Last post on Dec 28, 2009 at 8:29 AM
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#149 of 158 Re: Negotiating when paying Cash [randyinalabama]
Mar 16, 2008 (2:52 pm)
Normally a cash buyer will pay more for a car as listed on the buyers order.
Car dealers have back door deals with banks to steer a customer to them for financing from any where from $150.00-250.00 for each approved loan. Multiple banks compete with the dealer to provide car loans. The more banks competing the higher the back door deal or kickback. Also the dealer will bump the interest rate the bank quotes up 1/2 to 1% to make an added profit off the loan.
#150 of 158 Re: Negotiating when paying Cash [isellit]
Mar 17, 2008 (11:46 am)
Do your research first, shopping next. If I go in with good info that my credit union will finance me for rock bottom rate (say 3.99% .. it was 4 years ago) I'll give the dealer a chance to match that if they start off higher. If they can bump the bank quote .5-1% and still beat my rate, then I've saved money. If they can not at least match the rate, I'll run the paperwork around. Last time I financed the dealership had a bank that to quote them "did not want to lose any loans". I told him my deal from the credit union (3.99%, no loan fee) so he pulled out his book that showed current local deals and verified the details and matched it. If they paid him a few $$ to get the loan that is between them.
Research beforehand and then you know if they are trying to screw you on the deal. Example, if I plan on going 5 years at best rate, 3.99% in this example, I check my financial calculator... $1000 3.99% for 5 years is $18.41/month. So, if I decide on something that the total financed would be $20K then I know my payment should be $368.20 or at least within a couple $ of that. When the dealership starts claiming to be at those terms but is saying it will cost you $425/month then you know they are possibly packing mop & shine, or something else that you are not planning on. You also make sure they are not quoting you a 72 month payment to get down to that... Just don't let your guard down or it might not work out as 'planned'.
#151 of 158 Bank financing question
Dec 24, 2009 (8:50 pm)
Please help as this is a little worrying and don't know what to do
I bought a car yesterday by bank financing. I was already approved and did have a loan account number. The dealer whilst processing did a new loan application (i think) and now my account online shows two applications for a loan. The dealer was supposed to use the already approved loan that I had.
since i am doing this for the first time some questions-
-is this the norm? will my bank see this application from the dealership yesterday and basically consider this as the original application for auto loan that i had applied for or will it consider it as a new application?
the reason i ask is that my original application was all clean and good to go. this new application that came in yesterday from the dealer whom i bought the car from has one document required which i cannot provide.
Just to simplfy since i know this is a little confusing--
-on the 4th of this month i had applied for an auto loan with my bank. approved and all doc problems solved, i was good to go.
-went to dealership yesterday, told them i have bank approval, they said fine, fill in the paperwork, all went through
-i came home and logged online to my bank account and now see 2 applications
-wondering if now the new application is going to be a problem as the bank will void the old one that i had got and was clean
Thanks much for your responses, really worried here.
#152 of 158 Re: Bank financing question [carbuyerwa]
Dec 28, 2009 (8:09 am)
this new application that came in yesterday from the dealer whom i bought the car from has one document required which i cannot provide.
You havenít said what the document is that you canít provide. If that is a personal thing you donít have to say what it is here but I would call the bank to see if they can clear this up.
If you already got approval for a loan from that bank I donít think you would have a problem but Iím not in the biz.
If you hang on a little longer a salesman may show up. A call for help by the host went out to another forum and there are some pretty savvy people that hang out here at Edmunds but I canít see why a call to the bank will hurt.
Good luck and donít worry, itís only a car purchase. Paper problems can always be fixed.
Dec 28, 2009 (8:17 am)
Its a doc that shows i paid off my charged off account that shows on my credit report. but i have disputed that fraudalent charge. so i dont want to pay them.
i am going to call the bank, hopefully they can clear this.
#154 of 158 Re: Bank financing question [carbuyerwa]
Dec 28, 2009 (8:29 am)
OK, you can relax.
No smart dealer will assume that when a customer tells them their loan is "Pre Approved" that it's a done deal.
To protect themselves, they will have the customer fill out an application. They will then have an "Option Contract" ready to go just in case the "Pre Approved" loan doesn't go through.
No, I hav never had this happen but it does happen.
The dealer faxes the information to the customers' lender and the lender delwys paymnet fotr some reason or they decide they want to throw some "stips" in before they approve the loan.
So the dealer doesn't get paid. The dealer will then call the customer and they will prod them to get thier lender on the ball. We do like to get paid!
As a last resort, the dealer can use the Option Contract fo fund the car deal.
As far as your chargeoff that has now been paid, it couldn't have hurt you too bad or you wouldn't have been approved. If a person has otherwise good credit the lenders will assume it was a mistake of some kind.
I wouldn't be worried.