Buying New Car / Interest-Loan Rates

[Rizon]

Ok, say I go to get a new car. I just checked my credit, and it's excellent (2% risk group). If I finance through the dealership, can I request a 0% interest loan?

I ask because last time I bought a new car, with a lower credit rating, I qualified for 0% through the dealership, but I am pretty sure that was standard promotion at the time. Does it have to be a promotion, or can I demand it?

[digamma]

You can demand it, but they may not give it to you.

Play around on sites like edmunds, carsdirect and cars.com and you can generally find out what the current incentives are for most makes and models.

[cthomer5000]

Tell them you will not accept two things:

1. A banning
2. A loan with interest higher than 0%

[AgustusM]

I highly recommend Edmond's.com to negotiate price and minimize hassle - we bought my wife's 4runner for WAY under (like 8 grand) sticker price and were in and out of the dealer in 40 minutes total!

[Swaggs]

Unless the manufacturer has a promotional 0% APR, I would say no.

[Rizon]

Cool, I already got all my info from Edmunds, Consumer Reports, etc etc. I just wanted to tell them "0% or I'm not buying your car". Which I won't if I don't get it.

Thanks!

[Rizon]

Well, 4.99% was what they offered me. I felt that was too high, so I left.

[Rizon]

They've called back twice since I left the dealership about two hours ago.

The last time they've offered to lower the interest rate to 4.5% by going through a credit union.

[Farrah Whitworth-Rahn]

Car buying is not fun. I love test driving the cars, hate dealing with the salesmen. I rank car salesman below pond scum, right above Jo...well never mind.

You know what I hate the most? When shopping with Arlie, the salesmen ignore me and only speak to him. As if that's who controls the money in this family.

[Rizon]

Ha!

See, the problem is I'm not sure if 4.5% is acceptable. It just seems high to me still. I can't go to a bank because they're all closed. I'm not sure who to ask. My FICO score is 783, which is good. If I didn't get a damn Mervyn's card to get 15% off It would be 803 (never used it after that).

[Farrah Whitworth-Rahn]

Originally Posted by Rizon

Ha!

See, the problem is I'm not sure if 4.5% is acceptable. It just seems high to me still. I can't go to a bank because they're all closed. I'm not sure who to ask. My FICO score is 783, which is good. If I didn't get a damn Mervyn's card to get 15% off It would be 803 (never used it after that).

Do you need to buy the car today? Why not wait until Monday and call the banks?

[Rizon]

Originally Posted by Farrah Whitworth-Rahn

Do you need to buy the car today? Why not wait until Monday and call the banks?

Nope, don't need it today. I was hoping to get to a bank and them say either "oh, we can get you 3%, or oh, we can't beat 4.5%". That way I'd know one way or the other, or at least have some leverage to bargain with the dealership more.

[henry296]

Considering the Prime Rate today is 6.25%, I rather doubt that any major bank will give a loan at 2% below prime.

[KevinNU7]

I have perfect credit (don't know what my FICO score is but I am sure it is simmilar) and I got 3.9% at a dealership a month ago for a 60 month loan. I could have gotten 1.9% if I went with a 36 month payment, or 2.9% if I went 48 month.

If I were you I would call other dealerships in your area that carry the same car line and tell them you will buy from them at X cost with X %. You should get some bites

Oh yeah, my car was a new Accord LX for reference

[JimboJ]

I just bought a new car and I also have excellent credit. The rate I got was 4.75% for 60 months through Toyota credit. I also did a search on www.bankrate.com, and the lowest rate I found there was 5.1%. I'd say you're not going to do any better than 4.5%.

Some of the American car makers now are giving you a choice between 0% financing and $4000 cash back. I did the math, and figured out you're way better off taking the cash back.

[Swaggs]

Here's a good current list of all the financial specials that the different manufacturers are offering: http://autos.msn.com/home/rebates_all.aspx?src=LeftNav

As much as people love to hate car dealers, they do not have much flexibility with with finance rates. The dealership, business managers, and sales managers usually share like 0.5-1.0% of the APR, so you can sometimes negotiate a little off of that, but rarely.

[Rizon]

Woops, I listened to the message again and he offered 4.25% instead of 4.5%.

I'll let him sweat it out a couple days.

[RPI-Fan]

Related question:

I'm buying my first car in the next two weeks probably. I have zero credit.

I'll be putting up a down payment for about 60% of the car -- since I'm putting so much down, I view this as a great opportunity to build credit (my parents will co-sign for me, so I think getting financing shouldn't be an issue). What is the very best way to build my credit? Is it better to do 60 month financing, or like 36 (I can easily afford either)?

Thanks for any help!
~rpi-fan

[digamma]

Originally Posted by RPI-Fan

Related question:

I'm buying my first car in the next two weeks probably. I have zero credit.

I'll be putting up a down payment for about 60% of the car -- since I'm putting so much down, I view this as a great opportunity to build credit (my parents will co-sign for me, so I think getting financing shouldn't be an issue). What is the very best way to build my credit? Is it better to do 60 month financing, or like 36 (I can easily afford either)?

Thanks for any help!
~rpi-fan

Why pay an extra two years of interest? I think the effect on your credit report is probably negligible, but I'll defer to others who may know for sure.

[RPI-Fan]

Oh, one more question:

For negotiating the price down, the things I plan on doing are:

-Saying that I'm looking to buy in about two weeks
-"I have a great deal over at [other dealer] for [car] at [price]"
-Using the walk-out move if necessary

Any of these things are bad to do? Any other tips for negotiating? This is my first time through the process, so I need all the advice I can get.

(Sorry for threadjacking, but it looks like your question mostly got answered, Rizon)

~rpi-fan

[Rizon]

Originally Posted by RPI-Fan

Oh, one more question:

For negotiating the price down, the things I plan on doing are:

-Saying that I'm looking to buy in about two weeks
-"I have a great deal over at [other dealer] for [car] at [price]"
-Using the walk-out move if necessary

Any of these things are bad to do? Any other tips for negotiating? This is my first time through the process, so I need all the advice I can get.

(Sorry for threadjacking, but it looks like your question mostly got answered, Rizon)

~rpi-fan

You actually don't want to negotiate down from their sticker price, and instead want to negotiate up from what the dealer paid to the manufactorer for the car.

When I looked at the car today, I was surprised that the salesman straight up told me what they paid for the car, which was within a few dollars of my research. A fair price is usually 4-8% up from invoice, depending on how popular the car is or how badly they want to sell it. Negotiate from 0% markup and let them shoot themselves in the foot.

Definitely go to ConsumerReports.org and check out your car. Also, for about $12, you can buy a little report that lists the invoice price for your car as well as the invoice price for all the addons. $12 is well worth it when it can save you thousands.

Also try places like Edmunds.com.

Tell them you are interested in several different cars.

I didn't tell the salesman I was looking to buy in such-n-such timeframe. I told him I didn't need another car, but wanted another toy to be my 3rd car.

I also brought my wife, who used her acting skills to seem as disinterested in the car as possible, talking about how she liked the other ones better. Bring a friend who can play this game for you.

Don't let them sucker you into doing something you don't feel comfortable with. Once they smell that fear in you, they start pressing and pushing. This is a free country, and they can't do anything to you, so just get up and leave. Give them a phone number, and they'll call you.

Remember, they maybe be trying to make a buck like we all are, but it's YOUR buck and you have every right to a fair deal. Don't be rude or pushy until they get rude or pushy, then let them have it.

[RPI-Fan]

Thanks for the help... I'm bringing my dad with me, so I'll have him tell me how we should keep looking somewhere else. It seems like that will help.

On the negotiating thing, the problem is, I don't HAVE a car that I know I want. I have an idea of the type of car (lightweight sedan), but the only thing I really am set on is getting luxury features (AC, power everything, etc.). I'm not walking in knowing that I want a Civic, or a Saturn Ion, or anything (though the Ion is something I'm definitely interested in, especially if I can find one of the 04 Coupes for less than 15). Any way around this problem?

Also, I should have clarified: I'm probably looking at buying used, but if the right deal came along I would buy new.

[Rizon]

Well, if you go Saturn, then theres really no negotiating. Their sticker price is the only price they offer, and there's no haggling over it. I've purchased two Saturns over the last 7 years and they've been a great car for the money, never had a single problem. Both times I went they never pressured me or gave me shit. The only bad thing I can say about the cars we got were that they get no respect on the road, everyone is always trying to pass you no matter how fast you're going.

As far as picking out the car you want, go to manufactorers websites. Look through all their vehicles and pick out a bunch you like. Then go to Edmunds and Consumer Reports, and read the reviews about the cars. Read through all the customer reviews too. Also, type the year and car into Google (ie: "2006 Saturn Ion") and read about the first 20 links. That should narrow the field more as you read about how so-and-so car sucks, etc. Maybe there will be about 5 you like. Then check out that Consumer Reports thing. Maybe it's $12 for the first car and $5 for additional (I'm not sure). If money is tight, then you can go back to the manufactorers site, "build your own vehicle" and see the price they give you. Take about 12% off that price (this will vary widly from car to car and is extremely rough) and try to negotiate from there. Just don't negotiate down from the price on the sticker.

[KevinNU7]

http://kbb.com

Kelly Blue Book is a great place to research cars, and it's all free