| What's the lowest auto loan rate you got approved for? |
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Kimberlie Broe
Full Member
Cash: $ 19.60
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Joined: 07 Jul 2014
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| What's the lowest auto loan rate you got approved for? |
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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!
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Sat Apr 23, 2016 2:41 pm |
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oldguy
Senior Member
Cash: $ 751.85
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Joined: 21 May 2006
Location: arizona
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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).
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Sat Apr 23, 2016 3:27 pm |
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Kimberlie Broe
Full Member
Cash: $ 19.60
Posts: 90
Joined: 07 Jul 2014
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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 
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Fri Apr 29, 2016 1:52 am |
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oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona
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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)
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Fri Apr 29, 2016 1:28 pm |
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