Financing Questions for a First Time buyer.

[ItalianCheeseBread]

Hello everyone,

I did read up on some of the financing post and it looks like cert honda dealers are doing low apr for even people with low credit? My question mainly is if I want to go ahead and buy my first dealership car (up to this point I've only been private buyer) Would it be better to go through my bank to finance or just try and finance through a dealership? I'm asking this because one of the 2016 Civic EX-T's that I'm looking at is 15k~ range which is by far a bargin at least what I can see. The caveat being the dealership does not do financing themselves. So If I want something with the same features and colour ect, I would be paying roughly 17-18k~ with option to finance from the dealer.

My main bank is BOA and to my knowledge only finance through Authorized Dealers, the one I'm looking at not counted so I would have to choose someone else. Which financers have you had luck with?

Sorry if my question sounds a bit noobie, I just moved to texas/dallas from California so I'm kind of feeling dumb for not knowing anything, but this would be my replacement car since my other car broke down on the trip over and will be relegated to project car now, and I want something I can just pass along to my girlfriend of a friend in need a few years out kinda thing.

Car model I'm looking for : 2016+ Civic Ex-T in Black I would prefer non-leather as I have cats who are prone to tearing leather vs cloth (Tan interior prefered but black is ok) < Just incase you need to know what my search criteria has been.

If you need more info or have any questions on something I need to elaborate, just let me know.

Sponsored

 

[Conor]

It's always better to go into a dealer with financing already lined up. Reason being - dealerships make money off of financing, and they make more money by giving you a higher rate. Thus, they don't have your best interests at heart (many reasons they get called "stealerships"). If you go in already having financing lined up, they will then try to beat that rate (as they would prefer to make some money off of financing instead of none).

You can go through your bank, try another bank/credit union, or one of many online options (like Capital One Auto Financing). Go ahead and apply with a bunch and see who gives you the best rate, then take it to the dealership. Multiple credit inquiries within 1 week will only count as one inquiry overall, so there is no additional hit to your credit to apply with multiple sources.

When I bought my Si in December I walked in pre-approved from Capital one at about 3.5%. The dealership got me Honda Credit at 2.9%. Would they have offered me 2.9% if I walked in with no pre-approval? Doubtful.

 

[NixChixFix]

It's always better to shop rates around first before you go to the dealership. If your job has a credit union affiliation, they tend to give you a good rate.

I got lucky -- My credit score isn't bad, but it also isn't good. A friend of my brother's just hooked it up and got me 0.9% through Honda, which he said was pretty easy as Honda (at the time, late May) was clamoring for sales. It helps to go to a smaller, possibly struggling, dealer and take advantage of the pandemic's economic impact.

 

[bluehatch17]

Even for a used car, if a Honda dealer. They offer financing on used cars. It sounds like you are not getting the car thru a Honda dealer but just any dealer. In that instance, it is rare for any dealer to not offer financing.

But Some people prefer their own financing so they don’t have to deal with a dealer any longer than they have to. A plus with this is you have a set budget and you know the terms before hand. You can use this to negotiate actually. Say your loan is set at $16k and you can’t go a penny over.

you DONT need an exact car in order to get pre-approved. You can go in and ask for a loan and don’t actually go thru with the loan if you don’t get the physical car you want.

a car loan is sooooo much easier to get than a home loan. Plenty of big name banks offer car loans.

 

[bluehatch17]

I’ve brought about 15 cars in my lifetime, and have only usually brought the car when the maker had a special finance rate. So basically I have financed thru Honda or the auto maker every time. And it is usually 0,.9 or 1.9%only. No bank can match the 0% .9%.

As long as your credit isn’t crap. Buying a car is an extremely simple process.

 

[BoostinIX]

Definitely agree with have something lined up ahead of time if possible. Just bought a '20 SI this past weekend. Negotiated the Out the Door price vs sales price so there were no surprises. Don't get their add-ons. Don't let on you have financing til you hear their offer. If it's better, awesome. If not, politely decline and present your pre-approval check or whatever. They'll let the sale price drop if they think they can make it back in add-ons and interest rates.

 

[ItalianCheeseBread]

Thank you for all the answers, my credit shouldn't be that shit but I have no idea since the months leading up to this year have been a shit show with me and my mother. Not to get to much into it I'm still paying for her doings, but I am living on my own now so this is a new start in terms of a Car and for me.

As for the no financing part its a private dealer that I'm checking out, but It makes sense If I pay a bit more at a lower APR because that would overall be much cheaper in the long run. I will do more research with the knowledge in hand and hopefully I can come out with something.

 

[RKS17]

Definitely agree with have something lined up ahead of time if possible. Just bought a '20 SI this past weekend. Negotiated the Out the Door price vs sales price so there were no surprises. Don't get their add-ons. Don't let on you have financing til you hear their offer. If it's better, awesome. If not, politely decline and present your pre-approval check or whatever. They'll let the sale price drop if they think they can make it back in add-ons and interest rates.

I helped with a purchase this week and the dealer is upfront about their pricing, $22k if you finance through the dealer (BoA) or $24.5K cash. Credit score was over 800 and they offered 5.1% for 60 months which is very high. Dealer asked nicely that the loan be held for 91 days so they can get their kickback. The plan is to pay everything but $300 with the first payment and then make 3 additional payments of about $100.

 

[tacthecat]

Be sure to read the contract - make sure the total interest isn't added into the amount to be paid (ie front-end loaded). $2,500 discount for NOT PAYING CASH is absurd.

 

[RKS17]

Be sure to read the contract - make sure the total interest isn't added into the amount to be paid (ie front-end loaded). $2,500 discount for NOT PAYING CASH is absurd.

I did make sure it wasn't front-loaded. Must be a nice kickback from BoA.

 

[Pawlkerson]

Hi there! It's great that you're doing your research before financing your first dealership car. You can shop around for different lenders to compare rates and terms. As for which financers to choose, it really depends on your personal financial situation and credit history. Getting pre-approved for a loan before going to the dealership is always a good idea, so you know what you can afford and can negotiate from a position of strength. Good luck with your car search! And if you ever need help with financing a home, be sure to check out Mortgage Broker in Wirral. They can provide expert advice and help you find the best mortgage options for your needs.

Sponsored