Interest rate on new car?

Question

Today I went to a auto dealer that has the moto of no haggling on price. I have read many good reviews in yahoo and on kelly blue book. So I went to the nearest dealership in my area. I won't mention the car type as it is obvious. My credit is perfect yet when the saleman worked up a monthly payment it seemed teriblily high. I asked him what rate he use and did not say but rambled on to avoid telling me. I then told the guy about all I would pay per month plus my down payment. Which after doing research on the internet felt was about fair. They then try to tell me for the amount I could offer they would put me in a much lesser car. After a few more minutes of listening to then the finance guru I decided to leave. I got home and ran a calculation and they were using a 12 percent finance rate. For someone with excellent credit and needing about 25-30 thosand dollard what do you think is about the going rate now? Also, I feel bad for hard working people that get suckered.

Answer 1

If you figured 12% there are 2 things possibly happening. They are trying to take advantage of you, or your credit is not as excellant as you think. Perfect credit basically is now 725 and up.

Banks are being very picky who they lend to. I have seen turn downs on people that wanted 12k cars that were putting down 6k. It used to be lousy credit (500) we could get you in a car, than about 3 months ago they bumped it to 550. Now if you are below 600, it is a struggle.

Too many foreclosures, and people letting their rides get repoed.

If you do have a 700 + beacon, look online, I would think you would qualify for low rates they offer as specials, but many popular fuel efficient cars low finance rates and rebates are being scaled back or cut out all together. No need to offer if these are the ones selling. You can get 0% on most trucks and suv's with a 700+ beacon though ;)

Good Luck!

Answer 2

Dealerships get back part of the intrest rate from the lender, so they try to stick you with the highest rate possible. There are 3 rates: Bank rate, Dealer rate, and Consumer rate.

The fact that they would not tell you the rate means they are shady lying crooks. Always work the numbers using the purchase price figuers, never with monthly payment figures, as you just learned.

I've found that if I can't deal with them within 20 minutes of walking in the door, then they are not there for honest business.

You can go to many banks and get your own car loan money. In fact, I just went to Capitol One Auto, applied online and got 6%.