Let card report or get a loan before?

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CarefulBuilder14
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Postby CarefulBuilder14 » Sat Nov 15, 2014 10:47 pm

flan wrote:Car dealerships can give you a good deal, and they can screw you. And they're full of people who lie for a living, so it's kind of hard to know if you're getting a good deal, or not, unless you have a good idea what you can get elsewhere.


It's an industry with some interesting incentives. My first car was a hand-me-down freebie, so I've only actually bought one car in my life from a dealer (a Subaru Legacy, lightly used). It was in my pre-credit days, and I paid with a debit card.

*Brief grumbling about what I could have gotten on a PRG (after an FR).* At least I didn't pay interest.

The price was fair, but slightly above the market. The internet and the availability of used cars do make dealer margins pretty thin, so it makes sense that they want to move cars ASAP. What a salesman can make on a used car has, I believe, fallen since there's not as much room for commission. So they need to sell more cars, and therefore sell each car quickly.

Car dealers definitely BS a lot. One thing I learned is that any time a dealer starts a sentence with "I think....X" or "I'm pretty sure...X" it means "I know X is absolutely not true, but I don't want you to go to another dealer". Assume they know everything, and that anything they won't put in writing is BS.

And don't put too much trust any "rigorous, 482-point inspection" claims. When I got mine, the door to the gas tank didn't open. It had been sitting on the lot for a while, and after a few test drives by customers, it was down to about 5% of a tank when I picked it up. So the inability to put gas in the car was a second annoying surprise that day.

Some light hammering got the gas tank door working. Other than that, the car works well, and they've done decent regular maintenance on it. They've also actually told me that some maintenance wasn't immediately needed when I thought it was (and after some further research, I found they were right).

It's a tough business, and one where people need to compromise their honesty quite a bit to succeed. When a customer comes in, you can't find out what they need and suggest the best car for them. You need to convince them that one of the cars you're selling is best for them.

I test drove a lot of cars, including a Honda Civic. Well, I tried to test drive it. It was a small Honda dealership, and their inventory at the time was just Civics. I'm about 6'3, and as you might guess, I had never been in a Civic before. It's a small car, and I'd have had to steer with my knees in danger of blowing the horn. Did the salesman make any attempt to save me time (and a little embarrassment) by telling me I'd never fit? Of course not, because it would mean losing a customer. Selling cars just isn't a business that encourages honesty.
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Postby jrv » Sun Nov 16, 2014 1:55 pm

nismoZtuner wrote:I'll check some out, I know there's 2 in my city I'm hoping for something in the 1.99-2.8 range- hopefully that's isn't too much I'm hoping for ..


Always get pre-approval before walking into any dealership. That way you will know where you stand & be able to negotiate from a position of strength. When you negotiate the vehicle with the dealership, tell them you are paying cash or having financing in order. They will ask you what type of rate you are paying & will more than likely try to beat the rate that you have. It's in their interest to do so.
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Postby nismoZtuner » Mon Nov 17, 2014 12:51 am

popamode72 wrote:Sometimes when you apply for a membership with DCU, you'll get preapprovals after you're done. I already had a preapproval for an auto loan when I did that but the downside is having to take another INQ for anything else that they have.


I don't want to take extra inquiries. So hopefully if I do go for it I ace something under 2%
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Postby nismoZtuner » Mon Nov 17, 2014 1:00 am

Vattené wrote:For what it's worth, I was in a very similar situation as you when I financed a car in May. I was worried about the rate I would get, too, because even though I had a decent score I also had a thin profile with nothing but credit card & store accounts. This was just a few months into having my Discover card, so it was mostly store accounts with a much lower total available credit than you. I went through the dealership and got their top tier rate (1.9% for the model I got) with a 740 FICO.

EDITED TO ADD: I am 23.


Thanks hopefully I get the same, I went to the dealership to finally see the car in person but the sales guy didn't want to drop anything. I told him about making me a better deal and he's like "no we do not have to negotiate we are not a small corner lot". That same guy didn't know much about the car I wanted. But initially when I got in contact with the dealership I was talking with some body else- I'm gonna make that other sales person and offer and see where it goes.. On the credit side he said that I was not gonna qualify for a got apr and that my credit was not gonna help and didn't matter because the car is used. He just came up with BS
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Postby takeshi » Mon Nov 17, 2014 10:20 am

I wouldn't rely on dealership financing. As others have stated financing is another area where they can make money. I'd suggest getting your financing sorted out first so it's a known factor.

I just purchased a (barely) used car earlier this year and arranged financing through USAA. When it came to the financing part of negotiation the dealer didn't even bother trying since they knew they couldn't beat USAA.

nismoZtuner wrote:I don't want to take extra inquiries.

That's another reason to avoid relying on deealerships for financing. When you're working out financing it's all up to you. When the dealer does so they may incur you a number of pulls as they compare the different options.

nismoZtuner wrote:I'm guessing once those cards report a $0 balance my score may jump 20 or so points I think?

Current models don't factor charge cards into revolving utilization. However, auto lenders may use auto enhanced scoring models and I don't know how they handle charge cards. It also depends on your current utilization and how much the 0 balances would reduce your utilization.

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Postby jumbo » Mon Nov 17, 2014 10:25 am

Quick question:
I never have financed a car before. Planning on getting a new vehicle in a few months.
So, does getting pre-approved for a loan incur a hard inquiry on the credit report, or the hard inquiry is after using the pre-approved loan?
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Postby Xorand » Mon Nov 17, 2014 3:16 pm

jumbo wrote:Quick question:
I never have financed a car before. Planning on getting a new vehicle in a few months.
So, does getting pre-approved for a loan incur a hard inquiry on the credit report, or the hard inquiry is after using the pre-approved loan?


I suspect most places will do a hard pull to pre-approve a loan to determine the max amount they'll lend.

Side story on buying cars. When I bought my first car back in 1985, I was naive and blindly offered the asking price on a 1985 Dodge Conquest (Mitsubishi Starion) at a Dodge dealer. It had 11k miles on it and nearly bald high-end tires. I didn't know it at the time, as I was looking at replacing tires nearly right away, so I negotiated for the same price on the car but with a set of new tires thrown in.

The salesman really had no idea what he was selling me, as all the questions I asked about the car I could tell he just wasn't sure about it. He took the new tire requirement back to the sales manager, who also apparently wasn't very familiar with the car, either, and quickly agreed to the deal figuring "hey, what could four new tires cost"?

When they called me to tell me to come get the car, I could tell the salesman was a lot less enthusiastic about the sale, but the paperwork had all been signed. As I remember, the car cost about $15k and the tires were almost $1,600 mounted and balanced.
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Postby nismoZtuner » Mon Nov 17, 2014 3:27 pm

Xorand wrote:I suspect most places will do a hard pull to pre-approve a loan to determine the max amount they'll lend.

Side story on buying cars. When I bought my first car back in 1985, I was naive and blindly offered the asking price on a 1985 Dodge Conquest (Mitsubishi Starion) at a Dodge dealer. It had 11k miles on it and nearly bald high-end tires. I didn't know it at the time, as I was looking at replacing tires nearly right away, so I negotiated for the same price on the car but with a set of new tires thrown in.

The salesman really had no idea what he was selling me, as all the questions I asked about the car I could tell he just wasn't sure about it. He took the new tire requirement back to the sales manager, who also apparently wasn't very familiar with the car, either, and quickly agreed to the deal figuring "hey, what could four new tires cost"?

When they called me to tell me to come get the car, I could tell the salesman was a lot less enthusiastic about the sale, but the paperwork had all been signed. As I remember, the car cost about $15k and the tires were almost $1,600 mounted and balanced.


I remember seeing one of those cars in my street- its all dirty and has been sitting for years on a parking sport in a house.
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Postby nismoZtuner » Mon Nov 17, 2014 3:32 pm

takeshi wrote:I wouldn't rely on dealership financing.


I have accompanied 4 people (my dad, brother and some friends) before when they wanted to buy a car and every time Chase has been the one to offer best ARP but they didn't qualify because of credit stuff so they end up going with wells fargo. with chase i have a savings account, the Chase sapphire card and the Marriott premier rewards.


i think i shoud give them a try- when going will they ask for information about the car or do they just give me the amount for the car because if they give me a good deposit (cash) i can just swipe a card and get all kinds of points!
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Postby nismoZtuner » Mon Nov 17, 2014 3:38 pm

---CHASE---

"Exclusive rate discounts for Chase checking customers
Save a maximum of 0.50% off standard loan rates. Here's how:
Receive a 0.25% discount if you have a Chase personal checking account
Receive an additional 0.25% discount if you enroll in automatic payments and continue to have your monthly car loan payments automatically deducted from your Chase checking account"

Used car dealer purchase
48 months- 2.13%
60 months- 2.24%
72 months- 3.11%
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