[CheesePuff]

So after 2 weeks of badly wanting this Dodge Avenger... this dealership finally gets me approved for the loan. But it requires a $1500 down payment and its with 12% interest. I was originally told the down payment is optional and the interest rate with the original bank which should have approved me would have been 7.74%. Well now I'm pissed, the best Avenger for sale now within 50 miles of where I live I can no longer have.

[daimoni]

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[waxcrash]

Never finance a car through a dealership. The dealership will tell you they can get the best deal for you, but in reality, they don't. They will give you a high interest loan and split it with the finance company they work with.

Go to the local banks in your area or look on the internet and find out how much you can borrow. With this figure, you know how much you can afford. Then get a loan. The interest rate you get from any of your local banks or on the internet with be a lot better then the dealership will offer you. Then go to the dealerships and negotiate the purchase price. Don't negotiate monthly payments - tell them you are buying the vehicle. If you agree on a purchase price, use the loan you just acquired to purchase the vehicle.

[CheesePuff]

Originally posted by waxcrash:
Never finance a car through a dealership. The dealership will tell you they can get the best deal for you, but in reality, they don't. They will give you a high interest loan and split it with the finance company they work with.

Go to the local banks in your area or look on the internet and find out how much you can borrow. With this figure, you know how much you can afford. Then get a loan. The interest rate you get from any of your local banks or on the internet with be a lot better then the dealership will offer you. Then go to the dealerships and negotiate the purchase price. Don't negotiate monthly payments - tell them you are buying the vehicle. If you agree on a purchase price, use the loan you just acquired to purchase the vehicle.

So then to the dealer it would be as if I'm purchasing the car in cash? Also, I just recently increases my credit line with my bank so I doubt they'll be doing much for me (and possibly why the dealer couldn't approve me without a higher interest rate?).

[daimoni]

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[waxcrash]

Originally posted by CheesePuff:
So then to the dealer it would be as if I'm purchasing the car in cash? Also, I just recently increases my credit line with my bank so I doubt they'll be doing much for me (and possibly why the dealer couldn't approve me without a higher interest rate?).

Yes - to the dealer it would be as if you purchased the car with cash. If you try to negotiate monthly payments with a dealership - you are getting screwed big time.

As daimoni mentioned, go to Edmunds.com and read everything. The research you do now before you buy is worth it and will keep you from being taken advantage of.

Know your credit rating. Run an online credit check through a company like Equifax. It only costs around $15, I think.

If your credit isn't the best, see if a family member who has good credit will co-sign. You can also apply for auto loans online through Capital One, etc. If you apply online, you will know almost instantly how much you are approved for and at what interest rate.

[Eriamjh]

Tell them to shove it and offer what they said they offered or the deal is off. Then walk away.

Be stronger than them. You will win. Or at least, not get screwed.

[djohnson]

So what about the 0% offers? ie 0% through GMAC?

[Eriamjh]

Originally posted by djohnson:
So what about the 0% offers? ie 0% through GMAC?

He may not have good or any credit.

[CheesePuff]

Definitely do not have the best credit, but it's not bad. But I applied at my local bank online but they couldn't approve online so they will contact me in the next couple of business days.

I did do Capital One and they approved me, but it has some strict rules. It must be a 1999 or newer vehicle with 44,000 miles or less. The car I want is a '98 with 67,000, and it's from a much smaller used car dealership that probably wouldn't apply anyway.

[Zimphire]

Originally posted by Eriamjh:
Tell them to shove it and offer what they said they offered or the deal is off. Then walk away.

Be stronger than them. You will win. Or at least, not get screwed.

Yeah you'll be surprised at the amount of times the dealer will go into his bosses office to "talk to him" about lowering it.

They try to push the most they can get you for, and act like that is the LEAST they can let it go for. It's just games.

[scaught]

Originally posted by Zimphire:
Yeah you'll be surprised at the amount of times the dealer will go into his bosses office to "talk to him" about lowering it.

They try to push the most they can get you for, and act like that is the LEAST they can let it go for. It's just games.

be prepared for a long afternoon of haggling.

eat before you go. bring a liter of water and some granola bars with you. wear comfortable clothes.

know the value of what you want before you go in there. tell them thats what youre willing to pay. wait around until they make it happen. im really doubting theres people tearing at the wheels of that avenger to get it off the lot.

[fireside]

Originally posted by Eriamjh:
Tell them to shove it and offer what they said they offered or the deal is off. Then walk away.

Be stronger than them. You will win. Or at least, not get screwed.

thats what my brother did when he got his Dodge Ram. he went to the dealer, talked for a bit, then he said that he'd only buy the car for 9,000 total. then when the dealer said no, he started to leave. and he actually did leave. he was in the car leaving when the guy came up to him to say that he could get it for 9 grand.

[CheesePuff]

Well I got an e-mail from my local bank today stating that I was approved for a loan with them at 9.69%. (hell, it's cheaper then the 12% the dealership said). But the bank says we'll have to wait until Monday to see if the value of the car is the correct amount (or something along those lines) to give out the loan.

Now, the dealership said $6,995 (the sticker price) is the lowest they will go. Should I offer $6500 and say take it or leave it or go a little higher? I'm pretty sure I'll end up buying it at $6,995 anyway, but would like a little off.

[daimoni]

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[waxcrash]

Originally posted by CheesePuff:
Well I got an e-mail from my local bank today stating that I was approved for a loan with them at 9.69%. (hell, it's cheaper then the 12% the dealership said). But the bank says we'll have to wait until Monday to see if the value of the car is the correct amount (or something along those lines) to give out the loan.

Now, the dealership said $6,995 (the sticker price) is the lowest they will go. Should I offer $6500 and say take it or leave it or go a little higher? I'm pretty sure I'll end up buying it at $6,995 anyway, but would like a little off.

If your going to buy used, then I'd go Japanese - Honda, Toyota, or Nissan.

[Zimphire]

Originally posted by waxcrash:
If your going to buy used, then I'd go Japanese - Honda, Toyota, or Nissan.

So you can pay more to get it fixed once you get it.

[velodev]

Originally posted by waxcrash:
Never finance a car through a dealership. The dealership will tell you they can get the best deal for you, but in reality, they don't. They will give you a high interest loan and split it with the finance company they work with.

Go to the local banks in your area or look on the internet and find out how much you can borrow. With this figure, you know how much you can afford. Then get a loan. The interest rate you get from any of your local banks or on the internet with be a lot better then the dealership will offer you. Then go to the dealerships and negotiate the purchase price. Don't negotiate monthly payments - tell them you are buying the vehicle. If you agree on a purchase price, use the loan you just acquired to purchase the vehicle.

This isn't always the case. I work (just to make the disclaimer) for the financial arm of VW and Audi in their I.T. department but I learn A LOT about the company through the Business Analysis Requirements docs.

The term and tier are determined by you. If your credit is good you can be an A, B, C, or D tier. A's obviously get the APR's advertised on TV but sometimes those 0% financing are for the people who want the longest term. There are so many variables it will drive you nuts. Every month bulletins get released that have the "specials" of the month. Some months, VW wanted to get rid of the Beetles so you would see - every Beetle trim minus Snap Orange for A - 1.9% B - 2.9% and C - 3.9%, etc. and then Snap Orange was A - 3.9% and B was 4.9%. These are typically secret within the corporation but I have noticed that Edmunds releases these so I don't feel guilty letting you know. Did through Edmunds and find the financial offerings of the car dealer.

I would say I disagree and agree with the quoted poster. Here's a long explanation why - YOU MUST, MUST determine the final price of the car before you even let them know how you want to pay for it. Do your homework before hand with the banks so that you can walk if the dealer doesn't have good financing. See a lease vs. loan - however, leasing may get you into a nicer car for lower payments you are basically renting the car and paying the depreciation on it AND car manufacturing financing companies don't win in leasing used cars so the money factors (similar to APR in loans) will be outrageous. I would say DON'T lease a used car. And don't lease a car period unless you own a company and can write it off - but that's another conversation and even then I can tell you why that isn't smart.

Whew, back on track. So determine the final price. Look at lease vs. loan and find out through your bureau pull (credit check) what your tier is and what the final APR is. Dealers do get a lot of kick-backs (called subventive loans) through the manufacturer if they use the manufacturer's financial arm. The basically pay part of the loan to knock down the APR HOWEVER the dealer does not need to inform you of this and you could still be paying the full APR.

Basically, if I had to give you one piece of advice and I learned this not through work but through financial tips and guides. Buy your car with car. Even if it is a beater. Don't have payments. Save your monthly income for emergency repair and save it for your next car. When you get a decent amount of money saved, buy a newer used car with car and continue that cycle. I don't know why American's believe that all cars come with payments. I figured out that if I was to take an employee lease of a 2004 A4 Avant it would be around $350 a month. However I bought a 2000 Audi A4 Avant in cash which should have been around $550 in payments. I paid for it in cash and take the $550 and put it in the bank. Sure, it was a major hit in my savings but it will take 20 months to get the money full back and I have been driving the car for about a year now. The car will definitely last another 4-5 years so wham! - I am making money on a car. I can't say I know too many people who can do that.

Sorry for the length. I hope this helps. If you have any questions, PM me.

[djohnson]

Ahh forgot about the credit thing...

[fireside]

Originally posted by Zimphire:
So you can pay more to get it fixed once you get it.

if and when it breaks (which is very rarely). IIRC i don't think it would cost anymore money to fix it when it breaks down, unless some weird part that no one has and they have to order-it breaks.

[fireside]

Originally posted by CheesePuff:
Now, the dealership said $6,995 (the sticker price) is the lowest they will go. Should I offer $6500 and say take it or leave it or go a little higher? I'm pretty sure I'll end up buying it at $6,995 anyway, but would like a little off.

say $6500 is the highest you can go, then leave if they say no. don't stand there bickering with the guy, just walk out. don't say bye or anything, just leave.

[Zimphire]

Originally posted by fireside:
if and when it breaks (which is very rarely).

If it's taken care of. Just like a domestic. If it's not taken care of, it's a piece of crap also.

IIRC i don't think it would cost anymore money to fix it when it breaks down, unless some weird part that no one has and they have to order-it breaks.

Heh, ANY import cost more. The parts cost more, the labor cost more.

[mitchell_pgh]

I don't know about any of you, but I usually find out how much the dealer paid for the car and say something like "I'm willing to give you $500 for the car plus transportation" and they say "No, I can't do that" Then I say "Here is my number, give me a call when you need some business."

I'm not a jerk and I don't haggle. Sometimes they call, sometimes they don't. I've found that if it's a popular car, they will try to get a sucker over the $500.

I'm giving them $500 to essentially do paperwork for a few hours.

(P.S. They also get incentives to sell cars... also, wait until it's about a week before the end of the month... They start to become more interested in making "super special deals" with you.)

My brother sold cars for about five months. It's a nasty business.

[DeathToWindows]

ach, car dealers are arseholes.

[Gankdawg]

Originally posted by velodev:
YOU MUST, MUST determine the final price of the car before you even let them know how you want to pay for it.

This is the key. Have financing lined up before you even go to the dealership.

And then once you get to the F&I guy, just say no. Then say no again. Then again.

[CheesePuff]

Originally posted by Gankdawg:
This is the key. Have financing lined up before you even go to the dealership.

And then once you get to the F&I guy, just say no. Then say no again. Then again.

So, let me just make sure I have this correct.

They want $6995 for the car. I should get prepared to take out a loan for, say $6600 and then go to them, tell them I have a loan ready to pay for $6600 and see what they say? Obviously I won't take out a loan until everything is final. Should I even say I have a loan ready, or should I just say I'm ready to pay for the car? Also with the loan from a credit union, do they hand me a cashiers check for payment? Thanks!

[daimoni]

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[CheesePuff]

Originally posted by daimoni:
For your own sake and all of ours, I really wish you would've read the info at the link I provided.

But since you refuse...

Let them know that financing has been arranged by your credit union.

DO NOT tell them how much you have been approved for. It's none of their beeswax.

Negotiate and settle on a price. Leave. Come back with a cashiers check for that amount. Leave with your car.

Thanks for the response. Don't worry - as I wrote my last post I was printing out the 3-part guide at Edmunds on How to Get a Used Car Bargain. Reading now.

[waxcrash]

If you aren't familiar with cars and you are buying used, you should have a mechanic that you trust look at the car. Also ask to see the car's service records, if available.

[Face Ache]

Don't pay interest on something that's losing value.

(unless it's some clever tax dodge ).

[CheesePuff]

dp

[CheesePuff]

Well I was about to scrounge up $600 for a down payment, which they accepted. And while I didn't get the price down (believe me, I tried) I did get some stuff included - such as new tires, keyless entry remote (Dodge dealer wanted $70 for it!) and then the usual (new brake pads, alignment, new serpentine belt, oil change).

So all in all I think it was a good deal. (KBB value of this car is $8,400 and Edmunds is around $7700). I paid $6,995 + tax.