Good info, thanks. So I have a little pre-shopping homework to do.
[ol][li]Go to a bank and see if you can refinance.[/li][li]If you tell a sales rep that you won’t pay more than 3% and he offers 4.99%, the correct response is not to start arguing about what your credit score should be.[/li][li]If the sales rep offers to call the bank and get a sweetheart deal, the correct response is “sure, as long as it’s 3%.”[/li][li]If 3.15% is the absolute best they can do, the correct response is “OK, thanks for your time” and leave. [/li][li]They will try to get you to sign by offering something else - free floor mats, 3.1%, whatever. The correct response is to say “Get back to me when it’s 3%”. [/ol]They will either get back to you with 3%, or they won’t. If they do, great. If they don’t, go to another dealer and say “Another dealer is prepared to give me 3.15%”. [/li]
Regards,
Shodan
Rule 0: Walk out the door the minute you start getting played. Don’t let anything stop you until you are at your car ready to drive away, then tell the salesman who followed you he has one - ONE - more chance. Hold him to it and don’t come back the second time. Or the first, really.
Any time the salesman starts drawing four-way grids or trading one number against another or only discussing two of the numbers, you’re being played. The numbers are simple and speak for themselves. When the salesman gets up to “check with the manager,” you’re being played. When the salesman tells you you can’t have something you’re pretty sure is optional or unconstitutional, you’re being played. In the end, it’s just a simple purchase and there should be no restrictions or requirements that aren’t self-evident and obvious.
Walk out. When they get down to “You wasted all this time!” just say, “Well, neither one of us had anything better to do, right?”
What do you mean by $500/yr for the financing? A typical amortization schedule for $50k at 3.15% for 5 years would be about $120 per month in interest for the first year. Or is the $500 for something else?
Moderator Action
Since this is looking for personal experiences, let’s move it to IMHO (from GQ).
The dealer wanted 51,800 - I ended up paying 41,200 @ 3.15% and 72 months. My amoritization schedule shows a total interest paid at $4,069.86 is $678.31 per year. I had forgotten to add the “lifetime warranty” in the calculations and shot from the top of my head so I stand corrected :smack:
Thanks for clarifying that. That makes more sense anyway to consider the interest per year over the life of the loan rather than just the first year.
For my credit union, I merely completed their auto loan application, indicated New or Used and how much I needed. After a bit of in-person paperwork they essentially gave me a blank check, on which it was clearly noted “Not to exceed $XX,XXX” which was the max amount I was approved for. I took the check to the dealer, picked out a car, filled out the check, and drove home in my new car.
They did make me talk to the dealership finance guy, and he did actually find me a loan with a marginally lower rate, but I stuck with my CU because it was really just a bridge loan for me and I really didn’t care about the rate.
It would underscore for me the person I was sitting across from is open about lying for their own benefit (if I didn’t already suspect that when I walked in) and trust them accordingly.
I’ll add to the pile-on suggesting you refinance immediately; the only thing you got out of this deal that you wanted is the truck itself and its warranty; they’re making up the difference in the interest you’ll pay.
Have you already checked to see if it’s one of the Rams that have emissions cheating codes?
But is that total interest also their total? In my experience, they frontload interest heavier that a simple amortization would indicate [Rule of 78ths, I think]. Doesn’t seem right [Rule of 78ths], but that’s the way it is.
This last time I did do dealer financing, because I had a family friend in the car business work me out a damned good deal but I had to agree to take the dealer financing (and not take the cruise.) Okay, fine, sure. It was a RIDICULOUS rate. A total ass-rape rate. I forget what it was but it was two digits. Fine, sure, I’ll sign on the dotted line… three months before I have to pay anything? Sounds great!
At the end of the three months I walked into my credit union, refinanced with them - the fee was like $17.50 for the DMV stuff. I’m paying 2.something and my credit is not spotless by any means.
I am surprised to hear so many of you state that 3.15% over 72 months for a used car is a bad rate that I should refi immediately. I came into the deal desiring 3.0%.
I completely agree that 3% for a new vehicle would be less than stellar with all the 0 for 72 offers going, but are you suggesting that 1-2% for a used car is likely?
How did you decide that three percent was a good rate without having shopped around to see what you could get elsewhere?
The last time I bought a new car, the big deal was just called “Extended Warranty”.
Like all “Extended Warranties”, it was 100% profit for the seller.
I told him “No” 3 times. After the third, I looked him straight in the eye and said: If you mention that one more time, I am tearing up this paperwork and driving out in the same car I drove in".
He decided not to push it.
New car salesmen are the best of the retail salesreps - they make good money by NOT showing you what is really going on. Everything you saw and heard was a prop carefully designed by people who know how to make sales.
p.s. - when he "takes it to the Manager to see if he can make you this incredibly great deal, it means he needs a cigarette. If he doesn’t have authority to make a sale, find somebody who does.
The last time I bought a car, I tried walking, uninvited, into the “back room” where the manager supposedly sits. I was given the Glare of Death.
When I was negotiating the post Z Plan price on my Escape I was told my offer was rejected by the ‘vice-president of the dealership’ (a random guy who had stepped in to help the salesman). I couldn’t stop myself from bursting out w/ a laugh in the cubicle.
I bought another truck this week. My credit is decent but my income to debt ratio is off due to a morguage that I’m still a responsible party to but have an agreement in which I’m not making payments.
New Ford commercial registered truck, Ford dealership offered 5.25%(Ford finance) to which my response was no way, they said they’d try other banks and came back with 3.75%. I told them no and got a loan from my own bank at 2.99%
Really I just don’t believe anything car salesmen tell me. It could be a scam, it could be they’re incompetent, the reason is irrelevant.
I find none of them are good at the job I want them to be good at, which is knowing the technical aspects of the product they are selling. Instead they are practiced in selling people cars for more money than nessesary.
Tired and Cranky pointed out the issue of fraud. Otherwise, they don’t have to use any particular credit rating system, they don’t have to lend you money at any particular rate, or lend you money at all if they don’t want to. You can discuss financing with a car dealer if you like, or just save time and go to a real bank because you have little chance of getting the best deal from them.
I once saw a sign in a VERY low volume shop (aircraft electronics - avionics).
These things ran about $1000/inch when installed in the “stack” in the panel. 20 years ago. See: Avionics | Aircraft Spruce
The sign read:
“One more ‘Great Deal’ and We’ll be Out of Business”.
That building, the pavement, the lights, the tools - all of it paid for by your contributions to their income.
“A good salesman can sell anything” is a common belief. Expecting a salesrep to know the inside of a product is hoping against hope - all the salesrep wants to know are the buzzwords used with this particular box.
Right; we like to think that b/c there’s such a thing as a numeric credit score that there’s an unassailable numeric formula to how our credit is weighed when it comes to lending us money. There simply isn’t.
Should there be? Maybe; it could prevent the discrimination that has occurred in lending due to a person’s race, for example.