Also, what kind of APR can I expect to pay?
The car is a 2007 charger rt (about 30k with the options i want) and i'm going to put 5k down
I'm about to buy a car. What's the best way to finance it? Auto loan or through a dealership? Check to see if the dealership has good promos on APR. Then check to see if you are eligible. Many promos that the dealerships offer are for people with 750+ credit score.
If you don't have the best score, go to a credit union or a bank and get pre-approved so you are not stuck with the APR that the dealership has to offer.
You can also go to Lending Tree where you can get up to 4 offers and take the best one.
I'm about to buy a car. What's the best way to finance it? Auto loan or through a dealership? Whoever gives you the best terms. The only way to find out is to check several sources.
I'm about to buy a car. What's the best way to finance it? Auto loan or through a dealership? This is not an easy question without more info. If your credit is good, see what the dealership's offer is to you. Also, ask if the factory (Chrysler financial) has any special a.p.r. financing such as 4.9%. Before you go to the dealer finance department, check to see what your bank and/or credit union will offer you. This is your bargaining chip at the dealership.
If your credit isn't so good and you get stuck with a high interest rate (18% for example) just don't buy an expensive car. Try to stay under $15k so the payments will be reasonable.
As an example, with good credit you can borrow $25k for 5 years at 7% for just under $500/month. With poor credit and an 18% rate, it will be $635/month or a whopping $8,100 of additional interest!
Best of luck!
I'm about to buy a car. What's the best way to finance it? Auto loan or through a dealership? Credit unions are the best resources for financing. A lot of credit unions will give you the same rate for any loan term (36,48,60 and 72 months). Your APR will depend on credit score, previous autos financed, loan to value, down payment, time on the job, current income. But, check with a local credit union and they will tell you exactly. If the dealership can beat the credit unions rate and terms then you can always go with their financing. Visit the credit union first. Good Luck !
I'm about to buy a car. What's the best way to finance it? Auto loan or through a dealership? The common misconception is that the dealer finances you. He typically (95%) does not. Espcially at name-brand dealers like Dodge. Instead, the dealership will arrange financing for you. The dealership has a business realtionship with nearly all of the lenders (banks, credit unions and others) in your area. Instead of taking the time to run all over town and see different lender rates, the dealership will do it for you.
What happens is this: (Keep in mind that it would still be to your advantage to know what your credit score is and thus the rate range you'd qualify for)
At the dealership you'll fill out a credit statement.
The Finance Manager will look at your credit history and FICO number.
Based on this information and the managers assessment, he'll present you a payment range based on an APR that he's sure he'll be able to get you. Credit Unions offer the lowest interest rates, banks next.
Many time, the manufacturer will offer special financing, and i think this is what people are referring to when they talk about dealer financing. It's not the actual dealer, but rather the manufacturer. For Nissan dealers the finance company is Nissan Motor Acceptance Corportation. Dodge is Chrysler Financial. Ford is Ford Motor Credit. Etc....
But, if you get special financing from the manufacturer you'll lose any factory rebates. You don't get both. And on a Charger r/t you're probably not going to get rebate or special financing anyway.
So, the dealership can arrange the financing for you. They do this for two reasons. First, it's easier for them to get you bought and they know that you'll take the car right now. Secondly, the lending institution that they send your business to will pay them a fee for it. There is a caveat. If a dealership arranges financing for you they can %26quot;hold points%26quot;. This means that if you qualify for an interest rate of 7.9% the dealership can contract you at +2 points or 9.9%. They then would make their money off of the extra 2 points you're paying in interest. This applies for BANK financing only.
Credit Unions do not allow dealership to contract people at any rate other than what the CU offers. This is to protect the customer from paying too much interest. So the CU's will pay the dealerhsip a flat fee (around 200 bucks) for sending your business to them. After the loan is approved, the title goes to the CU, the CU cuts the dealership a check for the full amount and you make payments to the CU. The dealership is out of the picture.
It is a good idea, then, to make sure the dealership will arrange financing for you through a credit union, because then you know that they aren't making any money off the interest rate. Plus, it's in the dealers best interests to show you the lowest monthly payment possible, b/c then you'll be more inclined to purchase the car.
In AZ, if you have A+ credit (740 and above) you can expect an interset rate on a new car at 6.9% for 60mos or 7.5% for 72 (on average; different credit unions have slightly different rates)
So if you were financing 28,000 (30K less 5K plus tax, title, license, doc, etc)
60 mos at 6.9% = 553.11 (with a total of 5186.81 in interest paid)
72 mos at 7.5% = 484.12 (with a total of 6856.87 in interest paid)
Quite a difference from month to month with only one extra year.
So know your credit score. Then have the dealerhsip arrange financing for you. Make sure they send your business to a credit union.
Enjoy your new car....
I'm about to buy a car. What's the best way to finance it? Auto loan or through a dealership? Pre-approved car loan, from a credit union preferrably.
