Has anyone secured good dealer financing?

[JeepeRN]

I have a new wrangler on order. I’m trying to decide if I should finance it or pay in cash. Currently, there is a 0% for 36month promo at my dealer. I have good credit and was wondering if anyone has had success getting that interest rate? I see they use a tier system but what formulation is used to determine that? Or should I try and find my own financing? I just don’t want to get dinged for a hard pull if I get a bad rate and want to try dealer financing. Any suggestions?

Sponsored

 

[ECP]

Some dealers will offer a discount if you finance with them. You can calculate out the monthly payment at 36 months and then calculate your debt to income (dti) (under 40%) and if your credit score is over 740, you should be good.

I'll be crossing this bridge in (hopefully) a few weeks when mine arrives.

Also - if you do multiple hard pulls over a period of 2-3 days, it only counts as one. They realize you are shopping. So when you get ready to apply at the dealer, also apply at your local banks, CUs or wherever else you may want to get financing.

 

[GSLSE21B]

I did $0 down , 0% in December 2020

 

[rent]

Just did the $0 down, 0%, 36 month financing thru Chrysler Capital. I was going to pay cash or use my bank's financing ($0 down, 1.74%, 48 month), but it was very kind of my dealer (Gupton's) to mention this to me. I'd take 0% any day.

Like others have mentioned, multiple pulls in a short period of time won't affect your score much. Credit score 740+ is typically needed. If your score is high enough, I don't believe they even check for employment or verify your income.

 

[Orcman84]

If I could pay straight cash instead financing even if it’s 0%, I would. Perhaps the dealer would negotiate more on price if they knew a lot of cash was headed their way.

 

[rent]

If I could pay straight cash instead financing even if it’s 0%, I would. Perhaps the dealer would negotiate more on price if they knew a lot of cash was headed their way.

From the dealer's perspective, they get kickbacks from the bank if they arrange financing, so if all else being equal, they'd want you to finance thru them. It is not unusual you can get a "better" price if you agree to use dealer financing. So in this sense, cash isn't necessarily an incentive for dealer to negotiate on price.

From a cash buyer's perspective, one should invest the cash and finance the vehicle as long as the investment returns are higher than the interest rate for financing. In that sense, at 0%, there is practically no reason not to finance. It is free money. Heck I can make about $400 if just letting the cash sit in a 0.5% APY savings account for 3 years.

 

[wibornz]

What I did when I bought my Jeep. I told them that if they could beat the best finance deal that I could find, that I would use their financing. They did beat it and they beat it from the bank that I was currently using.

 

[Orcman84]

From the dealer's perspective, they get kickbacks from the bank if they arrange financing, so if all else being equal, they'd want you to finance thru them. It is not unusual you can get a "better" price if you agree to use dealer financing. So in this sense, cash isn't necessarily an incentive for dealer to negotiate on price.

From a cash buyer's perspective, one should invest the cash and finance the vehicle as long as the investment returns are higher than the interest rate for financing. In that sense, at 0%, there is practically no reason not to finance. It is free money. Heck I can make about $400 if just letting the cash sit in a 0.5% APY savings account for 3 years.

I’ve been investing cash into a high yield savings account for around four years to use as the down payment on my next vehicle. At this point, I would need to finance something, but another year of saving would get me to buying outright. I had it in my head a dealer would negotiate on price if they saw a lot of cash coming their way.

 

[easter]

theres no way to lock in that type of dealer financing while waiting for an order, correct? am i limited to whatever is available at delivery?

 

[rcadden]

I’ve been investing cash into a high yield savings account for around four years to use as the down payment on my next vehicle. At this point, I would need to finance something, but another year of saving would get me to buying outright. I had it in my head a dealer would negotiate on price if they saw a lot of cash coming their way.

For used vehicles, and especially for smaller dealerships, yes, cash is better.

But for a new vehicle (and often for new-er used vehicles), as mentioned before, the dealer often gets a kickback for financing.

IMO, there's no clear answer between financing or cash, as there are so many variables.

For instance, I financed mine for 72 months at 2.79%, because I wanted the lowest "required" payment, which would then allow me to pay bigger payments to pay it off early, as the excess payments typically go straight to the principal.

I could *easily* get more than a 2.79% return on my money in the general market. HOWEVER, I plan to pay it off in ~2 years because I want to eliminate the "required" payment each month as quickly as possible, because I want to allocate that money elsewhere.

 

[GATORB8]

I believe CCAP uses an industry specific "FICO Auto" score (goes to 900 so it's a different score than standard), I'm sure they'll also use DTI/PTI which will depend on your stated income.

I haven't seen it as much lately, but sometimes the manufacturers offer rebates for using their captive financing. In that case, it may be beneficial to use their financing, and either refinance or pay it off with cash when you get the statement. (note, there is usually a minimum number of payments, 3 seems common, that are required for the dealer to get their kickback).

 

[rent]

For instance, I financed mine for 72 months at 2.79%, because I wanted the lowest "required" payment, which would then allow me to pay bigger payments to pay it off early, as the excess payments typically go straight to the principal.

I could *easily* get more than a 2.79% return on my money in the general market. HOWEVER, I plan to pay it off in ~2 years because I want to eliminate the "required" payment each month as quickly as possible, because I want to allocate that money elsewhere.

I'm curious, wouldn't you be able to get an even lower rate for a shorter term loan, say 48 months? Typically shorter terms have lower rates. Since you plan to pay it off in 2 years by over paying anyway, the monthly payment amount of a shorter term doesn't really matter. A lower rate = less interest charge.

 

[AlgUSF]

If I could pay straight cash instead financing even if it’s 0%, I would. Perhaps the dealer would negotiate more on price if they knew a lot of cash was headed their way.

Like others have said the dealerships get kickbacks on financing and often give a discount for financing. My dealer would do my deal if I financed and didn't pay it off for 4 months. Keep in mind, my Jeep is a cheap(er) Jeep.

Sponsored