[CA] Where can I get the best financing outside of the dealership?

[Phenomenon]

I want to have an external financing offer prepared before I walk into a dealership sometime this spring, so I will have some leverage. The JLUR would be my first time financing a car, so my knowledge on the topic is not as good as I'd like it to be. My goal is to get the lowest monthly payment possible (financially unwise, I know - but may be the only way I can fit it into my budget at the moment).

I live in San Jose, CA - where should I go to get started with this? I bank with Chase and have a Costco membership.

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[The_Phew]

I want to have an external financing offer prepared before I walk into a dealership sometime this spring, so I will have some leverage. The JLUR would be my first time financing a car, so my knowledge on the topic is not as good as I'd like it to be. My goal is to get the lowest monthly payment possible (financially unwise, I know - but may be the only way I can fit it into my budget at the moment).

I live in San Jose, CA - where should I go to get started with this? I bank with Chase and have a Costco membership.

I've usually found PenFed to have the lowest auto loan rates (anyone can join PenFed with a $25 donation to a vet charity, if I recall), but I've heard of people getting even better rates with a local credit union.

 

[Phenomenon]

I've usually found PenFed to have the lowest auto loan rates (anyone can join PenFed with a $25 donation to a vet charity, if I recall), but I've heard of people getting even better rates with a local credit union.

Thanks! I checked Pen Fed and a local credit union, seems like the latter has the lowest rates like you said.

 

[simpleJL]

Langley is the best I could find.

Not local.

Here's their website. Lowest rates in existence thus far. You will need to add 0.5% to their APR numbers though - as you won't qualify for that without having a credit card with them already.

2.24% for 60-months is still fairly good though! Beats PenFed by 0.76% for a 60-month loan.

https://www.langleyfcu.org/auto-loans-vehicle

 

[CantThinkOfAHandle]

For a loan of this size and duration, the differences to the right of the decimal point might not amount to much for your monthly payments.

This could be useful to compare rates:

https://www.bankrate.com/calculators/home-equity/compare-loans-calculator.aspx

 

[simpleJL]

For a loan of this size and duration, the differences to the right of the decimal point might not amount to much for your monthly payments.

This could be useful to compare rates:

https://www.bankrate.com/calculators/home-equity/compare-loans-calculator.aspx

Monthly payments will have minimal difference.

The life of the loan will. Financing $50k will add up to a bit of interest over a 5-year loan.

 

[simpleJL]

For example. $50k loan, 60 months. Take a look at the full loan amount after interest.

That 0.76% difference is literally another $1,000 added on to the life of the loan.

 

[James888]

At this point, I almost think you're messing with us. 17%!?!? NYS sales tax averages 8.5% statewide, a bit higher here on the Island, a bit lower upstate, depending on the county (4% state tax, counties vary, 4-5%). Your max tax rate should be below 9%. Dealer fees CANNOT be listed as taxes, though they can be taxed. You pay the tax rate of the state/county you register the vehicle in, not where you purchase it. If they really charged you 17%, I would contact an attorney. The problem is, you already signed the papers and left with the car. That will complicate things. Please post the dealer's name and your POC here so we can help further.

I am at Suffolk County Long Island. Is it possible the dealer made a mistake ?

 

[simpleJL]

I am at Suffolk County Long Island. Is it possible the dealer made a mistake ?

You quoted and responded to a post that isn't even on this thread. I haven't a clue how you managed that. Impressive.

 

[misanthrope]

You quoted and responded to a post that isn't even on this thread. I haven't a clue how you managed that. Impressive.

I think I was editing it when he posted. Ninja skills.

 

[misanthrope]

You quoted and responded to a post that isn't even on this thread. I haven't a clue how you managed that. Impressive.

SimpleJL, you're right! My post was on an entirely different thread about interest/financing. Weird...

 

[misanthrope]

I want to have an external financing offer prepared before I walk into a dealership sometime this spring, so I will have some leverage. The JLUR would be my first time financing a car, so my knowledge on the topic is not as good as I'd like it to be. My goal is to get the lowest monthly payment possible (financially unwise, I know - but may be the only way I can fit it into my budget at the moment).

I live in San Jose, CA - where should I go to get started with this? I bank with Chase and have a Costco membership.

Like others have commented:

The best way to get a low monthly payment is to stretch the loan to 60, 72 or 84 months (yes, many banks and credit unions are going to 7 years on financing now), but the interest rate will be higher. So the loan will cost you more money in the long run, even if the monthly payments are affordable. At 2%, an extra year on a $40,000 loan will only cost about $400 more (from 60 mos to 72 mos), and only another $420 more to go to 84 mos, so that really is quite reasonable when it brings your payment from $700 to $590 (which is exactly what I did for my wife's Pilot), or even $511 at 84 mos. So for $40k, the payment goes from $700 to $511 for 2 more years at an added cost of only $820. 7 years is a long time, but this is the JL. You'll have it paid off just in time for the JM...
Obviously, at higher rates the cost will be higher, but this still might make it worth your while. Figure out the most you can afford per month, and punch it in to any of a number of online calculators to find out how much you can reasonably borrow and over how long a term. It takes a little experimenting, but you'll find a sweet spot.
The biggest variable is that interest rate over term: a shorter loan may save you enough in interest that it's worthwhile to make a higher payment. At a 2-2.5% rate, you'll lose very little going longer. Above that, it will cost a lot more.

 

[Phenomenon]

Like others have commented:

The best way to get a low monthly payment is to stretch the loan to 60, 72 or 84 months (yes, many banks and credit unions are going to 7 years on financing now), but the interest rate will be higher. So the loan will cost you more money in the long run, even if the monthly payments are affordable. At 2%, an extra year on a $40,000 loan will only cost about $400 more (from 60 mos to 72 mos), and only another $420 more to go to 84 mos, so that really is quite reasonable when it brings your payment from $700 to $590 (which is exactly what I did for my wife's Pilot), or even $511 at 84 mos. So for $40k, the payment goes from $700 to $511 for 2 more years at an added cost of only $820. 7 years is a long time, but this is the JL. You'll have it paid off just in time for the JM...
Obviously, at higher rates the cost will be higher, but this still might make it worth your while. Figure out the most you can afford per month, and punch it in to any of a number of online calculators to find out how much you can reasonably borrow and over how long a term. It takes a little experimenting, but you'll find a sweet spot.
The biggest variable is that interest rate over term: a shorter loan may save you enough in interest that it's worthwhile to make a higher payment. At a 2-2.5% rate, you'll lose very little going longer. Above that, it will cost a lot more.

Thanks for the incredibly thorough explanation!

 

[misanthrope]

Thanks for the incredibly thorough explanation!

NP. I just wish somebody told me all of this on my first new car purchase.

 

[simpleJL]

Like others have commented:

The best way to get a low monthly payment is to stretch the loan to 60, 72 or 84 months (yes, many banks and credit unions are going to 7 years on financing now), but the interest rate will be higher. So the loan will cost you more money in the long run, even if the monthly payments are affordable. At 2%, an extra year on a $40,000 loan will only cost about $400 more (from 60 mos to 72 mos), and only another $420 more to go to 84 mos, so that really is quite reasonable when it brings your payment from $700 to $590 (which is exactly what I did for my wife's Pilot), or even $511 at 84 mos. So for $40k, the payment goes from $700 to $511 for 2 more years at an added cost of only $820. 7 years is a long time, but this is the JL. You'll have it paid off just in time for the JM...
Obviously, at higher rates the cost will be higher, but this still might make it worth your while. Figure out the most you can afford per month, and punch it in to any of a number of online calculators to find out how much you can reasonably borrow and over how long a term. It takes a little experimenting, but you'll find a sweet spot.
The biggest variable is that interest rate over term: a shorter loan may save you enough in interest that it's worthwhile to make a higher payment. At a 2-2.5% rate, you'll lose very little going longer. Above that, it will cost a lot more.

Let me refer you to this post: https://www.jlwranglerforums.com/fo...ng-outside-of-the-dealership.3001/#post-50533

A little bit of interest percentage can make a drastic differece with a $45k+ vehicle.

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