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Smart Shopper Credit Scores and Vehicle Financing
935 messages, Last post on Jul 28, 2009 at 1:12 PM
You are in the Smart Shopper Forum. Your Hosts are kirstie_h & tidester
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Replying to: tkcolorado (Sep 10, 2007 5:47 pm) tidester, host SUVs and Smart Shopper |
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Replying to: casolorz (Sep 10, 2007 1:57 pm) |
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Replying to: tkcolorado (Sep 10, 2007 5:47 pm) On $1000 a month income it will be very tough for you to qualify, and if you did you would only qualify for something in the $180 a month range. So with that being said, if you do a 72 month loan  a 6% rate with $4000 down and were able to get $1000 for your trade that means you could buy a car for $14600. if you looked at a new car that had like say a 1.9% rate for 72 you could look a $16K car. It will differ a little, my calculations are based off of TN taxes. BTW is that $1000 based on take home pay or is that gross? |
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Replying to: casolorz (Sep 10, 2007 1:57 pm)
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Replying to: nthe (Sep 11, 2007 6:41 am) |
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Hey guys, how does pre-financing work? I go to the bank or credit union and I apply for a car loan. Assume I get approved and receive a check for a specific amount. Now I go to the dealership, discuss the price of the vehicle, sign the check for an amount less than the preapproved amount and pay the difference in cash (my down payment?). Now the bank will know how much I signed the check for and will adjust my payments accordingly. Is that how it works? Plus does this loan work like a typical car loan in that the bank holds the title until you pay it off? Can I not treat the loan as spending cash and buy the car with it and have full ownership to the car while i'm paying off the loan? As you can tell, I don't take loans on a regular basis. |
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To Dealership Personnel: I'm very curious. Does anyone care to share the manner in which reserves are computed at your dealership? There are a variety of methods that are used. I understand that reserves reflect the compensation paid by the fund provider to dealers as a reward (incentive- form of dealer participation) for charging the customer a contract rate that exceeds the buy rate. The rate sheet often reflects a tiered rate stucture that pairs rates with their associated reserve level. A few methods used to compute reserves, applicable whether one buys or leases, are illustrated as follows... Total Finance Charge Differential 1st. Compute the total finance or lease charge, based on the actuarial rate, using the base payment computed at the contract rate. 2nd. Compute the total finance or lease charge, based on the actuarial rate, using the base payment computed at the buy rate. 3rd. Subtract the amount in (2) from the amount in (1). 4th. Multiply the amount in (3) by the appropriate % to determine the reserve payment. Present Value of Payment Differential Other methods determine the difference between the present value of the payments computed at both the contract rate and the buy rate using the appropriate actuarial rate or constant yield rate. This difference is multiplied by the appropriate % to determine the reserve payment. Reserve Level Method This is the simplest method and involves multiplying the reserve level, say 1%, by the net amount advanced. Your thoughts??? John Medina, Ohio
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Replying to: master_ryu (Sep 15, 2007 4:30 pm) With this information you go to the dealer. You make him the offer of beating that rate and payment. He either will or won't and that will decide for you who you give the loan business to. The only time I remember a dealer not at least meeting the bank rate was on my daughter's car which would not qualify for financing as a car (too old). Once you are in unsecured loan it's another ball game.
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Replying to: fezo (Sep 16, 2007 9:19 am) That has little to do with my question. What do you know about reserve calculations? John
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Replying to: delta737h (Sep 16, 2007 10:47 am) Why would it have anything to do with your question? Fezo was responding to someone else's entirely different question. tidester, host SUVs and Smart Shopper
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