In this pit thread I am lamenting my recent loss of a car, and the woes of getting a new car (well, new used car.) I found a car I really like (well, I like what it is and how it looks, looking at it in person tomorrow to test drive.) Since it’s being sold by a dealer, I can get on the spot financing, but I know it will be a higher APR than the loan I could get from my credit union, but faster, and the faster I can get a car, the better.
So I figured if I really like the car, I’ll do the on-the-spot loan thing, and then also start the process of applying for a loan from my credit union. Assuming they give me a better rate, I’ll then just take the amount they pay me and fork it right over to the owner of the first loan. The only problem I see here is that I imagine both loan companies are going to want to have the title, right? But maybe I can tell my credit union to fork over the money to the first loan company, and they’ll just give the title to the credit union?
I’m guessing this won’t work, but I figure I’d see if the more money-knowledgeable dopers could confirm or not.
Make sure there is no penalty for early payment on the first loan.
Watch the loan “origination” fees.
If they are charging you anything to get the loan (and they may roll this fee right into the loan in the hope that you don’t really notice it) then you’ll be losing this on the payoff.
I’ve always had really good luck with credit unions.
Why not just talk to them tomorrow? Shouldn’t take very long to get approved for a loan.
Another thought. Can I just have the auto place do my loan for speediness, and then at a later date (maybe after making one payment or something,) do a “re-finance,” or whatever the word is, and just transfer the loan to my credit union? Lenders can do that sort of thing, right?
You can re-finance an auto loan, although I have never done it. Getting the loan from the Credit Union shouldn’t take that long, though. I don’t really understand why you can’t just do it through them to start.
Refinanced from 8.5% down to 5%. Not sure what all I had to fill out, but IIRC it wasn’t much. Your bank probably has access to your credit report and can probably get lots of the information they need from there.
Just go to the credit union and get the money. Unless you have real bad credit they should give you the money right away. I did this about six months ago for my car.
I’m a loan officer at a credit union, have been for nine years.
You can refinance it as soon as you want, basically. As soon as the other finance company has record of your paperwork, you can pay off the loan. The longer you wait, the more interest you pay at the higher percentage.
Do watch out for those “origination” fees. They may charge you an application fee and several other fees that your credit union will not, or if they do, will be at a much lower cost.
DON’T buy at a buy here / pay here place. Their vehicles are overpriced, becuase that’s the name of the game. Sell an overpriced vehicle at rediculously high interest rates, and by the time that you default, they would already have gotten their money back of their original cost of the vehicle. Plus, they can repo it, and resell it back on the lot. It’s a win-win for them.
Watch what guide you use to figure out the vehicles value. Ask your credit union what they use to determine value. We only use NADA because it is lower than edmunds or KBB. Whatever you choose to use, don’t use it in any bargaining point for the purchase of the car; i.e. “Nada says this car is only worth xxx”. They will always find a way to counter whatever your objection is.
If your credit is good, the dealership might let you have the car if you pay the down payment and execute a loan application. They (might) agree to delay implementation of the loan while you get a loan elsewhere. I did this and it worked out fine, but YMMV. You need to trust them and dealerships aren’t what come to mind when you mention trust.
Get pre-approved from your credit union and find out what rate they can give you.
While negotiating the price on the car be clear that you have set up your own financing so they don’t play any games with you on car price/payment/rate. Make it so all you are negotiating is the price of the car.
Once you have settled on a price for the car and have it set in stone tell the dealer “My credit union is giving me X% interest rate for 4 years. I’d be willing to finance with you if you can beat that.” More than likely they can and will beat it.
Is this a real dealership, like one affiliated with a major car brand? If so, they may already have contacts with your credit union. Many legitimate dealerships have access to various credit union networks, and they may be able to get you a loan through your own CU at the dealership itself.
This may be true, depending on the size of your credit union and if they participate in indirect lending. If they are a smaller credit union or deal only with a particular group of individuals (a “seg” group) they may not do indirect lending. Indirect lending is the largest cause of delinquency at a credit union due to dealers trying to squeeze someone into a program for which they don’t belong.
My gf bought a used truck ($12 k) last year. Her credit is great. They let her take the truck that day, no money down, then she got cash from her credit union and paid them 5 days later. This is in a small town, and she purchased from them before.
In my experince smaller credit unions have a loan committee that typically only meets once a week. For that reason it often takes several days longer to obtain a CU loan. I think you’d be wise to not rush your purchase. This old saying is often applied to marriage, but it’s true of many things we do, “Act in haste, repent at your leisure”.
We did this. Got the dealer loan, applied for the credit union loan. Paid off the dealer loan and I have no idea how the paper changed hands, but it was painless. I think people do this all the time. They’ll know how to handle it.
Since it’s a used car, this may not be an issue - however, if you were buying a new car, then trying to refi with the credit union, the CU might consider it a used car then, with a higher interest rate (ours at one point had different rates for used vs. new).
When we’ve bought cars (new) we always arrange the financing through the credit union. We usually pay our down payment to the dealer, and sign a promissory note saying we’ll pay some insane interest rate (18% or so) if we haven’t brought them a check within, say, 72 hours, for the balance. That gives us time to get the paperwork squared away with the credit union and get the check from them.
I have refinanced car loans - my first loan, in 1982, was at an exorbitant rate (17%?). I refinanced it a year or so later for 14%.
THe car dealers can, and will, mark up the loan. They arrange it through, say, Megabank at 6% and add their markup of a percent or more, which increases their profit. It’s quite legal to do so, also. So I’d be very hesitant to finance using the dealer’s financing folks. We bought a car once, and had the credit union financing already sorted out and told the dealership that. They still insisted I talk to their financial people. The fellow I spoke with said “no way we can match that, yep, finance through your credit union”.
When I bought my current car I was probably a little bit too hasty in signing for it and getting financing through the dealer. After I looked through the paperwork more I realized I could get better financing for my bank. (I never said I was good with money.) I lined up the paperwork with the bank and called the dealership to get the info for paying the loan off right away because I was getting a better rate at my bank. They asked me what the rate was and then asked if they could check something and call me back in an hour. Half an hour later they called back and told me they could reduce my rate to ~0.25% less than the banks offer if I stayed with their financing. All I had to do then was go to the dealership and sign a piece of paper authorizing them to change the loan to the lowere percentage and I was set.
Well, the other guys insurance, mine wasn’t involved at all. At any rate, my dad is nice enough to let me borrow his truck for a while longer, so I can take my time. The car I kind of wanted at one place I looked was in much worse condition than the pictures showed. Lots of smaller scratches and dents, and when I went to unlock it to take it for a test drive, the internal lock cylinder broke and came out! And, since there was a feature on the VW where the windows roll down if you turn the lock a certain way, and the broken lock triggered it, the windows rolled down, and the buttons on the inside wouldn’t roll them back up! Good grief!
I did find another VW at the same lot I liked, though, but now I’m suspicious of these dealers.