Stupid car loan/car buying question

[Anonymous]

I am looking to buy my first car in almost 20 years. I was a kid last time I got the car (well 17) so I don't remember anything. If I am getting a loan through the credit union how does that work? Do I find the car at the dealership, have them hold it, and then get a loan? Do I get pre approved and then go looking for cars?

[Anonymous]

Best to get a pre-approval letter from your credit union and take it with you when going car shopping. You can use that as a negotiating tool. If the dealer really wants your business, they'll try to beat what the credit union is offering. Worked like a charm for us.

[Anonymous]

Usually the dealership provides the financing.

[Anonymous]

Oops -- not that the dealer finances themselves, but they work with an organization that does, on your behalf.

[Anonymous]

But you can often get a lower rate than the dealership through a credit union. At the very least, go on the credit union's website and look at their rates for car loans. I have had the best luck negotiating my car price without discussing monthly payments. I paid cash for my last new car but when I was younger, I first sought out the overall price I was looking for and dealt with the loan myself. In other words, you usually have a few days to do the loan paperwork after securing a price at the dealership. Good luck. Edmunds.com is great in terms of knowing a fair price for the car you want in your area.

[Anonymous]

The last time I bought a car, I dealt with the financing prior to going to the dealership and showed up with a check from my bank (Navy Federal).

[Anonymous]

Anonymous wrote:The last time I bought a car, I dealt with the financing prior to going to the dealership and showed up with a check from my bank (Navy Federal).

But how did you know how much you needed? Like I can see cars online and then go to my bank, but no idea if the car will still be there. Did you put a hold on the car you wanted?

[Anonymous]

Anonymous wrote:But you can often get a lower rate than the dealership through a credit union. At the very least, go on the credit union's website and look at their rates for car loans. I have had the best luck negotiating my car price without discussing monthly payments. I paid cash for my last new car but when I was younger, I first sought out the overall price I was looking for and dealt with the loan myself. In other words, you usually have a few days to do the loan paperwork after securing a price at the dealership. Good luck. Edmunds.com is great in terms of knowing a fair price for the car you want in your area.

Thanks! The credit union rates are pretty low, 2.35% plus like .25% off for joining the credit union. That is for used, I think from my research used loans are better with CU and new better with dealer, since they offer zero percent financing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:But you can often get a lower rate than the dealership through a credit union. At the very least, go on the credit union's website and look at their rates for car loans. I have had the best luck negotiating my car price without discussing monthly payments. I paid cash for my last new car but when I was younger, I first sought out the overall price I was looking for and dealt with the loan myself. In other words, you usually have a few days to do the loan paperwork after securing a price at the dealership. Good luck. Edmunds.com is great in terms of knowing a fair price for the car you want in your area.

Thanks! The credit union rates are pretty low, 2.35% plus like .25% off for joining the credit union. That is for used, I think from my research used loans are better with CU and new better with dealer, since they offer zero percent financing.

You're welcome. Just know the numbers going in. Just make sure the zero percent financing does not end. Credit union rates are terrific. It got me into my first post-college car. I don't need them anymore but it's nice to know they are there. My mortgage company even matched my credit union's mortgage rates several years ago when refinancing. At least this way the dealership knows you have options and are not wedded to their financing. Good luck.

[Anonymous]

I would buy what I can afford in cash.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The last time I bought a car, I dealt with the financing prior to going to the dealership and showed up with a check from my bank (Navy Federal).

But how did you know how much you needed? Like I can see cars online and then go to my bank, but no idea if the car will still be there. Did you put a hold on the car you wanted?

You don't need to know the exact amount of the car you will purchase. You will get a pre-approval letter from the credit union. "Larla is approved for up to 50,000 for a rate of 0% interest." You take that to the dealership. The credit union will cut your check for exactly the amount you need--$50,000 or less.

[Anonymous]

Anonymous wrote:I would buy what I can afford in cash.

IOP here: This is just obnoxious. I am glad that is possible for you. Not all of us have cash flow like that and your response has nothing to do with my question.

[Anonymous]

Anonymous wrote:I would buy what I can afford in cash.

+1

[Anonymous]

If you have good credit, the process is super fast and easy. You just need a ballpark loan amount. As others point out, a credit union is usually the lowest rate unless the manufacturer has a 0% deal. Just give them a call and they'll walk you through it, but it is usually as easy as signing up for a credit card. You just tell the dealership the lender and they'll do the rest of the paperwork.

A lot of credit unions also offer car buying services where they get a "kickback" from the sale that they use to offer an even lower rate. It may not be the absolute bottom price but they are generally pretty good and you avoid the negotiation/sales hassles.

[Anonymous]

Anonymous wrote:I would buy what I can afford in cash.

did you pay cash for your house too?