clawhammer

2.99% up to 60 months at Penfed

mingster

exactly what i was going to post. PenFed rocks!

mxt_77

While it's good to know what dealers may be offering people so that you can use this as a jumping-off point, I would not walk into a dealership expecting them to find/provide financing for you. Shop bank rates and get pre-approved, that way you'll know the "worst case scenario" for what you'll have to pay. Then, once you've agreed on the purchase price of the car, tell the dealer what APR you've been pre-approved for. If he can beat it, great. If not, no worries. At least he won't have financing as a tool in his pocket that he can use as leverage over you.

And always remember to negotiate the price first and separately, and ensure that number doesn't change when you're negotiating financing. And ensure that the number doesn't change if/when the trade-in comes into play. And most importantly, Don't negotiate based on monthly payments!

dombey

Ha, actually talking payments is my favorite way to negotiate cars. As long as you do your homework, it's easy.
I usually set bookends before I get to the dealer; ie I take invoice minus any incentives,plus TTL at no interest and see what the payment would be. That's my target.
Then, I take the highest acceptable interest rate (if pen fed is 3%, then I'd use that)... And plug in the max price I'm willing to pay... Then calculate the payment. That's the most I'm willingto pay.
You can negotiate payment just as effectively as doing it separately; you just have to know what payment is a good deal, just like you have to know what a good rate or price is.

mxt_77

^ That might be OK if you actually calculate all of the variables before you walk into the dealership, but I think most people would pay too much if they end up doing that. The dealer would start throwing in new variables:
Well, what if we extend/shorten the term? It might raise/lower your payment, but then it will also cost you more/less money in the end.
Or, "If you're willing to pay $450/month, why not $455/month?" It's likely easier for a dealer to talk you into $5/month than it is for them to talk you into an extra $300+ on the purchase price... but they turn out to be the same thing.

IMO, you're better off knowing exactly what you're paying for the car and exactly what interest rate you're paying. Then, instead of knowing that you're within some acceptable 'range', you know exactly what you're paying. That makes it easier to check the numbers when it comes time to sign the paperwork.

In today's age of smartphones w/ fun & useful apps, it should be easy to take a payment calculator with you. If you negotiate price X @ APR Y for Z months, then you can plug those numbers into the calculator and figure out exactly what your payment will be.

Edit:
Another problem with negotiating payments is that the dealer will usually calculate these theoretical payments based on some 'optimal' interest rate. Then, once he knows he has you hooked on buying the car, he'll say: "Oh, sorry, you didn't qualify for that interest rate, so your payments are going to be $20/month more than we discussed." No paperwork has been signed, but he has you (or most people) hooked on buying the car, even though the terms have changed.

dombey

^lol I guess this is why you want great credit...so you can laugh at the dealer and say you're going next door where they aren't going to F you on the interest rate.

NuncoStr8

Your friend is probably better off opening an account at a local credit union, starting direct deposit, and waiting 6 months before trying to finance a new car through the CU. In the mean time they can do the research you've been doing and be a lot more savvy buyer and a better credit risk to boot.

A lot of credit unions have membership requirements limiting who can be a member so it's not a slam dunk. You might have to try a few.

And your friend probably isn't going to get 7% on a new car if they don't know what current rates are or what is reasonable. I'm guessing they dn't have much credit history or a sizeable down payment so the deck is stacked against them. Better to pay a couple percent higher rate on an off-lease used car for three years before trying to get the best possible deal in the universe on a brand new model. As has been said, it's too easy to pay too much simply because you have little experience.

nala

Anyone can join PenFed, even non-military members. All you have to do is make a $20 contribution to an organization that supports military families - it's all spelled out on its website penfed.org.

I just did it a couple of weeks ago to secure the 2.99%/60 month rate.