Why People Fail To Get Good Deals
Everyone obviously wants to get the best possible loan rate. Yet, many people
fail to do so.
But why don’t they?
Because they failed to separate car shopping from loan shopping.
They started out shopping for a car and left their financing for the dealer to
handle.
According to NADA (National Association of Automobile Dealers), two out of three
people (67%) arranged financing through the dealer.
And, they got snookered by the car dealer.
That’s Right! Arranging financing through a car dealer adds an average of $1500
in extra interest and fees to your $20k car loan.
It’s gotten so bad that GM issued a directive in February 2004 limiting their
dealers to adding no more than 3% to your car loan rate.
Do the math: 3% extra on a 48-month $20,000 loan is $1,248. On a 60-month loan
for the same amount, it’s $1,562.
And that doesn’t even include the “fees” they add in at closing for arranging
such a sweet deal for you!
Never ever arrange your financing through a car dealer.
IMPORTANT: Your secret loan strategy
Follow these three simple steps:
1. Apply online at E-Loan and
Capital One
2. Apply online at one or two additional lenders
3. Ask your bank or credit union to beat your best online rate.
These quotes make it easy to get the possible rate quote from your bank or
credit union.
Simply show your banking contact your loan commitment paperwork. With most of
the loan sites you can print it out online. Or, it arrives the next day with
your check.
Ask your local lender to beat your best online rate if they want your business.
If they can beat it, that’s great! If they can’t, then you know that you’ve
gotten your best possible loan.
Remember, just a small fraction of a percentage point on a big car loan is worth
$50-$100, so a little extra time loan shopping is well worth it.
Getting your loan online will save you at least 2% - 3% (plus fee savings) compared to what a dealer would charge to
“arrange” your financing for you!
Previous: Auto Loans
Next: Bad Credit Car Loans