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Posted in Auto Loans
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Question By
Adanvjr

2 Contributions
147 People Helped
Should I avoid the dealership financing agents every way possible?
My truck has been paid off for nearly 7 years. I'm one that keeps his vehicle well maintained so I can have as long as possible.

I'm not shopping for a new truck yet as I love not having any truck payment. However, I'm very certain one day the powertrain will fail and the repair quote will be more than what my truck is worth.

So I'm checking out to see what options will be available when I'll have to walk into a dealership again.

Although I always keep great credit (+750), I've been told that I should avoid the dealership financing agents and go straight to someone like Lending Tree or a bank because the interest rates from dealership agents are often higher.

However, I've also been told that I may lose out on rebates, 0% interest, and such if I don't go through a dealership agent.

It's been 12 years since I walked into a dealership. I have no idea what has changed.

Thank you

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1 Contribution
57 People Helped

Don't Trust Car Dealerships!

Helpful to 57 out of 57 people

I recently bought a new car from a major franchise dealer. First, I researched online and found out what a good price was for the make and specific model of car. I used my phone to play 3 dealerships against each other to get the price I wanted from one of the dealerships. Let me repeat, the price of the exact vehicle was negotiated over the phone prior to going to the dealership.

If you just wing it and go to your favorite dealer, without arming yourself with researched pricing numbers, you will get screwed on price! 

Then, I downloaded an auto loan app on my phone. After taking a test drive of the vehicle we sat down with the sales rep. He was an old pro at the car sales game and tried every trick in the book to get us to pay more by pitching us on all sorts of add-ons. After restating what I wanted about 6 times he finally relented and quit trying to sell worthless add-ons to me. 

Then it was time to get the financing paperwork done. I had previously decided to go with the dealer's financing because they offered a competitive rate. I plugged the total price and number of months into my auto loan app. That way I knew what my payment was. 

I was surprised when the sales rep came back with a monthly cost of $50 per month higher than my trusty auto loan app told me! My credit score has been over 800 for many years and at that time it was 812, so there was no reason to rate the loan. I told the sales rep what the monthly cost should be and showed him on my phone. He went to his finance guy and came back with a new monthly figure, but it was still $20 over what it should be!

I almost walked out of the dealership at this point. I basically told him, if you don't start treating me as if I have a brain, I will drive to your competition and buy from them right now! He quickly went back to his finance guy and finally came back with the correct monthly cost.

NEVER trust a car dealership.

Reply by
Existentialist

4 Contributions
33 People Helped
Helpful to 18 out of 19 people

Hey Dean. What auto loan app do you use?

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Reply by
Truereliable

232 Contributions
34 People Helped
Helpful to 1 out of 5 people

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2386 Contributions
456 People Helped

Helpful to 49 out of 57 people

Your best bet would to have your own financing prearranged and in-hand before you go shopping. Get your bank or Credit Union to pre-approved you and you will not only get the better interest rate from a bank you know, your credit score won’t be put thru the ringer with a bunch of hard inquiries over one vehicle loan.

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Reply by
Harry7900

2386 Contributions
456 People Helped
Helpful to 14 out of 19 people

I guess the one who didn’t find this helpful is a finance manager at a car dealer!

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Reply by
Nomadre

945 Contributions
540 People Helped
Helpful to 33 out of 39 people

I am not in any way associated with car selling or financing.

your comment about credit "thru the ringer" is not true. Yes it might hurt it in CK, but in the real world laws were made to protect a smart buyer for houses and cars to shop for the best loans. Yes if your credit is less than excelent the dealer will shop for you and you will have MANY hard inquiries from them doing that, but again by law anyone pulling in the future MUST treat that as one single pull.

New car dealers, through the manufacture, often give better rates than ANY bank or credit union

With used cars you have to do the math to get the best deal. You are right that a buyer should come armed with pre-aproval. But, if the rate from the dealer are only slightly higher, but they knock off 1k more in price of the car, it is very likely that is a better deal and you pay less interest for the life of the loan.  But it does take some number crunching to know.

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945 Contributions
540 People Helped

Helpful to 15 out of 17 people

With your score, I would go direct with the car dealership if you are buying new. If not then I would do as mentioned and get a pre approval from your back and maybe lending tree then talk to the dealership.

A few things to consider

1) Do all of your loan shopping within a weeks time frame, this way most scoring models will see all the hard inquiries and count them as one. thereby not hurting your credit. 

2)New Car dealers generally have VERY good rates from the manufacturer that banks have a hard time meeting, even as low 0% if you have very good credit

3) Used car dealers can sometimes work on pricing a bit more if you get finiancing from them because they get a kick back.

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16 Contributions
141 People Helped

Dealer Financing

Helpful to 10 out of 10 people

With a qualification, you should always allow a dealer a chance to provide financing.

New car dealers do not actually finance a sale.  They essentially sell your loan to one of many financing providers, such as a captive or a bank, which they work with.

The qualification is a person should know what financing they can get outside of the dealership.  Then, only after price is negotiated, tell the dealer's F&I person or the sales person the financing you can get outside the dealership.  Let them try to beat that financing.  They often can.

Think about it!  What is there to lose?  If the dealer can arrange better financing, great.  If the dealer cannot arrange better financing, just use your own financing. 

You should not disclose how you plan to pay for the vehicle until after a price is negotiated.  The reason is dealers often make more profit in the F&I office than they do on the sale.  If the dealer believe you will finance, they may be willing to sell at a lower price.  Therefore, do nothing to make a dealer think you will not finance with them.  

1 Contribution
7 People Helped

a lot has changed

Helpful to 7 out of 8 people

we just leased a new car and used the dealership and now we have to pay some agency they used to find us temporary insurance. i called the agency and they said we have to pay them because they are paying the dealership. i feel like we were taken advantage of because we are paying so much to a place that we never even knew was involved SMH 

Steer clear of the dealerships and dont let them find you insurance because you will be robbed 

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16 Contributions
141 People Helped

Dealer Financing

Helpful to 4 out of 4 people

The smart buyer always allows the dealer an opportunity to arrange financing.  New car dealers do not finacne vehicles.  But they do have a number of financial institutions which they can arrange financing for the buyer.

It is important to understand the dealer F&I manager is not a friend.  The F&I manager is usually the dealer's best sales person.  Their job is to finalize the paper work, settle financing, and to sell a plethora of overprice products of dubious value.  The smart buyer just says no to anything offered in the F&I office.

However, those F&I managers can and often do arrange financing which is better than a buyer can get outside the dealership.  The key to dealer arranged financing is the buyer must know the financing he or she can get outside the dealership.  With this knowledge there is nothing to lose allowing the F&I manager to see if they can find better financing. 

Think about it, there is nothing to lose.  If the F&I manager finds better finanicng, take it.  If not, use the financing you found outside the dealership

1 Contribution
3 People Helped

Preparing to buy a new home

Helpful to 3 out of 3 people

Refinancing my vehicle!!!!!Hey everyone!! Need advise. I had to such a life change that damaged my credit in the past. I am finally able to breath. I purchased a vehicle when my credit was not so good. I can now refinance and get my paymets lowered by a few hundred dollars. I am a little nervous. I was advised to get another credit card and refinance my vehicle, which in return this would increase my credit scroe. Can someone share their experience if this sounds similar.  

Thanks in advance for your responses

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Reply by
Jensetter04

453 Contributions
87 People Helped
Helpful to 0 out of 2 people

I was thinking of applying for a bankruptcy form because i have no other options, I’m on a fixed income and cannot afford new things like auto loan, mortgage loan. My insurance premiums increased and the interest rate has hindered me from getting some benefits and securing a job I wish. I came across a comment of a man on a blog giving kudos to EXCELLENT REPAIRS for job well done in clearing off his debts and fixing his bad credit report. I took a risk by hiring him to fix my credit. I’m happy to tell you that my credit was fixed within 5-6 days by this exceptional credit expert. I was impressed by his work and that’s the reason I’m recommending him as well. You can reach him at sgiacalone03@ g m a i l . c o m, He’s name is Steve Giacalone… You will be glad you did

1 Contribution
1 Person Helped

Aviod Dealer

Helpful to 1 out of 1 people

Pick out what you want go look and drive then get pre approved with your bank..I you are looking at a truch be prepared for sticker price shock.

Dealers get kick backs from the manufacturers financing as well as banks.

1 Contribution
2 People Helped

Heck yeah

Helpful to 2 out of 3 people

Avoid the finance manager 

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