the dealership if they could beat it, I'd just assume go with them. And they did beat it and took care of the paperwork.
Posted on 5/15/17 at 8:42 pm to hendersonshands
quote:
How should I go about trying to figure out how much of a loan to request?
I would assume you wouldn't take a loan out for the full amount anyways. So just pick out the loan amount you are comfortable with and you will just throw down the difference after negotiation.
I would have any financing in hand so you are not dependent on the car dealership in a negotiation.
This post was edited on 5/15/17 at 8:44 pm
Posted on 5/15/17 at 9:49 pm to Colonel Flagg
Cash cars is where it's at
Posted on 5/16/17 at 4:21 am to gobuxgo5
quote:
Cash cars is where it's at
Are you saying paying cash for cars is the way to go?
Posted on 5/16/17 at 5:26 am to fightin tigers
YES!!!
Posted on 5/16/17 at 5:38 am to hendersonshands
Lightstream from Suntrust is really cheap right now. Brought in their best number a few weeks ago to a dealer and the dealer beat it to get the business.
Posted on 5/16/17 at 5:50 am to Popths
quote:
YES!!!
Curious as to what the rationale is here.
Say I have $30k cash on hand for a car. Your thought is that I get better return using all of that 30 grand on a depreciating asset instead of financing the asset at 3-4% interest?
This post was edited on 5/16/17 at 5:59 am
Posted on 5/16/17 at 6:04 am to fightin tigers
Why would you finance a depritiating asset??? So dumb. Instead, you should dump all your liquid cash into the same depreciating asset. Much more intelligent. :sarcasm:
I am typically a sucker for low rates at dealerships. Just bought 2 vehicles in the last 6 months and got 1.9% at both. I walked out of a financig office because of a better offer, but the fact that they could only show me my note at 8% until I signed the paper and they re-ran it with my 830 credit score was the nail in the coffin. Tried telling me I surely qualify for better and that it'd be like 30 bucks different a month, but wouldn't get the hard number. Walked out. I guess my point to the OP is that I've never shopped for good rates all that hard and it's worked out as long as I had decent credit (didn't always have an 830....mid 700's). If you have patience, all makes do financing deals regularly. I went across the interstate that day and had financing figured out in 10 minutes at a great rate.
I am typically a sucker for low rates at dealerships. Just bought 2 vehicles in the last 6 months and got 1.9% at both. I walked out of a financig office because of a better offer, but the fact that they could only show me my note at 8% until I signed the paper and they re-ran it with my 830 credit score was the nail in the coffin. Tried telling me I surely qualify for better and that it'd be like 30 bucks different a month, but wouldn't get the hard number. Walked out. I guess my point to the OP is that I've never shopped for good rates all that hard and it's worked out as long as I had decent credit (didn't always have an 830....mid 700's). If you have patience, all makes do financing deals regularly. I went across the interstate that day and had financing figured out in 10 minutes at a great rate.
This post was edited on 5/16/17 at 6:04 am
Posted on 5/16/17 at 9:10 am to KG6
Thanks for all the information guys, it's all helpful.
Posted on 5/16/17 at 11:49 am to hendersonshands
Just got a 2017 Acura tlx for 0.9%
Love it. Definitely shop around and know your stuff.
They won't screw with you if you take charge and know what's up.
Love it. Definitely shop around and know your stuff.
They won't screw with you if you take charge and know what's up.
Posted on 5/16/17 at 12:22 pm to fightin tigers
quote:
Say I have $30k cash on hand for a car. Your thought is that I get better return using all of that 30 grand on a depreciating asset instead of financing the asset at 3-4% interest?
In that case, at least in nominal terms, you'll only come out "ahead" if your cash on hand is earning something greater than 3-4%.
Since most new cars depreciate (outside of exotics or specialty vehicles), it's almost impossible to really come out ahead. The best that you can do is soften the blow. So yeah, it's generally better to use low earning cash rather than a higher rate loan.
ETA: I just saw that the OP is looking at a car brand (Subaru) that has a relatively high resale value and a relatively low longer term cost of ownership. Good choice, IMO. If he can find a low enough interest rate and also drives the car until it dies (which will be a long time with a Subaru), I figure he'll be more than OK financing it. People who like to trade a lot are the ones who typically get whacked.
This post was edited on 5/16/17 at 12:26 pm
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