Financing Q (G|Aers are smart... i hope) =)

JLemonjello · 03-31-2005, 02:28 AM

OK, so I am in the market for a new car and I'm pretty sure I've decided on a new Mazda3s. However, here is my question....

I have a loan secured that gives me X dollars every year for 4 years.

I need to finance a car from a dealership but I am under the impression that when you do that, the lender gives the full amt to the dealer up front and you pay off the lender. My situation is different, I don't want an EXTRA loan, I already have the money (well, I am getting it over the next 4 years), I just need a payment plan per se. Does that fit in with how financing really works or no?

I'm just confused about this whole financing thing and maybe you all can shed some light on it for me.

Thanks!

Merlin · 03-31-2005, 05:57 AM

So if I understand what you're saying - You want to use dealer financing to buy the car then pay it off with the other money you have coming in. Is that right?

If so then yes, it should work. Just make sure the payment times are well matched if you can. Also check the different interest rates as well as loan fees. You might get some savings from a better rate but loan fees could eat that up pretty fast making the whole exercise fairly futile.

InfiniteNothing · 03-31-2005, 11:26 AM

Quote:

Originally Posted by JLemonjello

OK, so I am in the market for a new car and I'm pretty sure I've decided on a new Mazda3s. However, here is my question....

I have a loan secured that gives me X dollars every year for 4 years.

I need to finance a car from a dealership but I am under the impression that when you do that, the lender gives the full amt to the dealer up front and you pay off the lender. My situation is different, I don't want an EXTRA loan, I already have the money (well, I am getting it over the next 4 years), I just need a payment plan per se. Does that fit in with how financing really works or no?

I'm just confused about this whole financing thing and maybe you all can shed some light on it for me.

Thanks!

Your first loan sounds highly unusual. How would you be paying for that loan? Monthly?? At the end? Up front?

ufcrusher · 03-31-2005, 01:54 PM

I am a bit confused as well. Generally, when you finance a car, you borrow the full amount and pay it back at the proscribed rate. The note on the car is held by the finance company until you are paid in full at which point they remove themselves from the note and hand it over to you. (I.e. - your title says Me and Ford Motor Credit)

If I understand you right, you have secured a loan, but will only get the money dispersed in monthly increments. so month 1 you get $1, month 2 you get $1 month 3 you get $1, at the end of the 3 year loan you will have gotten $36. This frankly sounds more like a money disbursement than a loan. (As in you have won the lottery, won a legal settlement, or some other similar thing where you will get all the money as the other person pays it)

If my understanding is correct, I cant see how you could avoid taking out a second note. As someone needs to pay the full amount to the car. Thus, you will end up owing money to Ford Motor Credit* and your other lendor. You will be leveraging the one loans payments against the other, but when are you paying the second loan off?

In the event that you did win an award that is giving you money over time, there are groups who will buy off your note and give you a lump sum amount up front. Obviously, you end up getting less money then you would have, but you get it all at once which is more useful.

* Ford and Mazda are under the same umbrella in case you are wondering why I keep saying Ford.

JLemonjello · 03-31-2005, 03:14 PM

I just asked my dad today and he is saying there is no way to avoid paying off the second note as well. I just use Loan 1 to pay off Loan 2 (loan 2 being for the auto, through the financing)

Thank you guys for all your help!

InfiniteNothing · 03-31-2005, 03:16 PM

Why use loan 1 at all?

palayah8ta · 03-31-2005, 03:49 PM

Im at work right now (Bank of the West), u can only use the future income as extra income on a credit application. But u cant secure a loan just off of that. Ur making it complicated. Do what merlin sed:

"If so then yes, it should work. Just make sure the payment times are well matched if you can. Also check the different interest rates as well as loan fees. You might get some savings from a better rate but loan fees could eat that up pretty fast making the whole exercise fairly futile."
Direct deposit the incoming funds, and have the automatic pay debit ur account the next day. U wont see any of it. A lender will not enter in a contract with a 3rd party.

BTW...Mazda3...why?!? Get a Honda, ull thank me later..

03-31-2005, 02:28 AM	#1
JLemonjello Lieutenant Junior Grade Join Date: Jul 2003 Location: Ohio Posts: 157	Financing Q (G\|Aers are smart... i hope) =) OK, so I am in the market for a new car and I'm pretty sure I've decided on a new Mazda3s. However, here is my question.... I have a loan secured that gives me X dollars every year for 4 years. I need to finance a car from a dealership but I am under the impression that when you do that, the lender gives the full amt to the dealer up front and you pay off the lender. My situation is different, I don't want an EXTRA loan, I already have the money (well, I am getting it over the next 4 years), I just need a payment plan per se. Does that fit in with how financing really works or no? I'm just confused about this whole financing thing and maybe you all can shed some light on it for me. Thanks! __________________ =========== Jason Lemonjello "Insert witty signature quote here."

03-31-2005, 05:57 AM	#2
Merlin Admiral Join Date: Dec 2001 Location: Square On My Arse Posts: 7,410	So if I understand what you're saying - You want to use dealer financing to buy the car then pay it off with the other money you have coming in. Is that right? If so then yes, it should work. Just make sure the payment times are well matched if you can. Also check the different interest rates as well as loan fees. You might get some savings from a better rate but loan fees could eat that up pretty fast making the whole exercise fairly futile. __________________

03-31-2005, 01:54 PM	#4
ufcrusher Admiral Join Date: Jul 2000 Location: Boca Raton, FL: By way of: Poway, CA; Gainesville, Fl; Penn Valley, Pa. Posts: 5,680	I am a bit confused as well. Generally, when you finance a car, you borrow the full amount and pay it back at the proscribed rate. The note on the car is held by the finance company until you are paid in full at which point they remove themselves from the note and hand it over to you. (I.e. - your title says Me and Ford Motor Credit) If I understand you right, you have secured a loan, but will only get the money dispersed in monthly increments. so month 1 you get $1, month 2 you get $1 month 3 you get $1, at the end of the 3 year loan you will have gotten $36. This frankly sounds more like a money disbursement than a loan. (As in you have won the lottery, won a legal settlement, or some other similar thing where you will get all the money as the other person pays it) If my understanding is correct, I cant see how you could avoid taking out a second note. As someone needs to pay the full amount to the car. Thus, you will end up owing money to Ford Motor Credit* and your other lendor. You will be leveraging the one loans payments against the other, but when are you paying the second loan off? In the event that you did win an award that is giving you money over time, there are groups who will buy off your note and give you a lump sum amount up front. Obviously, you end up getting less money then you would have, but you get it all at once which is more useful. * Ford and Mazda are under the same umbrella in case you are wondering why I keep saying Ford. __________________ Welcome my son, welcome to the machine...Where have you been? It's alright we know where you've been....

03-31-2005, 03:49 PM	#7
palayah8ta Lieutenant Join Date: Apr 2002 Location: So Pasadena Posts: 423	Im at work right now (Bank of the West), u can only use the future income as extra income on a credit application. But u cant secure a loan just off of that. Ur making it complicated. Do what merlin sed: "If so then yes, it should work. Just make sure the payment times are well matched if you can. Also check the different interest rates as well as loan fees. You might get some savings from a better rate but loan fees could eat that up pretty fast making the whole exercise fairly futile." Direct deposit the incoming funds, and have the automatic pay debit ur account the next day. U wont see any of it. A lender will not enter in a contract with a 3rd party. BTW...Mazda3...why?!? Get a Honda, ull thank me later.. __________________ George Dubya Quotes: "It's clearly a budget. It's got a lot of numbers in it." -Reuters, May 5, 2000 "They misunderestimated me." -Bentonville, Ark., Nov. 6, 2000

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03-31-2005, 03:14 PM	#5
JLemonjello Lieutenant Junior Grade Join Date: Jul 2003 Location: Ohio Posts: 157	I just asked my dad today and he is saying there is no way to avoid paying off the second note as well. I just use Loan 1 to pay off Loan 2 (loan 2 being for the auto, through the financing) Thank you guys for all your help!

03-31-2005, 03:16 PM	#6
InfiniteNothing Chief of Naval Operations Join Date: Aug 2002 Location: San Diego Posts: 10,086	Why use loan 1 at all?

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