question about financing?

[g222leav]

Hey guys, i'm just trying to reseach some information. for all you car owners who had to finance...what was the interest rate that you were able to lock for your car loan? i'm just trying to find out what an average loan would be and what a "good" loan rate would be.

currently, my credit score is above 700, i only have balances on two credit cards...i'm probably going to put down $2500 towards a car that cost about $25000 (probably an rsx or something like that)

so yea...

what interest rates did you guys get?
what is a decent interest rate? (loan period too)
is a 10% down payment good enough? i heard 20% is better?

thanx

[Mike_N_Ike]

You can usually get a decent rate up to 60 months. After that, depending on the bank/credit union - it may go up a little bit.

The average rate I've been seeing for a car loan is in the 5 range over the last couple months. People who have financing through their own banks or credit unions, or who have excellent credit, can usually get a bit better than that. There is a credit union around here (OCTFCU) that is offering 4.5 or something of that nature. The absolute best I've seen in the last couple months was a 4.24, but I don't recall which credit union it was. Anything less than that is going to be a special promo that the car manufacturer is having - meaning that they're essentially paying the difference between what they're charging you and what they're actually paying for interest - in an attempt to move a particular type of car.

Basically, if you have decent credit and any estabilished (and good) auto credit history, you should aim for something in the high 4s. The amount your payment is going to differ on a 20,000 dollar loan between a tenth of an interest point is only a couple of dollars though, so if you can get something in that area, you should be alright.

The down payment is going to depend on your credit situation and which bank you go with. With excellent credit, it really doesn't make a difference...you can put 0 down if you want. If this is your first car purchase that shows up on your credit report however, it may be easier to get a lower rate with 20% down.

One other tip - if you end up going through the financing at the dealer, make sure that when you're looking for the rate you keep the negotiation in terms of the apr, and not the monthly payment. It's easier to keep track of things that way.

Good luck!

[mcs328]

6 years ago my interest rate was 3.9 for 4 years. I put 6000 down on Honda Civic EX and my loan came to be about under 12000.

[g222leav]

well, i tried eloan.com and captialonefinancing.com and here's what i got offered...keep in mind that appearently i have a low income-to-debt ratio...which basically means that because i'm a student i don't have enough income for the lower rates...but i got approved for loans from both places, but i just wish it were lower...

from eloans:

$15,000 = max loan
7.38% = interest rate
72 mos = loan terms
$278/month = monthy rate

from capitalone

$23,000 = max loan
10.72% = interest rate
72 mos = rate terms
$455/month = monthy rate

as you can see, the interest rates are high...and they're for 72 months...i really don't want to be paying so much for 6 YEARS...argh...sucks being a first time buyer ontop of being a student....

when i called to verify, they said i had excellent credit....i just didn't have enough monthy/yearly income for the lower rates (and for shorter loan contracts)

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so what's your guys opinions? - since i'm assuming that i'll have to bend it over at the financing dept at the dealer if i go through them.

[sizemic1]

well..there's nothing stopping you from paying a little extra every month to get the loan paid off in 60months. You may want to try getting financed at the dealership. We ended up getting a better deal through them than any outside lender.

[g222leav]

well..there's nothing stopping you from paying a little extra every month to get the loan paid off in 60months.

true, i know...and there's no pre-payment penaties either...i "almost always" pay way more than is due on all my accounts...probably why my credit is good...if i do get a car, i'm most likely going to pay more than is due to pay off the debt as fast as possible

[InfiniteNothing]

well, i tried eloan.com and captialonefinancing.com and here's what i got offered...keep in mind that appearently i have a low income-to-debt ratio...which basically means that because i'm a student i don't have enough income for the lower rates...but i got approved for loans from both places, but i just wish it were lower...

from eloans:

$15,000 = max loan
7.38% = interest rate
72 mos = loan terms
$278/month = monthy rate

from capitalone

$23,000 = max loan
10.72% = interest rate
72 mos = rate terms
$455/month = monthy rate

as you can see, the interest rates are high...and they're for 72 months...i really don't want to be paying so much for 6 YEARS...argh...sucks being a first time buyer ontop of being a student....

when i called to verify, they said i had excellent credit....i just didn't have enough monthy/yearly income for the lower rates (and for shorter loan contracts)

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so what's your guys opinions? - since i'm assuming that i'll have to bend it over at the financing dept at the dealer if i go through them.

That E-loan looks fine. I'd go with that.

I used this calculator (http://www.cu-village.com/village_calculators/calculators/clcr.html?CostOfVehicle=15000&DownPayment=0&TradeInValue=0&InterestRate=7.38&NumberOfMonths=48&AdditionalPrincipal=0&calculate_option=0) to determine $361.84 is what you need to pay/mo to pay it off in 4 years.

[g222leav]

That E-loan looks fine. I'd go with that.

I used this calculator (http://www.cu-village.com/village_calculators/calculators/clcr.html?CostOfVehicle=15000&DownPayment=0&TradeInValue=0&InterestRate=7.38&NumberOfMonths=48&AdditionalPrincipal=0&calculate_option=0) to determine $361.84 is what you need to pay/mo to pay it off in 4 years.


yea, i'm going to see what acura can offer me...if i can't get a decent deal, i might settle for a civic ex

for those interested...i uploaded a little excel calcuation tool that gilks made for me which i've edited a bit...you can throw it into a ms-based pda and verify the numbers...or do some number crunching of you're own..

calculator (http://home.comcast.net/~g222leav/loancalculator.xls)

[billxp]

Just remember that EVERYTHING at the dealer is negotiable. EVEN the interest rate is most of the time.

Especially if the financing is not being provided by the car manufacturer.

In NY it is legal for the dealer to raise the interest rate up to 3 points on the loan.

[g222leav]

howdy, it's update time...

i'm finally ready to actually purchase the car...and it looks like things are finalizing...i'll hopefully have the car by wednesday.

I'm getting the RSX i wanted...the internet dealer and I have already settled on the price and we're working on the financing (i haven't even been to the dealership yet). Here's there offer:

MSRP: 21920
Invoice: 20037
OFFER: 20537
...after tax, title, liscense it comes to 22150
-with it being the end of '05 season (i guess) it was really difficult to even find a car...and this was by far the best price being offered...it was lower than what I had even expected.

edit: i'm planning on putting 4K down, so the loan amount is going to be about 18150


anyways, i got approved for another e-loan (especially since i get a good raise within the last 2 months)...

here's my question?

the dealership is offering to finance me for "at least" one-point lower than e-loan...obviously if that is the case, i'll get financed through the dealership. but the thing is, my friend has a honda and is financed through honda of america...she get's penalized for early/extra payments whereas e-loan has no penalties for early/extra payments. i know that honda/acura are pretty much one in the same...

...is the one-point decrease in apr worth it...IF...i can't make early payments?

if i can make early payments eitehr way, it's no biggie...but if it isn't i'd like to know the best course of action before hand?

[billxp]

Well you need to read the fine print.

Also just because the dealer is offering the financing doesn't mean its through American Honda, may be from another bank the dealer is using. Also make sure to add up the total cost of the car after financing. Payments x term + any upfront costs. Its the only way to compare apples to apples.

[bachviet]

I wouldn't pay more than 5% on a car loan right now. I'm pre-approved for a $50K auto loan at 4.25% APR (up to 48 months), 5.25% (48-60 months), or 5.75% (60+ months) from a credit union.

[speedracer120]

here's my question?


I got financed by Honda's finance unit. Before you sign the papers, ask the finance guy if there is a penalty for early payment and such. My loan doesn't have any penalty for early or extra payments, it just drops the monthly payment down, until you actually pay the minimum and it jumps back up to the amount you agreed upon signing of the loan.

[wung]

i had a friend who got the extended warranty with his car and the dealer was willing to lower the interest rate ... which paid for the extended warranty ... maybe it's something you also want to ask about ...