nismoZtuner wrote:Well people have told me to go thru the dealership since they can get me good banks with low apr- when my brother bought his car the dealership used well Fargo for his loan. My brother doesn't have much credit history or cards compared to me and he's paying 9% apr..
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.
Just using some numbers you've used: a 5 year loan at 3% will incur roughly $1560 in interest charges. A 5 year loan at 2% will be 1030 in interest. At 5%, it'll be 2650.
One of the ways dealerships make money is by pushing up the rate on a loan. The lender says "yeah, 2.5% for him is what we'll do", they come tell you "sorry, 4% is the best we can do, but that's still a great rate", and pocket the $800 in extra interest. If you know that your bank is willing to lend to you at 2.75%, they may well give you the 2.5%.
Don't ever walk into car dealership to buy a car without planning to pay cash, know you can get the top tier financing, or having financing arranged elsewhere. You don't have to use the financing you've arranged, but it's a very useful bargaining chip.
 their payment scheme is more complex than that, and often includes the risk you default, when they dont' get the extra money. But it's still a rip off, and there are no disclosure requirements, so you don't know that's what they're doing.