Need some quick loan advice.

[The Last Cowboy]

Oh man, I got a lot more responses than I thought! lol really appreciate everyone's input.

ok, one more.
so JL is 55k, and ill be giving 30k down. Should I borrow 25k from the credit union and write a separate (personal) check of 30k to the dealer? makes sense to me if I do it that way.

Borrow the full amount, then make your first payment to the credit union $30k. Then you can skip months at a time if need be, or pay it off faster than the minimum payment. It give you a whole lot of leeway and take that cash money away from the dealer, preventing them from some kind of padding on the backside of what the actual financed number will be. They salivate at cash, don't offer it to them.

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[Deleted member 59498]

They would have to beat my credit union by a huge amount probably a full point. I already direct deposit there, they are easy to work with and have been with them forever. I don't want to deal with Chrysler Capital or some CU I never worked with.

 

[Jeepn’]

Borrow the full amount, then make your first payment to the credit union $30k. Then you can skip months at a time if need be, or pay it off faster than the minimum payment. It give you a whole lot of leeway and take that cash money away from the dealer, preventing them from some kind of padding on the backside of what the actual financed number will be. They salivate at cash, don't offer it to them.

Ah... shit, that's a pretty smart idea. I might do this.
Is there a chance that I give 30k and it doesnt work? as in, I give 30k today and next month I still owe $1000. I really like this idea, because the more I keep paying the more time I can skip if I ever have some sort of financial emergency. Obviously not the goal but life is nicer with backup plans..

At this point I'm going with a CU, if there's one thing I've learned from this thread is that dealers have too many loopholes to screw me in the finance and I wouldn't even know it happened. I am also afraid of handing 30K to a dealership.. they always find a way to take what they can.

 

[JSFoster75]

Borrow the full amount, then make your first payment to the credit union $30k. Then you can skip months at a time if need be, or pay it off faster than the minimum payment. It give you a whole lot of leeway and take that cash money away from the dealer, preventing them from some kind of padding on the backside of what the actual financed number will be. They salivate at cash, don't offer it to them.

Dealers hate cash payments, they make $0 in profit from cash.. The "Cash deal" days are long gone... They want you to finance for the kickbacks they get...

 

[The Last Cowboy]

Yes, they do hate a full payent in cash, and you're excatly right, they make money on the loan. But the OP is talking about financing another $25k. They love, love big down payments. That's money they get right away.

If you want to make a cash downpayment at the dealer (I never recommened that), make double sure that you have all of the numbers in front of you and that you check them first before going in to the F&I office. Also, get a loan calculator app for your phone so that you can check those numbers, before and during negaotiations in the F&I office. Don't be affraid to question and check them. They need you to buy a car that, in most cases, you don't need. If you didn't walk in, you don't need a new car that day.

Another thing I have done in the past, is take the financng at the dealer if it has a rebate that requires you to do so. I don't care what the % rate is, because I will just go refinance it with my credit union, at a much lower rate, after I make the first payment. If the dealer really worked with me, and we were all straight with each other, I'd give them their 90 days, so they get their money on writing the deal.

 

[Jeepn’]

Yes, they do hate a full payent in cash, and you're excatly right, they make money on the loan. But the OP is talking about financing another $25k. They love, love big down payments. That's money they get right away.

If you want to make a cash downpayment at the dealer (I never recommened that), make double sure that you have all of the numbers in front of you and that you check them first before going in to the F&I office. Also, get a loan calculator app for your phone so that you can check those numbers, before and during negaotiations in the F&I office. Don't be affraid to question and check them. They need you to buy a car that, in most cases, you don't need. If you didn't walk in, you don't need a new car that day.

Another thing I have done in the past, is take the financng at the dealer if it has a rebate that requires you to do so. I don't care what the % rate is, because I will just go refinance it with my credit union, at a much lower rate, after I make the first payment. If the dealer really worked with me, and we were all straight with each other, I'd give them their 90 days, so they get their money on writing the deal.

There's currently a $1k rebate, I wonder if they'll give me a hard time for using a credit union. Either way, I like the idea of financing the entire amount and paying it directly through the loan later.

 

[The Last Cowboy]

There's currently a $1k rebate, I wonder if they'll give me a hard time for using a credit union.

If the rebate requires you to take FCA financing, then do that. Go refinance at the credit union after you buy it.

 

[Jeepn’]

If the rebate requires you to take FCA financing, then do that. Go refinance at the credit union after you buy it.

Seems like I might have to. Sooo current plan is to finance the entire amount with the dealer, refinance that whole amount within a month or two at my CU.. and give 30k as a first payment.

Lots of juggling here.

 

[gsbrockman]

Seems like I might have to. Sooo current plan is to finance the entire amount with the dealer, refinance that whole amount within a month or two at my CU.. and give 30k as a first payment.

Lots of juggling here.

Rebates tied to in-house financing may have some stipulations, so be alert for any.

 

[Jeepn’]

Rebates tied to in-house financing may have some stipulations, so be alert for any.

Ahhhhh… of course. Man, it’s almost impossible not to get shafted lol.

 

[Some Random Guy]

Ah... shit, that's a pretty smart idea. I might do this.
Is there a chance that I give 30k and it doesnt work? as in, I give 30k today and next month I still owe $1000. I really like this idea, because the more I keep paying the more time I can skip if I ever have some sort of financial emergency. Obviously not the goal but life is nicer with backup plans..

At this point I'm going with a CU, if there's one thing I've learned from this thread is that dealers have too many loopholes to screw me in the finance and I wouldn't even know it happened. I am also afraid of handing 30K to a dealership.. they always find a way to take what they can.

Para 2 is down to the terms of the loan, and even then it can change. I had loans in my early 20's that started out this way, then switched terms part way through so a minimum amount was due monthly even if you overpaid the month prior. Not sure the legality of that (see the part where I was in my 20's), but it happened. I loved it originally for similar reasons that you brought up. I was working an hourly job at the time, not salary. Income was fluid and non-consistent. Just ask, then politely ask where you can find that in writing in your terms.

As for para 3, I'd caution you on something as more of a general life philosophy. If you worry someone else is getting the better end of a deal , you'll grow bitter in your older age. If it's a better deal, don't cut off your nose to spite your face. Accept it and be polite. Yes, dealers can play all sorts of games. I'd call that capitalism, finding the best "product" to offer in the form of financing and letting the market set the price while they pocket the difference. But if you fret over how they're making money you might reject a good opportunity. If it was the best deal at the time, take it. Feel free to to research and find a better deal by playing their game, but don't lose sleep over their finance department's profits on your deal. Sorry if I read the post wrong, I'm just not a believer in the "zero sum" point of view where the success at others allegedly comes at our expense. We can all get something good.

 

[Whaler27]

Seems like I might have to. Sooo current plan is to finance the entire amount with the dealer, refinance that whole amount within a month or two at my CU.. and give 30k as a first payment.

Lots of juggling here.

First, making a first payment of $30,000 doesn’t automatically entitle you to skip payments. You have to ask your credit union if they will tolerate this, otherwise they are likely to apply your overpayment to reduce the principal, and still expect all subsequent monthly payments to be on time per the contract.

Next, dealers don‘t want big down payments. They get funded on a financed purchase almost instantly, and their profit from making the loan is dependent on the amount financed. Unless the compensation structure has changed, the dealer’s finance fee can be reversed or diminished if the loan is cleared by the purchaser paying it off or refinancing within a defined period of time.

Small swings in interest rates on a home mortgage can make a big difference over time, but small differences in interest on short term loans for comparatively small amounts of money make very little difference. I’d play with your proposed loan numbers using one of the many free calculators on the internet. You may discover that all the tricky gymnastics you’re considering aren’t worth the hassle, and just finance through a credit union you trust.

 

[Jeepn’]

Para 2 is down to the terms of the loan, and even then it can change. I had loans in my early 20's that started out this way, then switched terms part way through so a minimum amount was due monthly even if you overpaid the month prior. Not sure the legality of that (see the part where I was in my 20's), but it happened. I loved it originally for similar reasons that you brought up. I was working an hourly job at the time, not salary. Income was fluid and non-consistent. Just ask, then politely ask where you can find that in writing in your terms.

As for para 3, I'd caution you on something as more of a general life philosophy. If you worry someone else is getting the better end of a deal , you'll grow bitter in your older age. If it's a better deal, don't cut off your nose to spite your face. Accept it and be polite. Yes, dealers can play all sorts of games. I'd call that capitalism, finding the best "product" to offer in the form of financing and letting the market set the price while they pocket the difference. But if you fret over how they're making money you might reject a good opportunity. If it was the best deal at the time, take it. Feel free to to research and find a better deal by playing their game, but don't lose sleep over their finance department's profits on your deal. Sorry if I read the post wrong, I'm just not a believer in the "zero sum" point of view where the success at others allegedly comes at our expense. We can all get something good.

First, making a first payment of $30,000 doesn’t automatically entitle to skip payments. You have to ask your credit union if they will tolerate this, otherwise they are likely to apply the net overpayment to reduce the principal of the loan, and still expect all subsequent payments to be on time per the contract.

Next, dealers don‘t want big down payments. They get the money on a financed purchase almost instantly, and their profit on the loan is dependent on the amount financed. Unless the compensation structure has changed, the dealer’s finance fee can be reversed or diminished if the loan is cleared by the purchaser paying it off or refinancing within a defined period of time.

Small swings in interest rates on a home mortgage can make a huge difference over time, but small differences in interest on short term contracts for comparatively small amounts of money make very little difference. I’d play with your proposed loan numbers using one of the many free calculators on the internet. You make discover all the tricky gymnastics aren’t worth the hassle, and just finance through a credit union you trust.

Thank you. I appreciate both your advice. I actually contacted my dealer, they’ve been great throughout the ordering process and although it’s his job to sell, the man has been great to deal with. He said he would try to match or beat my CU rate.

 

[cornercanyon]

Before meeting with the finance folks I make a spreadsheet on my iPad with two tabs: 1— dealer finance; 2— credit union.

The credit union tab I have all filled in before sitting down with dealer's finance folks: down payment, loan amount and length, interest rate; calculated monthly payment, total interest and total paid.

The dealer tab is all set to add in those items, as well as additional rebates, gap, 'choke and croak', and such.

While in the dealer's finance folks office I fill in their suggestions and compare their monthly payments and total to be paid. If the finance person is smart enough, and most are, they can match the total cost and payments and still make good money. It usually takes a few back and forths.

IF the deal includes gap and/or 'choke and croak' I THEN follow the principal amount on the loan as I make each month's payment and CANCEL both once the principal amount due approaches the resale value.

This last step can actually reduce the dealer financing package to less than the credit union cost IF done timely—

 

[JSFoster75]

If you have an iPhone, look up the app "Auto Loan +", it's a great little tool to figure out a loan payment and you can see how much you save on interest, etc. by paying extra each month, bi-weekly payments, etc.

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