Home     Forum     401k     401k Rollovers
    Register   Login   Members   Search   FAQs     Recent Posts    




What's the lowest auto loan rate you got approved for?

Reply to topic
Money Talk > Credit & Loans

Author Thread
Kimberlie Broe
Full Member


Cash: $ 18.20

Posts: 83
Joined: 07 Jul 2014

What's the lowest auto loan rate you got approved for?  Reply with quote  

Hi everyone. My sister's planning to get her very first car. She's been working for 5 years in a local publishing company and she's thought about it a lot. Was wondering if you know of any banks that offer low loan rates? Or is she better off with a credit union? Would appreciate your help a lot. Thanks!
Post Sat Apr 23, 2016 2:41 pm
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 722.20

Posts: 3513
Joined: 21 May 2006
Location: arizona
 Reply with quote  

Point out to her that the dealer rates can be whatever the customer chooses. They usually have a matrix - eg, 0.9% loan goes with a $3000 price adder
A 1.9% loan goes with a $1000 price adder, and so on.
The result is that the dealer receives ab out the same amount of money, no matter what the customer chooses - some customers are highly interested in a low rate deal, others are interested in a low price (cash buyers).

Remember, dealers don't have a magic source of cheap money to lend, they have to pay whatever the bank rate is, same as anyone else. So if they "give" you a 1.9% loan, the are really paying the bank 3% or 4%, thus the adder.

I normally separate the financing from the car buying - I negotiate the lowest car price first - and then get a credit union loan. (Credit unions are normally slightly cheaper than banks).
Post Sat Apr 23, 2016 3:27 pm
 View user's profile Send private message
Kimberlie Broe
Full Member


Cash: $ 18.20

Posts: 83
Joined: 07 Jul 2014

 Reply with quote  

Thanks for your suggestions, oldguy. I emailed a screenshot of your comment to her and she thinks it makes a lot of sense.

She's getting a Honda Civic for her first car and planning to get an auto loan with a 3 year term from a credit union instead of a bank. She got in touch with her bank the previous month and the rates were outrageous compared to the auto loan rates offered by her CU in SF.

Hoping she gets approved since her FICO score has not gotten anywhere below 612 for the past 4 years Smile
Post Fri Apr 29, 2016 1:52 am
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 722.20

Posts: 3513
Joined: 21 May 2006
Location: arizona
 Reply with quote  

Good choice, the Hondas reliably provide 200,000 miles of trouble-free service. (I'm about to get a new Pilot).
She might be happier with the 5 yr loan, the 3 yr payment is about $625/m, the 5 yr is $380/m - much easier to manage w/o such a stretch. And the rates are so low that she will be getting almost-free use of money. (I normally get the biggest lowest cost loan that I can - and then leave my own money invested in the SP500)
Post Fri Apr 29, 2016 1:28 pm
 View user's profile Send private message

Reply to topic
Forum Jump:
Jump to:  
  Display posts from previous:      





Money Talk © 2003-2016