car loan question.....?

Question

it's time for my husband and i to buy a new car.
i've never bought a car before (i was very lucky to get parent's old cars). he bought a car before we got married and it was financed at the dealer.

we intend to get a loan through our credit union. i was wondering what the process is. our bank has really horrible hours, so they are hard to contact.....
do we get approved for a certain amount and then pick out the car and then go back to the bank to get a check??

do we pick out the car and then try to get approved at the bank for that amount??

what exactly is the process when you are going through a bank and not the dealership's financial institutions??

is it considered "cash" at the dealership when you get your loan from your own bank?? like can i go there and say "we intend to pay cash." this way we can try to use that to get a lower price....

thanks!

Answer 1

Usually, the credit union won't cut you a check until they see the invoice. What they'll give you to take to the dealership is a letter verifying that you have been pre-approved for a loan. You'll pick out the car and tell the credit union how much money you need and how long you want to take to pay for it. Be aware that if you finance 100% of the car, you'll have to pay a higher interest rate than if you put 20% down and financed 80%. This is because the credit union has to take on more risk by covering more of the car's cost.

But don't tell that to the dealership up front. A dealer has lots of ways to make money from you. He can make money on the car, or the financing, or on accessories like an alarm system, or on the warranty. If he already knows that he won't make money from you by financing the car, then he'll try to increase his profit on the other items. Nail down the price of the car first, then move on to financing.

And don't let him tempt you by offering financing with lower payments. What they'll do is stretch out the loan period with higher interest so that they'll make more money by having you pay more in the long run. The saleman's job is to make the most possible profit for the dealership. They do this by confusing you with all the different aspects of the sale. If you force them to nail down each part of the sale one item at a time (price, financing, warranty), you take away one of their big tools to make more money off of you. Good luck.

P.S. If you want help on getting the lowest price on the car you want, click on my name and drop me a line to ask how I got an Accord V-6 EX sedan last month for $801 below dealer invoice ($3,533 below MSRP) and a Civic EX sedan for dealer invoice ($1,638 below MSRP).

Answer 2

Great idea! Credit Unions offer very competitive rates, and it is considered cash at a dealer, although that won't get you a lower price anymore as dealers almost always make money on financing. Fing the car you want to buy, negotiate the price, and write an order, the dealer gives you the yellow copy of the order, and you in turn either bring it to, or fax it to the CU. It's that easy.

Answer 3

If you are buying a new car, you might get a better deal through the car company. Check that out.

The CU should be able to give you an idea of what amount they are willing to loan to you and that will help you decide what price range to look for. You will need to also know the loan value of the car you pick, if it is a used car. CU can advise you.

Answer 4

Well, my experience with a Credit Union is to first find a car that you like and think is in your price range. Go to your CU and tell them the amount you wish to borrow, and let them know what you want the monthly payments to be, also let them know the length of the loan (3 years, 5 years). They will go through the approval process and let you know what your APR will be (this is dependant on if it is a new car or used car). I hope this helps you some!