Completely non health & fitness related....new car....

DizzyLinds

So I'm thinking about buying a new car. I've been told to get a personal loan instead of the finance through the car dealer.

Does anyone have any advice?

cobracars

Traditionally the financing offered by the dealer is a huge profit center for them, meaning a larger expense for you.

When you are negotiating the price of the car it is in your favor to only be negotiating ONE thing, and that's the actual price of the car.

When you have a trade-in the value can go up or down to suit the dealer's needs.
When you finance through the dealer the cost of the finance can go up or down to suit the dealer's need.
And the price of the car you want to buy can be adjusted up or down to suit the dealer.

Say the dealer wants to get $20,000 out of you. You are looking at a car that is $20,000 but you only want to pay $18000. The dealer might tell you they can come down to $18k, but you'll end up paying $2000 more on the financing side, or they will give you $2000 less on your trade in. You think you got the car for $18k but really you are spending $20k.

Take the financing off the table, get your own loan. Take the trade-in off the table, sell your car yourself. Then when you want that dealer's car for $18,000 you are truly negotiating for just the price of that car.

DizzyLinds

Thank you! I also think they make something back to if you were to give them the car back in a few years time for another one.

MzBug

My guy recently had to get a new car. He researched for a couple weeks on the financing issue as well as the car he wanted. He talked to his credit union, to our household account traditional bank, to his credit card company, investigated through his work, and through his ex-military banefits. He has an outstanding credit rating, and the best offer all of the above could give him was 6.5% for 36 months. Once he decided on the car he ckecked thier financing.... 1.9% for 36 months. He went for the dealerships financing option. He pays an extra $50.00 a month on his car note so he will be paying it off earlier, so that will save on the interest payed also. Good Luck!

saustin201

Pay as much as you can up front because it will reduced the size of the loan. Pay a bit extra each month which will save you interest payments. Don't do the 72 months loan period. You car will not be worth much and you're still paying for the new price.

Do your research. Every time we've bought a new car we research for weeks. What car? What financing? Fuel consumption? etc...Be informed. Don't let anyone use you. If the car is used, take it to a mechanic, YOUR mechanic and have it checked out. Don't trust the dealership to say it's sound. When my hubby negotiates a price with the dealer he down right insults them. It's embarrassing, but has saved us thousands of dollars off the price of a car/van/whatever.

My hubby almost bought a used car for his elderly aunt. The dealership said it was in perfect "like-new" condition. My hubby always take the cars to be checked over by our mechanic. Guess what? The entire chassis was rusted out and the floor area beneath the driver was almost rusted right through to the ground. My hubby told the dealer the car was dangerous. They did nothing about it. That car sold a few months later to someone else. I am hoping the new owners aren't dead because the car rusted through. So definitely take it to your mechanic and have it checked out. Where I live the inspection fee for this service is usually a standard $50 which is well worth the price if the car is in need of a new transmission or engine and dealer doesn't want to tell you that.

chelledawg14

Actually, used cars now ARE holding value so having a 72 month loan isn't as big a deal as it used to be. I did this on my last car with no money down when purchased (Jeep Compass). I traded it in after three years and made a $700 profit to put down on my new car. If you look at the prices of used cars, it's insane. You can buy new cars for nearly the same price as ones that are 2-3 yrs old, at least in my area.

YoungDoc2B

Go through a credit union, they normally supply lower rates.

DizzyLinds

I'm in the UK and I'm dealing with BMW if that makes any difference to people's thoughts. The car is two years old from a main dealer. I'm not surevwhatva credit union is?!