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Old 11-15-2010, 03:21 AM   #1
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Financing Question

Im looking to buy a used 2009 focus. I was recently offered 6.99 apr at another dealership. i have great credit and am putting down about 1/4 in cash/ trade in, so i was amazed it was so high. I have been looking around at banks and it seems they give better rates on re-financing cars then on new loans.

Would i be able to buy the car using the dealers high interest rate and just go refinance at half the rate at a local bank? Iv never financed a car so im new to all this.

Thanks


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Old 11-15-2010, 04:22 AM   #2
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well 6.9 is not that bad. i think my 08 stang had 13 something on it. but it would be better to go to a bank and get a loan their. you wont get dicked around at the bank like you would at the dealer. my first car i got on my own i went with a bank.
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Old 11-15-2010, 08:36 AM   #3
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Originally Posted by Rage.Phish View Post
Im looking to buy a used 2009 focus. I was recently offered 6.99 apr at another dealership. i have great credit and am putting down about 1/4 in cash/ trade in, so i was amazed it was so high. I have been looking around at banks and it seems they give better rates on re-financing cars then on new loans.

Would i be able to buy the car using the dealers high interest rate and just go refinance at half the rate at a local bank? Iv never financed a car so im new to all this.

Thanks
6.99 is not that bad; 6 months ago, I would say that was an average APR for good credit. I was looking at rates at my wife's bank last week and it looks like they have gone down since I bought my car in May.

Not to step on your toes, but are you sure that you have "great" credit and not just "good" credit. I would say that 6.99 seems a little high for "A" credit, but not for "B" or "B+". For example a credit score of 700 is pretty good credit. 750-800+ I would say is on the "great" side of things. If you are below 700, I think 6.99 is pretty decent.

About taking the 6.99 and then going to a bank to refinance, that just seems like an unnecessary hassle. Plus are there any fees associated with the refinancing? Make sure you read the fine print to see what the exclusions are and terms, etc.


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but it would be better to go to a bank and get a loan their. you wont get dicked around at the bank like you would at the dealer.
You are not financing the car through the dealer. You are financing the car through on of the banks that the dealership works for. This is often the way to get the best rate possible, and it it SOMETIMES negotiable. When I bought my 2006 EVO in May, the best rate I could get at my bank was ~6.25%, in order to get to the payments I wanted, the dealer had to offer me 5.75% and hope that it got approved by one of their banks.

The dealer is not trying to make money from you by using one of their finance companies/banks (unless they get a small kickback from the banks--I don't know if that's how it works). They use these banks as a courtesy to the customer as well as to improve their chances of selling a car.

Now if the OP is looking at a CPO Ford and financing through Ford Credit, it is a whole different story. Those rates are pretty standard and usually on the slightly higher side.
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Old 11-15-2010, 08:40 AM   #4
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Yeah thats good for a used car, when I got my First truck the rate was like 11% due to being like 6 years old.

6% is about as good as it will get for a used car. The only way your getting a much cheaper rate is if you buy new.
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Old 11-15-2010, 09:02 AM   #5
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I just took a look at current rates at my credit union--4.84% for 49-60 months on a 2009/10 car for "A" credit (will be higher or lower depending on your exact credit score). If you are not part of a credit union, this may be a good time to check one out. If you do really have GREAT (750+) credit as you stated, shop around some banks and find a rate that is closer to 5%.
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Old 11-15-2010, 09:57 AM   #6
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The length of the loan is a factor. 49-60 would be different than 24-36 months, so we need to know what the OP is planning. Also, experian.com is offering $1 check your actual credit score. You have to cancel their membership within a couple weeks to keep from being charged extra but its worth it to see your actual score. Why not just have your bank do the loan in the first place if their rates are lower? Or pay a little extra each month on the principle? That eats into their profit real quick.
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Old 11-15-2010, 10:14 AM   #7
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If you have excellent credit you should be able to get 3.5-4% on a used car. We bank with Chase and got 3.5% earlier this year on a used 2009 vehicle. If you have good credit then 6.9 is about right.
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Old 11-15-2010, 10:24 AM   #8
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If you have excellent credit you should be able to get 3.5-4% on a used car. We bank with Chase and got 3.5% earlier this year on a used 2009 vehicle. If you have good credit then 6.9 is about right.
I agree 100%
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Old 11-15-2010, 10:26 AM   #9
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I just got 3.99% on my brand new 2010 at buying rate.

you might have been bought at 4.99 or 5.99. the dealership has every right to bump the rate a point or two. if you can get a bank to go lower than the bank the dealer has, try it.
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Old 11-15-2010, 10:33 AM   #10
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Quote:
Originally Posted by Rage.Phish View Post
Im looking to buy a used 2009 focus. I was recently offered 6.99 apr at another dealership. i have great credit and am putting down about 1/4 in cash/ trade in, so i was amazed it was so high. I have been looking around at banks and it seems they give better rates on re-financing cars then on new loans.

Would i be able to buy the car using the dealers high interest rate and just go refinance at half the rate at a local bank? Iv never financed a car so im new to all this.

Thanks
I used to be a Loan officer at a Credit Union...

DO NOT DO A LOAN THIS WAY FOR THERE IS NO GUARANTEE THAT YOU WILL BE ABLE TO REFI.

What you need to do is screw all banks. Look around at Credit Union rates, They are much much better being that they are not for profit organizations and the people that have accounts their are the actual owners of the CU.

Go into a credit union and get pre-approved for a loan. Go buy your car and tell them that Im already financing with a credit union. DO NOT let more then 4-5 people pull your credit. This will lower your score for 3 months a couple of points. And a couple of points may be the difference of getting approved at a lower rate or not. The credit union will usually instruct you to bring in the buyers order from the dealership and then process the loan for you.

I have been a loan officer and a car sales men. This is the BEST way to finance a vehicle, period. Ive seen it all. People get screwed off unless they are getting the manufacturer to finance at a really low rate, but in this case they are not offering something like that for you. DONT EVER FINANCE WITH A DEALER unless that rate is REALLY low. and 98% of the time it is not.

Also if you have any questions feel free to PM me. I know ins and outs of financing and have done it for a long time. I also know the ins and outs of a credit score. Ive have to take a class on it. Its very complex and most people have no clue what it actually means. Even many loan officers.
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