Which financing?

[jpg7n16]

Buying a car next week. I'm financing $7,000 of the $15k purchase. My CU offered me 3.5% for a 36 mo loan. Payment would be about $200/mo and the total interest would be $384 over the life of the loan.

Yesterday I got some of those promotional checks in the mail from my bank. They are offering 0% til Dec. 2013 or .99% until March 2014 with a 4% fee. If I were to borrow the money from them instead, I could borrow the full amount for $280 over 15 months.

Not a huge savings, but is there any reason I shouldn't use the bank checks instead of the financing from my bank?

Yes. There's a big reason. You are comparing the interest from a 36 month CU loan, vs a 15 month bank loan. That's not a proper comparison. If you want to evaluate it, compare a 15 month bank loan vs a 15 month CU loan.

On a 15 month basis, you would only pay $164.44 by going with the CU 3.5% loan, and paying it off early.

That's almost half the bank loan over an equivalent timeframe.

[snafu]

I too feel you need to re-check with the CU explaining the promotional offer and asking their rate for a 15 month loan. It would require higher monthly payments that you seem comfortable absorbing. What is the KBB price for your high mileage car from a private seller?

[riverwed070707]

What car is it that you're paying $15,000 with it having over 100,000 miles?

I too feel you need to re-check with the CU explaining the promotional offer and asking their rate for a 15 month loan. It would require higher monthly payments that you seem comfortable absorbing. What is the KBB price for your high mileage car from a private seller?

It's a truck. Ford F-150 Larait. It books private party right about what we're paying but he's throwing in a bunch of extras including an extra set of new tires.

[maat55]

Great rate. Unfortunately I just spent 30 min on teh phone with them opening an account only to find out my car purchase doesn't even qualify because they won't finance cars with mileage over 100k That was a huge waste of time.

Think I'll stick with my CU. Thanks for the input.

You're paying 15k for a car with over 100k miles? Sounds like something I would have done in my teens.

[riverwed070707]

You're paying 15k for a car with over 100k miles? Sounds like something I would have done in my teens.

Well good for you for being so superior to me you can buy new cars now. I on the other hand am happy to pay $15k for a perfectly good used truck than to pay $38k off the lot. Buying a work truck isn't like buying a commuter car where you can get barely used for cheap.

[FireBal989]

It's really up to you, if you use the bank check, you know you're getting an excellent rate regardless, and you're saving money, but you're going to have to pay the interest even if you pay it off early. It sounds to me like that may be the best option here, as if you are paying off the loan for the duration, you'll get a better deal that way :-)

[cypher1]

You're paying 15k for a car with over 100k miles? Sounds like something I would have done in my teens.

If the car is worth more on KBB and street value, whats wrong with that price for age/mileage? A friend just bought a 06 Lexus GS300 with 90k for mileage for $16k. While the car is mint, and was clearly a want than a need, it was something he was looking for. It didn't hurt that his background was of a mechanic. I'm must saying mileage isn't everything. I'd be more concerned of how the previous owner took care of car, and if they kept up with maintenance/repairs.