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What is the better route to finance a new car?
I want to buy a used car. Is it better to try to secure financing from a bank before going to any dealerships? Or, are the dealerships more willing to haggle if I finance thru them?
Public Comments
- It depends. Sometimes, dealerships offer special financing like 0%, 1.9%, etc. You can always check with your bank or a credit union on what interest rate they offer for 48, 60, or 72 months loan. Right now I believe the rate is between 5.5 and 6.5% but you need to double check that.
- For a used car, it is typically better to secure financing before stepping foot into a dealership. I would suggest a credit union.
If you are considering new, there may be financing incentives on specific makes and models.
I suggest securing financing before going to a dealership.
Even if you buy a car without financing incentives, you can tell the finance guy "My APR is X % for Y months" and if you can beat it, I will sign with your lender". Just make sure you read everything.
Sometimes they will make it appear as if they are lowering your monthly payment and interest rate when they are actually just extending the term of your loan.
