if you have $20k down for a new car
2007-02-26 02:53:28 · 9 answers · asked by Anonymous in Business & Finance ➔ Credit
It is not always better. Most manufactures offer incentive rates that are only available through a dealer on a new car.
If you are buying a used car? Most dealers mark up rates they get from their lenders anywhere from 1 to 3 points. This allows them to make what is called back end reserve. This is how some dealers will advertise a vehicle as what is called a loss leader. This vehicle is priced under the dealers Cost just to get the customers into the dealership. They actually lose money on the front end of the deal and make it up on the back end with their reserve.
The other thing you should think about is if you can get the same rate from a dealer, why would you tie up your borrowing power at your credit union? Save this for something else.
One last thing, with $20,000.00 down unless your credit sucks, you should get a good rate.
2007-02-26 04:22:09 · answer #1 · answered by ? 7 · 0⤊ 0⤋
1
2016-09-26 05:47:34 · answer #2 · answered by Gisela 3 · 0⤊ 0⤋
The interest rate, plus you know you can trust your loan officer at a credit union.The dealer will offer higher rates to accomadate him/herself. They make it sound like you are getting a deal of a lifetime when really the could probabl offer you something better. The higher the rate a dealer gets you, the more kickback the company gets from the financial instituion they are recommending. A credit union has a set rate period, The loan officer at your credit union usually does not make a cent off of your deal. Also, lookout for 0% interest. In some circumstances you come out better if you take the rebate and [ay the interest. You usually lose you rebate if you take 0%. Have them work it both ways and you will see that you don't always win with 0% interest. Remember there are things that are too good to be true.
2007-02-26 16:06:11 · answer #3 · answered by moonlillies 3 · 0⤊ 0⤋
Depends on the car you are buying. Some offer incentives, some don't (often a choice of cash or a low rate). Find out what rates the dealer is able to get for you. It's possible that they can get you a lower rate.
It might be more beneficial to go for a low rate incentive the manufacturer might be offering, which you'll only get through the dealer.
But if they can't get you a lower rate, go to the credit union. That way, you'll be able to use any cash incentives available as well.
Find out your monthly payment with all your options... pick the one that's lowest (but be sure to compare quotes with the same number of payments).
So to summarize, there's two reasons to go to a credit union (or other outside source for that matter) rather than the dealer.
1.) Lower rate.
2.) Allows you to take a cash incentive that might otherwise force you to accept a higher rate.
2007-02-26 03:03:04 · answer #4 · answered by JustAnotherEngineer 3 · 0⤊ 0⤋
You should get a pretty low interest rate, usually a little better at the credit union. Nice to see someone save towards a vehicle. It is a smart move.
2007-02-26 02:56:57 · answer #5 · answered by JAN 7 · 1⤊ 0⤋
The credit union can usually get you better interest rates.
2007-02-26 02:56:01 · answer #6 · answered by Jo 6 · 2⤊ 0⤋
The dealer charges higher interest, plus if they know you have more money avaliable they will try to get it in the form of finding a way to raise the price.
2007-02-26 02:56:29 · answer #7 · answered by Anonymous · 1⤊ 0⤋
neither, why suck interest , save, work second or third job, pay cash you will get a way better price. not paying interest is the way better way to go. why should people make money off your hard work.
2007-02-26 02:57:34 · answer #8 · answered by Anonymous · 1⤊ 0⤋
Have both give you a quote!
2007-02-26 02:56:45 · answer #9 · answered by amazin'g 7 · 1⤊ 0⤋