When to start the finance process?

[Ratiogear]

If you go in without preapproval, plenty of dealers will try to shaft you with 5-6% rates. My younger brother had his first car buying experience and although he had a 750+ credit score, the dealer offered him 5.5%.

If you come in with a 1-2% rate from your credit union, the dealer will be much more likely to give you a good rate. Preapproval of your credit union only takes a few days and can be good from 10-30 days depending on their rules.

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[Tar Heel Wrangler]

Every dealer I've worked with has been extremely honest with their rates, most of them matching or beating the best I could get at a CU or bank with one exception, where I ended up keeping the CU financing. It was easy. CUs and Banks publish their rates right on their website so it's easy to shop whatever the dealer rate is. If you have top-tier credit there's not a lot of guesswork.

Ok, so you trust all the dealers you've worked with. I trust like none of them when it comes to financing.

 

[TXRubicon]

That's not what I said. I said every dealer I've worked with has either met or beat the best rate I could find myself, with one exception and in that instance I used my own CU financing.

Ok, so you trust all the dealers you've worked with. I trust like none of them when it comes to financing.

 

[Tar Heel Wrangler]

That's not what I said. I said every dealer I've worked with has either met or beat the best rate I could find myself, with one exception and in that instance I used my own CU financing.

I get it, but does your best rate include a preapproval with the banks the dealer uses? I used to do it the same way and always wondered how much MORE the dealer could have beaten my bank or CU that they were not telling me. They take that profit every time.

If I would have done it that way last month, I would have left about $1800 on the table because I got a much lower rate (2.24% vs 3.95%) through the preapproval and I knew that number.

Given that may not always be the case as sometimes it's negligible, but I want peace of mind knowing and not wondering. From now I'll do the preapproval to be sure I'm getting the best rate.

 

[TXRubicon]

I'm not sure what you're saying is any different than what I'm saying. I don't need pre-approval letters. I have an 800+ score. Rates are published on lender websites. The dealer can either meet or beat those rates. There's not much more to it than that. I don't need to come in with a bunch of letters showing rates. What's the point? Financing doesn't need to be difficult as long as the buyer is an informed buyer.

As to the dealer marking rates up, my rates on both my cars are sub 2%. I'm not going to split hairs about 1.9% I get vs perhaps the 1.8% it's costing them. If the dealer gave me a solid deal on the vehicle I want, I'm not going to argue about a tenth of a point. I'm not out to eliminate every bit of profit from a sale.

I get it, but does your best rate include a preapproval with the banks the dealer uses? I used to do it the same way and always wondered how much MORE the dealer could have beaten my bank or CU that they were not telling me. They take that profit every time.

If I would have done it that way last month, I would have left about $1800 on the table because I got a much lower rate (2.24% vs 3.95%) through the preapproval and I knew that number.

Given that may not always be the case as sometimes it's negligible, but I want peace of mind knowing and not wondering. From now I'll do the preapproval to be sure I'm getting the best rate.

 

[Tar Heel Wrangler]

I'm not sure what you're saying is any different than what I'm saying. I don't need pre-approval letters. I have an 800+ score. Rates are published on lender websites. The dealer can either meet or beat those rates. There's not much more to it than that. I don't need to come in with a bunch of letters showing rates. What's the point? Financing doesn't need to be difficult as long as the buyer is an informed buyer.

As to the dealer marking rates up, my rates on both my cars are sub 2%. I'm not going to split hairs about 1.9% I get vs perhaps the 1.8% it's costing them. If the dealer gave me a solid deal on the vehicle I want, I'm not going to argue about a tenth of a point. I'm not out to eliminate every bit of profit from a sale.

Yes, we are basically saying the same thing. It's just your situation meets the negligible rate difference. Mine did not. Have excellent credit so I'm not sure why my CU isn't a lot lower. If my rate from my CU was around 2ish, then I wouldn't have needed to have done the preapproval through CapitalOne.

 

[R00STER]

If you are worried that your dealer is not giving you the lowest rate possible, ask them to provide you the "buy rate" from their underwriter. That way you will know if they are adding points. There is a bunch of info out their on this but you can can see a short video on it here:

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