How To Negotiate A Great Deal on Car Financing!!!

Well I also decided to start a thread that focuses on auto Financing.

The Ideal Way to Shop For A Car/SUV:

1>Decide how much you can afford.
This is the most important step! Know your budget whether its a monthly investment or a 1 time investment know how much you can afford.
example:
If you can afford $400 per month for a vehicle(not including insurance) and you have $1,000 to put down you need to be around $20k

MSRP= $20,000.00
Tax= $ 1,650.00
Tag= $ 150.00
Rebate= $ 1,000.00
Down Pymt= $ 1,000.00
Trade $$$= $ 0.00
Trade Payoff= $ 0.00
APR(Market Value= 6.17%
Finance Term(months) 60
Total Amount To Be Financed=$19,800.00
Monthly Payment= $ 384.35

Payment Calculator

2>Next research the vehicle.
Use Edmunds.com, Reply.com, MFGs websites, etc...

Once you decide on a particular make/model. Go Look at it in person. Test drive if it. Make sure you like it. Test drive the model down.For example:
I prefer the corolla over the camry. Corolla has a timing chain vs a belt, smoother transmission, pretty sporty with a 5sp too.

Then Test drive the competitor's comparison vehicle. For example:
1999 Camry CE 5sp(24k) vs 1999 Contour SVT(24k).
Dollar for Dollar the the SVT out performs, looks better, and gives you more value for your money. Moonroof, 6 disc changer, leather, dual exhaust, all standard.

My point is, you might be surprised.

3> More research
Once you decided on a vehicle. Research how much insurance will cost you. Dont just check with your current provider use the internet. You may lower your insurance.

Read The Threads,
How To Negotiate A Great Deal On A New Car!!!,
How To Negotiate A Great Deal On A New Car!!! Reloaded,
How To Negotiate A Great Deal On A USED Car!!!
How To Negotiate A Great Deal On Cae Financing!!!

Financing

4>Know You Beacon(Credit, FICO) Score
Make sure to get a report that shows your score. I prefer Equifax, because you can monitor and dispute all 3 agencies from one location
Example#1
On a $150,000 30-year, fixed-rate mortgage:
FICO® Score Your interest rate Your monthly payment
760 - 850 5.59% $860
700 - 759 5.81% $881
680 - 699 5.99% $898
660 - 679 6.2% $919
640 - 659 6.63% $961
620 - 639 7.18% $1,016

Example#2


Distribution Of Credit Scores

Text


Equifax
Free Credit Report

5> Shop for a loan
Its better to be preapproved than to just walk into a dealer and hope for the best financing
Use the internet!!! There are many online sites that you can shop for a loan. Check your own bank or credit union. For example, my credit union, Navy Federal, goes loe as 2.9%.

Wells Fargo
Pace CU
NRL FCU
Must READ!!!!

I would even apply with the MFG ahead of time
Ford Credit
Toyota
GMC
http://www.capitaloneautofinance.com/Public/Home/Default.aspx
https://www.eloan.com/s/show/auto?context=auto&transtype=&sid=u-bTnbeEDmFhBsNDDzLer6vVl7Y&user=lkc_AID9327565ID267874:SID&mcode=
Bankrate.com

Heres my point
Ford Focus
Rebate= $2500 or 4.9% for 60 months

I would take the rebate and finance with my Credit union for 4.9% for 60months

6>The negotiation
Never tell the dealer/Saleman that you are financing with them or another bank during the negotiation for the vehicle.
After You get the price you want and you are sitting in front of the finance guy, let him make his offer. Remember you did your homework, you got your price, you know how good or bad your credit is, you know wha the average apr% is, you should already have a loan in place, You know what your payment should be. Let him make his offer. It will go something like this:
He will have a sheet of paper, might even show you his screen, hell present you with three payment options;
a>$429
b>$489
c>$536
All Three will have an extended warranty built into the price.

X them all out and write Your Payment($384 from the example) including the warranty
He'll probably jump up and leave the cubicle and bring in a salesmanager or your salesman.
If he's a former salesman he'll negotiate from there.

My advice is to never, let me repeat, NEVER, by the warranty from the dealer. You can purchase the same warranty online.

If he beats your rate then do business with him. If he quotes you a higher rate than you can get from another source tell him you are already aproved.
Here's a trick. If your rate is 6.17% and he quotes you 7% tell him you are approved for 5.17% from your bank, but dont tell him what bank. Ask him can he beat your rate.

7>Warranty
If you must have an extended warranty shop online:
Warranty Direct
Click for Warranty
example based on 20k examble above:
Remember your payment was $384
But he quoted you:
a>$429
b>$489
c>$536

Now your financing
a>$429=22K
b>$489=24K
c>$536=27K

The most expensive warrant I have seen when you buy direct is only $1600
I guarantee The most expensive loan he want you to buy from him becuase he is so concerned about your family's saftey, isnt any better than one you can buy direct.TRUST ME!!!

Hope this helps....good luck

Good advice. You should not use blue on black background because it's hard to read. There are some spelling mistakes so I hope FW will have a spellcheck in the future.

Good start...

mrblackpcs2 said: triggerhappy007 said: Good advice. You should not use blue on black background because it's hard to read. There are some spelling mistakes so I hope FW will have a spellcheck in the future.

Too much info for me to worry about spelling...lol

Download the FF SpellCheck extension

Bravo!!! If Deal Discussion had ratings, you would get a big green from me! Thanks for this invaluable info OP!

Good advice, except for the warranty info. Using those third-party warranty companies is asking for major headache. Check out the Edmunds warranty forums for some horror stories.

If you really need a warranty (you're probably better putting the money in the bank and saving it for any repairs), go online and find a dealer of the car make you are buying who sells the factory extended warranty on line. You can buy a warranty from any dealer that is good at any other dealer of the same make. And always remember that most cars come with at least 3/36,000, so you're really only getting any warranty time above and beyond the included factory warranty.

Mrblackpcs2:

Being that I'm young (22), with relatively unestablished credit, even though my credit is good for my age,

Your age has nothing to do with your credit

is there anyway I can negotiate getting financing with the dealership?

Follow the steps here

I walked into an Infiniti dealership 4 months ago and they told me there's no way I'm getting financing without a cosigner,

Well that could be more than a credit issue, Could be a debt to income ratio. You might not have the income to justify that type of car. Whats your beacon score?


but their financing would have been set up by a bank that they deal with. Now I plan on dealing with Chevy/GM, who has their own financing institution, so perhaps I may have better luck? I would be able to pay in full on the spot, however, I have determined that financing would be a better idea for several reasons (mainly as a good credit builder). What can/should I do to convince them to give me financing? Thanks in advance for your help and advice!

Follow my advice in threads...

mrblackpcs2 said: Well I also decided to start a thread that focuses on auto Financing.

The Ideal Way to Shop For A Car/SUV:

1>Decide how much you can afford.
This is the most important step! Know your budget whether its a monthly investment or a 1 time investment know how much you can afford.
example:
If you can afford $400 per month for a vehicle(not including insurance) and you have $1,000 to put down you need to be around $20kIn the true spirit of the finance forum, save that $400 for six months, add it to your $1,000 down payment, and go buy yourself a decent $3,400 used car.

dcwilbur said: In the true spirit of the finance forum, save that $400 for six months, add it to your $1,000 down payment, and go buy yourself a decent $3,400 used car.exactly.

mrblackpcs2 said: if thats the case why buy a car, why not buy an electric scooter.
i see how you average 3.4 posts per day: useless postsGee thanks for the compliment, Sunshine! None of your advice above is bad, per se, but buying a new car, and financing it to boot, is one of the worst financial decisions you can make.

suggesting to buy a cheap used car in cash IS a valuable financial tip, thats relevant to this topic.

No need to be defensive, your OP lists a lot of good tips for novice carbuyers.

dcwilbur said: mrblackpcs2 said: my question to you is why subscribe to a thread if you arent gonna make any viable input to it?If you frequented the finance forum, you would know that the focus here is on getting a good deal, saving money, maximizing value, increasing net worth, etc. While negotiating a great deal on a new car is certainly better than simply paying MSRP, it is inherently a BAD financial decision. I think that point deserves mentioning.

i agree with both you guys. thats why i have a thread that focuses on used cars and how to get the best deal on those as well. Simply saying buy a used car for 3400 isnt sound.
example

msrp=3400
blackbook=1100
negative equity=2300

Well, by the time I found this thread, you ARE in FWFinance, the only place I read/post. Lots of great info. Thanks. Don't sweat the spell-check hits, as the info is powerful on its own. I'm glad to have this laid out plain, even through my bank (USAA) offers to negotiate price for me once I've found a car I like. -Zer (editor/proofreader who usually twitches when I hit typos, but none of yours bother me at all as I skimmed for pure powerful info on a very mysterious activity) mrblackpcs2 said: bumb***guess i should have posted this in the finance section

crash22 said: Good advice - except when it comes to extended warranties - never buy 3rd party warranties.

If you're buying a warranty, ONLY buy the warranty from the manufacturer (if you're buying a Ford, get a warranty from Ford, if you're buying an Acura, get a warranty from Acura). 3rd party warranty companies come and go far too often.

You can buy the warranty from any dealership, you don't have to buy from the dealership you purchased your car from. Plenty of dealerships offer their manufacturers warranty on the internet at rock bottom prices.

Example of 3rd party warranties and what can happen after they have your money - Warranty Gold

the extended warranty u get from the dealers are the same that u can get online. TRUST ME! I use to sell them
And some warranties cover things the factory doesnt

MFGs dont sell extended warranties the dealers do

[Q= said: crash22]A manufacturers warranty (purchased though a dealer, either on-line or in person), is not the same as a 3rd party warranty.

Warranty Gold was a 3rd party warranty company that sold warranties for all brands, they went under, if you had a warranty from them it became worthless.

Ok there are many reputable extended warranty companies. Again MFGs dont sell extended warranties. The Finance Guys make their money buy jacking up the prices on these extended warranties. Some MFGs endorse certain warranty companies. For example Ford backs ESP, but this company is not owned or operated buy ford. In fact its the same company that owns Honda Care, Daimler Chrysler extended warranty, and others. My point is you can purchase the same extended warranty (if you feel you need one) that the dealership will push on you for cheaper, online.

crash22 said: mrblackpcs said: My point is you can purchase the same extended warranty (if you feel you need one) that the dealership will push on you for cheaper, online.

Agree on that, but be careful who you buy from. I agree a dealer will try to jack up the warranty cost, but you can get it from them at a good price, if you know what a good price is and are decent at negotiating.

Just for fun I pulled a quote from click4warranty.com on a car I recenty purchased, their quote was outrageous (much much higher than what the dealer offered the warranty for).

Based on the quote I saw from click4warranty, they are a huge rip-off.

The dealer I purchased the car from offered the MFR's warranty for within about $200 of what I can get it for on-line (exact same warranty, from another dealership).

and you ended up financing the extended warranty?

Honda care is owned by American Honda Finance Corporation. The servicing company may be the same that services the Ford and Crysler plan, but it is not the same as owned by the same company.

Third party warranties are not warranties but re-insured insurance plans.

mrblackpcs said: [Q= said: crash22]A manufacturers warranty (purchased though a dealer, either on-line or in person), is not the same as a 3rd party warranty.

Warranty Gold was a 3rd party warranty company that sold warranties for all brands, they went under, if you had a warranty from them it became worthless.

Ok there are many reputable extended warranty companies. Again MFGs dont sell extended warranties. The Finance Guys make their money buy jacking up the prices on these extended warranties. Some MFGs endorse certain warranty companies. For example Ford backs ESP, but this company is not owned or operated buy ford. In fact its the same company that owns Honda Care, Daimler Chrysler extended warranty, and others. My point is you can purchase the same extended warranty (if you feel you need one) that the dealership will push on you for cheaper, online.

blueiedgod said: Honda care is owned by American Honda Finance Corporation. The servicing company may be the same that services the Ford and Crysler plan, but it is not the same as owned by the same company.

Third party warranties are not warranties but re-insured insurance plans.

you feel you need one) that the dealership will push on you for cheaper, online.

I dont see where american honda owns Honda Care. I see its product they offere just like many other providers offer it. Whats important is the serving company, who actually decides if the car gets fixed.

after some digging it look like a joint venture between American Honda and GREAT AMERICAN ASSURANCE COMPANY...i'll keep looking for who actually fills the claims

Isn't "this" month the end of the model year? Or is it September or October? Or starting now on a sliding scale (price) through October?

MrCap said: Isn't "this" month the end of the model year? Or is it September or October? Or starting now on a sliding scale (price) through October?

Different times for different cars and different makes

MrCap said: mrblackpcs, welcome to the internet. You expect everyone to be that savvy?

lol..yea i know...reading the first page is tough