I joined a new credit union. I went new car shopping. What an experience that was. They refused to tell me the interest rate they were trying to charge me. They just kept coming back with what the payment would be. I kept asking "What is the interest rate" and salesman would say he wasn't sure but "IT'S OUR BEST RATE"!!! After going back and forth I snuck out of there when he went to see if he could get the payment "lowered" again. I went home and pulled out my calculator and figured what the payment was based on the sticker price of the car and discovered they were going to charge me nearly 17% interest!!!! That's right 17%, not 1.7% but 17%!!!!! Mind you, 8 months ago I refi'd my car for 4%!!! Didn't think I was still that bad off. So I had joined a new credit union and figured I would try them for an auto loan. I WAS DENIED!!! They gave me the top 3 reasons. #1 being length of time at my residence. I bought my new house 2 years ago. Prior to that I owned my home for 14 years right here in the same city. I just bought a nicer home and they held it against me. The others were high debt ratio (which is about 40%) and number of inquiries. They have A,B,C,&D credit there and I couldn't qualify for any of them. I guess there is no new car for me any time soon.
Yet another example of why us honest car guys still get treated like crap. Why? Because of 50 years of crap like this. I am sorry about your experience. First off, when you are brought a 'pencil' it is sad but true that the sales rep does not have to disclose the interest rate. However, if you ask, as you did, the rate must be disclosed. What was this guy thinking??? I mean, even if you somehow agree to some payment, would you still agree to the 17% when it comes time to sign the contract? Rationale in the industry is STILL that for every 10 people that blow out, the one who doesn't makes up for it by getting hosed. Fortunately, that is all going to change. High volume dealers realize that it is better to move a lot of inventory for a little profit, than hope that the 1 in 10 will make their paycheck. You did the right thing. Next time, don't sneak out of there - at least throw a chair or something
That's interesting!!! I did ask him several times and he continously said he didn't know. He would only say it was their "best rate". I should add though that they might have jacked the price of the car up and not the interest rate. I just went with what the sticker price was, added 10% for tax & reg then figured out what the total of payments would be and used the Credit Unions website car buying calculator to discover the interest. Mind you, I was NOT trading in a car either so I cannot blame them adding money from an upside down trade-in onto the price of the new car. Also, I'm a single female and I truly believe they were taking advantage of that. I'm sure they figured I would fall so in love with the shiny new car that I wouldn't care about the interest. Your last line cracked me up. I wish I would have had the nerve to throw a chair. I had tried to leave after the very first offer and was told I couldn't because I had signed an "agreement" to buy the car if they could get it at the payment and down payment we agreed on. This was one of those silly worksheets where they tell you you have to put 1/3 down and your payments will be so much. They start from there and work their way down. I said no down payment and payments under 500.00 for 60 months. He had me sign on the x saying if he could do that I would buy the car tonight. He really thought I was stupid enough to think I was obligated even though their counter offer was $2000.00 down, payments way over 500.00 a month for 72 months. I'm really sorry you have to compete with dealerships like this. If you don't mind me asking, the dealership you work for, is it for imports or domestic? In my 20 years of buying cars, I have had the hardest times at domestic auto dealerships (and 1 Nissan dealer that was actually the all time worse). The import dealers for the most part have been very fair & professional. This was a Dodge dealer by the way.
Ahh my forte. Allow me to respond! They were. Trade inequity, or being upside down, is not added to the price of the new car. It is actually on the contract as a separate item. The price of the car is the same. First, leave whenever you feel uncomfortable. Consider it a date and you can always get a cab. Second, this is a double-edged sword for the dealer, not you: This agreement is only binding for the salesperson as a way for Federal Agencies to 'work backwards' in order to find out how they got to a certain payment. However, you are not bound by it. This is a hardcore tactic still used in some states. In metro areas, most people do not use a down payment, so this worksheet is defunct. However, I know that it Oregon, the urban myth still exists that 'most people' put at least 1/3 down, as the banks require it. Not true. Also, that worksheet is not a binding contract. Never ever discuss monthly payment. There are 1400 ways I can sell you a Camry for $400 month. Your only concerns are interest rate (should you finance) and the price of the car. The monthly payment 'is what it is' if you use this logic, and works itself out. I work for Toyota and here is the part where I am going to get some negative feedback. This is not my opinion, but fact, so please, no blasts from the domestic die-hards. Domestic sales are drastically down. This is why they are offering so many 0% rates, so many rebates, and so many Saturday Ad Cars. For the first time ever, Toyota has taken #2 in automobile sales in the U.S. This is quite a feat for an import. In California, the Camry is the most sold Sedan on the road, however, the Chevy Lumina, of which is almost never seen in my region, is still the #1 selling family sedan. People are very driven to own American vehicles because of the pride in ownership and production. However, this trend is decreasing as 1) imports are built in the U.S. and 2) imports last longer and have a higher residual value. This is why you may experience high pressure from a domestic reseller. However, I have worked for a Toyota dealer that was not only high pressure, but insulting to it's would-be patrons. I own 3 cars: I have a 1998 Dodge Ram, a 1999 Jeep Cherokee, and a 2004 Mercedes. I buy each of my cars for a particular reason, and that is why I do not feel that ANY one car is better than another. Go to edmunds, kbb or carsdirect.com for a great quote. Let the dealers compete for your business. Work only with the Internet or Fleet department and secure your own financing. You will be successful, but it takes research. And if need be, I am always happy to call the dealer ahead of time, introducing myself and arranging an appointment for you with the Fleet Director. I am that serious about cleaning up the image of my profession.
What a great resource you are, Thank You!!!! I thought about going through Costco as they have a program for members where you go through fleet. Is that any good or are they all about the same? Of course, I still have to figure out financing since my credit union is so lame...... I had actually done some research on the car first and punched the numbers through the calculator. I calculated 6 % interest becasue that is as high as I'm willing to go right now. The payment should have been around 490.00. That is why I had said under 500.00 knowing that I would be where I wanted to be. Securing your financing beforehand is excellent advice and where I screwed up. I was not at all prepared when I went in there and mainly wanted to look at the car and the sticker price etc... I admit I got suckered in and if they could have met my terms I would have bought it. In retrospect, I think I'm glad they didn't as I have been doing a lot of research on the car and am leaning towards my 2nd choice. I'm glad to see an honest salesman is a success (2004 Mercedes....nice!!). And by the way, I totally agree with your take on domestic vs import.
Thanks. I owe this board alot. That's why I post here. Costco deals are awesome. Also, find out what your best score is, and use the Who Pulled My Credit Group to determine where to shop for you loan. That's what I did.
I do not want to hijack the thread however my wife purchased a car at a whoping 16 percent interest in february this year. Since then here scores have improved and I think at present she is arount a 630. What scores does she needs before she can qualify for the low 6 percent loans? I want to re-finanace but will not do so untill she can get the low interest rate. Thakns and my apologies for getting on your post.
my credit union works the equifax (dispute trick). I was allowed to loan or refi at: 4.25% 39-72 months $25K 3.75% 36months no shorter term due to income. I chose 60months @4.25%,since i can always just pay it off early and get my APR back. (yes the loan was coded that way). They were all score driven, they had their own model Plus fico now. I saw my "derived score" and it was 842 which was one level under the very best possible score since my balances were disputed (not counted). Total interest on the loan was $2400, so even if i were to due to hard times pay it off at the full 60 months (used car mind you) i would not be totally screwed. My LTV 100% NADA value was $15,575 but the car sold to me for $12000 so no gap insurance was needed. New car loans should be 0-3.9% no more. hell if i wanted i could BT my car loan (Whats left) to my citibank 2.9% for life i spose, but that would hurt my score (install versus revolve $$). lol find a new cu, and dispute trick it.
Out of curiousity, I have always wondered about throwing a car on a card...Say you transfer the balance of the loan over @ 2.9%, but for some reason, you miss a payment, will Citibank then jack you back up to 19% for the balance due?
Here's an idea.... If your scores are in a somewhat satisfactory range, you can always do the majority of your business on the internet when it comes to car shopping. If you were able to get your car refinanced for 4%, then unless income is a factor I see no reason why you shouldn't qualify for a similar rate with a new vehicle. Granted, dealers like to see 'money down', but there are plenty that will work around that option. A few friends of mine have had luck working with dealer quotes they received online.....as far as I know most will try their best to help you. Anyone please correct me if I'm wrong. Best of luck to you.
Maer Did this car dealership in question throw your app out to available banks? Or did you have an 'ok' from your credit union on the particular loan? Just curious.
DO NOT take the car off the lot without a complete contract...interest rate, payments, everything! They can "change" their mind or say anything but if it's in writing then TOO BAD for them! I actually have walked out of car dealerships that won't put it in writing.
It was a Sunday evening when I was at the car dealership. I couldn't get any info out of them on the loan. I'm not even positive I was approved. (although I do know they ran my credit) I never spoke with the finance person. I walked out while he kept leaving to check with someone about lowering the monthly payment. I went to my credit union on Monday morning. They denied me. They said due to my time at my residence (bought 2 years ago), debt ratio & number of inquiries. They pulled only Experian and according to Credit Expert my score is 670 (I know that means nothing and for all I know it could actually be 500). When I refinanced my car earlier this year my score was 680 (Exp). My other credit union said that was the magic number to be considered prime.
Can you get a better deal on any car by going through the fleet department? My other half is looking for a new BMW and they tend not to budge much on price. And frankly, neither one of us likes to haggle...just tell me what the price is!
High end dealers hold a reputation for having cars that demand the sticker price. Any car, with the execption of say the Saturn, or the Scion has a negotiable price. Most, and I say most, fleet managers are there to move volume, and will hit you with their best price first. Find the car you like, go through edmunds.com and carsdirect.com to find out what people really pay and what you should be paying. Print it out and bring it to Fleet. I would say that would be your best bet.
I will go that route next time for sure. I just want to have the financing in place first. At this time it does not appear I can qualify for a decent rate. I am still stunned that my credit union rejected me in part due to my "lengeth of time at residence". I bought 2 years ago. I lived in my previous residence for about 14 years (buying also). I stayed in the same town, just moved up to a slightly better part of town.
That part about length of residence baffles me. Most I have ever seen was a max of 1 year in current residence or instead you need 5 years in the same 'area'. Can you talk to someone higher up?
Yeah, it baffled me too. I don't think I have the nerve to go talk to them but I thought about sending them a letter outlining my arguments about each reason. I'm sure it won't do a bit of good. It's been my experience that credit unions are quite strict and if they say No, they mean NO!! It took numerous humiliating denials at my first credit union before they finally approved me. Even then it was with conditions. I had heard this credit union was easier to deal with but obviously not (at least for me).
