Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
...
For my own vehicle, I used Lightstream. Did it all online. They put it in my account and I wrote a check to the dealership. Dealership could not match the rate - I got approved before buying, but did not sign the documents with lightstream until we were in the finance office and they agreed they could not match or beat the rate.
Since Lightstream has a rate guarantee, I usually just accept the loan terms and if they are beat you can either give the funds back or have them match the quoted rate.
Seems the purchase process was backwards. Anytime I've bought a new car, which has only been twice in my lifetime, I've always had financing set up BEFORE I've purchased it. The first time, the dealership's first offer was the same as my banks. I told them my bank could do better even though they couldn't, but the dealership came down another .25% and beat them so instead I financed with the dealership lol. Second time, the dealership couldn't match my credit union and they wouldn't budge so I financed through my credit union.
5.5% is really high. My CU 3.49% for a 60 month loan. If you buy through their car buying service (true car) it's 2.99% for the same length.
No clue what a loyalty bonus is, but I bet that's something any one willing to ask for can get if it means securing a sale.
It sounds as though you agreed to a pretty high interest rate on the car loan. I don't know if that indicates credit problems, but if you can go to your credit union and get a significantly lower rate without paying penalties that's the option I would favor.
There are plenty of dealers who will try to get you to take a worse loan rate and terms than what their own finance company says you're eligible for because they make more money on those higher rate loans, so it's not necessarily a case of the OP's credit being bad.
I'd go the credit union route- should be able to get less than 3% with decent credit- and stay far, far away from that dealer for anything else because they don't sound trustworthy.
No clue what a loyalty bonus is, but I bet that's something any one willing to ask for can get if it means securing a sale.
A " loyalty bonus" is cash back, discount price, or $ off for being loyal to a particular brand of car/truck/suv / minivan.
For instance if you own a chevy, and buy another chevy instead of a Ford, you are being loyal to the chevy brand. So they give you a token (,or major) discount for rebuying the same brand as a loyal customer.
Let me start by saying I usually like to own cars for 10-15 years so I rarely purchase vehicles. When I make a purchase, I do my research and look big picture.
With that said, I traded in my current car (that I had owned for almost 11 years) and after the trade in and heavy negotiating and a small down payment, I walked away with a quality brand new SUV, with all the options, with a balance of 27k.
Now, my first official payment isn't due till mid March so I have a little time to think about how to handle the remaining 'payoff'.....here are my options:
1)I had no choice but to accept the going interest rate at around 5.5% I signed this deal to get the '$1,000 off Loyalty' bonus with the car manufacturer. I knew I would have options when the first payment was due so I am beginning to consider my options. So, option ONE is do nothing else.... I would pay the payment as agreed for the duration of the term at the high going interest rate of 5.5%. Obviously, this option would incur heavy interest payments for the life of the loan
2) Option TWO would involve shopping around to find a lower rate and re-finance the loan-the whole amount. BTW- Does anyone have any suggestions of where to look?
3) Option THREE would involve pulling money from my money market account (earning 2.25%) and pay off the ENTIRE amount and be done with it. I would then focus on "paying myself back" but I would avoid the "5.5% x life of the loan" interest payments. I definitely have the money to do this. It wouldn't leave me with a ton of money in this particular savings account but I would still have a cushion with liquidity in other areas, if needed.
4) Option FOUR would be a hybrid of Option TWO and Option THREE...i.e. perhaps refinance by putting 50% down and then refinance the remaining 50% for a shorter term...say 2-3 years. Or even get aggressive and pay off 2/3 and then pay it all off within a year...I can be creative with this option.
Your opinions are greatly appreciated and let me know if you see another option that perhaps, I missed.
Thanks!
The 2.25% you are earning is probably only about 1.5% - 1.75% after taxes, and I doubt you will find a refinance loan at a rate below that. Pay the car off!
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
