New Car - Where to get the loan from?

[halfgeek]

Hey,
I've been working since last July. I want to get a 2007 Honda Civic in January mid. I can make a down payment of 5k.
I want to know where to get a loan for the rest. Is it from the dealer or from a bank.
My credit score is like 715. I just have one citi credit card. I just moved to Florida from Cali.
I want to clear the loan payments soon.
Please advice me about where to get the loan from. And any other suggestions welcome.
thanks!

[pearlieq]

You can use www.bankrate.com to check auto loan rates in your area.

It's usually better to go into the dealership with the financing already arranged. That way you're not dependent on them to help you pay for the car and you can control all of the terms of your loan.

In general (and there are often exceptions) credit unions offer better terms and rates than banks, so make sure you don't forget to check them.

[disneysteve]

What I've done in the past is to find the best rate, as pearlieq suggested, then go into the dealer with that info in hand. Each time, their finance person matched the offer. It was just simpler that way to handle everything in one place.

Remember, however, that you should first negotiate the price of the car. Don't tell them about your downpayment. Don't tell them about a trade-in. Don't tell them how you plan to pay for the car. Don't tell them where you will be getting your financing. Until you have agreed on the price for the vehicle in writing, you should not discuss the financing at all.

[rob62521]

Disney and Pearl are correct. Negotiate and don't let them know what you can or cannot do. We have found the best rates around here are from a credit union. As they said, do it before you negotiate.

[halfgeek]

Wow! thanks a lot for your suggestions.... U people rock!

I found in bankrate that eloan has 6% chepeast.. Whats ur say about him. What is refinancing?

Also, I'm planning on Honda Civic coz its economical in long run... Should i go for hybrid in that or any other car...

I'm 25 year guy currently earning 55k and would go up 80k in two months.

[sakigt]

Originally Posted by halfgeek

Wow! thanks a lot for your suggestions.... U people rock!

I found in bankrate that eloan has 6% chepeast.. Whats ur say about him. What is refinancing?

Also, I'm planning on Honda Civic coz its economical in long run... Should i go for hybrid in that or any other car...

I'm 25 year guy currently earning 55k and would go up 80k in two months.

Unless youre doing it aimply to be green (and some argue a hybrid is worse for the environment) the advantages of buying a hybrid are hard to recoup.

Now if you can haggle them down thats a different story!

[Hot dog]

Sometimes the dealers have good rates When I got my honda it was 3.9% brand new You will get better interest rates on a new car usually. Somehow about two years ago I got a used car and the dealer found me a loan at 3.9 for a used car It turned out to be at my own bank and I had seen no such offer myself. The salesman seems to work hard to find you a good deal if they know that is what you need to seal the deal. Hondas often don't lower their rates as often but the last couple years they have had pretty good deals. Maybe they will have them for the new year Good luck!

[Raisecapital01]

I would try your bank first. Negotiate with the Dealership on the pricing first, and then take those figures to your bank. You would be able to get a lower interest rate. Better yet, if you belong to a credit union, you may be able to get the difference from them.

[doodles44]

I got my car loan from Capital One Auto, it was a very good rate for a new car, but I would imagine the rate has increased since then. I purchased my car in 2002.

Capital One is very convenient - I would recommend it!

[MarianneJ]

My credit union is always having specials on car loans. For instance, when I bought my new saturn in 1999, they were running a "Bring Your Car Loan Home" special - if you transferred a new car loan from another lender they would reduce your rate by 2.5%, so I financed my car thru the bank with the lowest rate (8.1% at that time) and then applied to the CU to transfer the loan, so I only paid 5.6% on my loan (which was extremely low for that time period).

Another example, my sister just bought a new mustang this summer. The CU special at that time was a reduction of the loan rate from 0.5% to 3.0% based on your credit score. Because her credit score was in the highest tier, she now has a new car loan at 2.0%!

It is definitely worth it to look around at all the banks and credit unions around you and ask about loan specials they may be offering now or starting in January. Good luck!

[MonkeyMama]

I was going to say dealers have good rates if you are going in brand new. BUT definitely shop around...

[halfgeek]

thanks a lot....

My doubt is, If i check around different places for rates... Guess, they would be doing a credit check and that would affect my credit score again... right?
Or, is there any way to get the rate without affecting my credit score?

[MarianneJ]

You can get their range of rates, then figure you will get a little higher than the lowest one - usually the lowest is for scores above 730, I think. They'll only run your credit after you fill out an application...which you will only do when you are certain you've found the best rate.

[instantinfo4you]

Yes. Once you have found the best rate, then they will check your credit score. You don't want everyone doing it though. That wouldn't be good.

[disneysteve]

Originally Posted by instantinfo4you

Yes. Once you have found the best rate, then they will check your credit score. You don't want everyone doing it though. That wouldn't be good.

Actually, multiple credit inquiries of a similar type in a short period of time don't count against you. The credit bureaus consider them all as one draw. They understand that people shop around for the best deal.

[rickatheslicka]

I used e-loan just to estimate the best rate I could qualify for, and the dealer worked his tail off to match it (two years ago, 3.9% on a used car, just like Hot Dog).

However, for a new car purchase, you might have to choose between incentives like $2000 cash back OR 1.9% financing. It can be helpful to crunch some numbers beforehand. For example, figure out if taking the 6% loan from the credit union and the $2000 cash back is the better deal or if taking the 1.9% financing is the better deal. There are lots of online calculators, or you can use Excel if you're savvy with writing formulas.

If you get 1.9% (or whatever great rate you can find), you might even want to hang onto your $5K and put it into a savings account earning 5%. Then if your new car gets a flat tire or some other mishap occurs, you're covered. Just be sure you really put it into savings...

Here is a link to a podcast (internet audio series) on buying a car that I found really helpful. It's kind of long, but they share a lot of great tips. You can listen to it on your computer, you don't need an iPod. Good luck!

http://www.mywealthmatterspodcast.co...-your-next-car

[halfgeek]

My fico score is 738. Should i try at eloan or Honda Financials.
Somebody was talking about some refunds cash back.
Should i make a down payment? Would it help. I can upto 5k.

[sweeps]

Your best bet is almost certainly going to be the dealer. We got 0.9% on our Honda Civic.

Having said that, make sure you keep car price and financing terms completely separate in your discussions. Don't negotiate on the monthly payment -- it's a trap.

[cschin4]

I see nothing wrong with taking the loan at the dealership. They usually have very good rates and many are offering very low interest rates that you won't get at the local bank. Since you are looking at a new car, you should check out the Honda website to see if they are currently offering any finance incentives. You can check the bank as well but I doubt you will get any better deal from them.

[rickatheslicka]

Really low interest rates and cash rebates are incentives periodically offered by the manufacturer. You want to know about these before you show up at the dealer.

In addition to the manufacturer's website, you can check out www.kbb.com (kelley blue book) and www.edmunds.com to find out the MSRP and any incentives being offered for the car you are interested in. Ideally, you won't pay much more than the MSRP for the car, sometimes you can even get them to go below MSRP. Unfortunately, it doesn't look like Honda is offering any incentives on Civics.

My advice is:

1) Figure out what the best rate you would qualify for by visiting the e-loan website (don't submit an application). With your credit score, the dealer will almost certainly be able to match it (or do better if there is a low interest rate incentive being offered). I didn't have any proof with me of the e-loan rate, all I said was, "I can get such-and-such with e-loan." and the dealer matched it. FYI, Captial One is offering 5-6% loans on new cars right now.

2) Go to the kbb and edmunds websites, look up the car you are interested in, and print out the prices (including the various trims and options, the sites have some very nice matrix-type charts). Take this with you to the dealer, they will know you mean business.

3) On these websites, there is usually a link to "get a fast dealer quote." This is a good idea because it puts you in touch with the "internet sales manager." The ISM will know you are an informed customer and will skip most of the haggling. They also seem less "sharky" than the floor sales guys, IMHO.

4) Get quotes from at least 2, ideally 3 (or more?) dealers. Play them off each other, or just go with the lowest quote. You may need to email or call regularly, or you may need to visit in person a couple of times to get all of the details (price, model, options, etc) worked out.

5) Once you have settled on a vehicle and the final price, the ISM may pass you off to another person to seal the deal, and pile on the extras. So, decide well in advance if you want an extended warranty, Lo-jack anti-theft system, etc, etc, etc. Otherwise, when all you're thinking is "What if something happens to my beautiful new car?" - you may get suckered into agreeing to thousands of dollars of extras, completely nullifying all the hard work you did to negotiate the price down.

6) On other thing, don't forget to arrange for car insurance in advance. Call around and get quotes on that, too. You may need a VIN number to get a quote, don't worry if it's not the exact car you ultimately end up buying, you just need it for the quote. Once you've settled on the exact car, tell them the real VIN number, and have them fax the ins card to the dealer so you can drive away with your new car.

Good luck!!!

P.S. As far as your downpayment, with your credit score, you probably won't need the DP to qualify for a good rate (but read the fine print on the eloan and Capital One sites to find out for sure). So if you get a good rate, then it is really up to you whether or not you need to apply the DP to lower your monthly payments to a comfortable level, or if you want to use it as an emergency fund, or invest it in a retirement fund - whatever you are most comfortable with. If you think you will blow it, then by all means apply it to the car purchase.