Honda Finance Rates for the CTR

[Iilac]

I wished I can use the CU that @98-0425 used. Too bad it's only for Hawaii and Las Vegas residents......

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[Iilac]

you guys are so much smarter than me and I read for a living

Membership is worth it. They have some great loan and CC products. So is NFCU as well if you can get in.

 

[.grimace]

If it helps anyone get a better rate happy to post it

 

[Ekaker1]

They let you refinance right away? I thought you had to wait a couple of months. That's pretty cool.

Not only did they let me refinance right away, they had a $200 refinance bonus going on. Makes me feel like I got the car for under MSRP now lol.

 

[butdamnbrian]

on the bright side, for folks with a high rate, this is a solveable problem - refi! i’m sure applications differ from lender to lender, but i think some ask for household income (not just individual earnings) - for the 8% person above, it might be worth looking for one of those lenders.

this time around, i went with lightstream for my auto loan. they matched the loan terms from my credit union, but their loan is unsecured, meaning i didn’t need to add them to my vehicle title as a lienholder and the car is solely in my name. best ever. i have the pink slip in hand and can sell the car rapidly if i ever need to. dealing with a lienholder and not having the pink slip makes selling a car annoyingly slow, so i am pleased with lightstream!

 

[FaDz]

I’m currently at 3.3 from honda financial. Initially they were giving me 5% and said no thats fine since USbank approved me for 3% if i pulled a car loan through them. They wanted me to finance through honda and yhe best they could do was at 3.3 so i took it. My question is now is it better to refinance to get a better rate or this is the best rate i can get?

 

[JW0914]

I got 3.69% from BoA with an 810 score, may look at refinancing at some point, but it's not the worst rate in the world.

You won't find a better rate for >36 months financing, as that's the lowest Prime+ rate as of this month due to the Fed's interest rate increases.

Honda financial gave me somewhere between 5.5 and 5.99 percent with a 750+ credit score. I think they bumped it though because they sold me the car at MSRP and they wanted to make more money on the back end. I went the next week to Navy Federal Credit Union and refinanced for 3 % for 60 months. This was in September

Generally, a bank or credit union will give a better rate than Honda Financial.

I'm at 8.6% for 72 months from honda financial services. I kinda got fucked I guess.

No way to know, as it depends on your credit score, credit history, and variance of credit types. That high of an interest rate indicates at or below a 750, and/or negative items on your credit report (in the past 7 years, late payments, collections, tax liens, etc.), a debt to available credit ratio >5%, and/or numerous hard inquiries in the past 12 months.

I got 5.75 from Honda two months ago and refinanced immediately through Lightstream for 3.34.

Shopping around should be done prior to buying the vehicle, else one risks paying additional finance fees

I can still get 2%, same as last year.

Highly unlikely, unless you're getting point discounts for other products you have with the financial institution, and/or you're financing <36 months.

800+ credit score and he gives me 4.95% for 36months through Honda Financing. He said he would knock it down to 4.25% if I bought the extended warranty and wheel protection. He made at least 2% off of me but little did he know, I would pay this note off in 5 months.

Prior to financing any purchase, it's wise to pull your report and scores through MyFico.com and utilize a bank or credit union over Honda Financing, as you're almost always going to get a higher rate through Honda Financing.

Paying the loan off in 5 months will not help your credit, and will likely have a slightly opposite effect. If you want to avoid the interest, pay all but $500 off, calculate what the interest will be per week, and make weekly payments equal to the interest + ~$15 (interest will be a couple of dollars maximum).

• If looking to pay the least amount of interest possible, and are drawing against an account that will always have the payment amount available, weekly payments result with the least amount of interest paid if interest accrual is daily.
  • This is the reason why it's recommended to always choose at least bi-monthly payments, since this results with an extra payment every year (13 payments vs 12)

• If you don't have a mortgage or other active loan on your credit report, your score will plummet upon paying off a loan, as not having a mortgage, or other type of active loan, dings your credit score substantially. I don't know why this is, it's simply a fact of FICO's algorithms.

...My question is now is it better to refinance to get a better rate or this is the best rate i can get?

You're not going to get a better rate, as rate increases by the Fed were implemented this month.

shop around until you get 1.99% or better unless your credit score is horrible

Not going to happen if wanting >36 month financing... with excellent credit, anything over 36 months will always be >3%, and with the Fed's rate increase, likely around ~3.7% for 48 - 60, ~4% for >60.

 

[98-0425]

Highly unlikely, unless you're getting point discounts for other products you have with the financial institution, and/or you're financing <36 months.

Why would I lie about what interest rate I got at my local FCU? All I had to do was open a savings account and have my loans credited from that account. Financed 60 months.

 

[JW0914]

Why would I lie about what interest rate I got at my local FCU? All I had to do was open a savings account and have my loans credited from that account. Financed 60 months.

2% on a >36 month loan is below prime... Please provide a screenshot of your loan details showing the interest rate and loan term, redacting all personal info.

I'm questioning it not because I'm accusing you of being dishonest, but because the finance industry operates on the same norms as their peers, which is why, prior to December, the lowest rates were ~3.34% on long term loans. Rates are based on Prime+, where the Prime rate is set by the Fed and the plus being the extra interest the financial institution charges to make a profit, and financial institutions cannot charge an interest rate less than Prime.

 

[callmedh]

2% on a >36 month loan is below prime... Please provide a screenshot of your loan details showing the interest rate and loan term, redacting all personal info.

I'm questioning it not because I'm accusing you of being dishonest, but because the finance industry operates on the same norms as their peers, which is why, prior to December, the lowest rates were ~3.34% on long term loans. Rates are based on Prime+, where the Prime rate is set by the Fed and the plus being the extra interest the financial institution charges to make a profit, and financial institutions cannot charge an interest rate less than Prime.

Ummm, you replied with a picture of the website showing the 2% number. Yes, pictures can be doctored, so I went to the website myself, and there it is...2% including a .24% discount with autopay. When I purchased my Type R, I went in knowing that I could get a rate in the low %2's (this was a year ago), and the dealership was more than happy to match it. I would suggest to everyone buying a car to go in armed with this information. It is easily verified by the dealership.

Yes, it did not mention how many months...

 

[JW0914]

Yes, it did not mention how many months...

This is the most critical piece of information, as rates are correlated to the length of financing, as well as the amount financed. ~1.99% is common for <36 month loans, but not anything over, so I'd be seriously surprised if they offer 2% on a 48+ month loan since that would be well below the Prime rate set by the Fed.

• Finance institutions cannot, and will not, charge an interest rate less than Prime for a variety of reasons, most important of which is it would massively eat into their profit margins.
  • Credit card introductory offers are the exception, only because it's an introductory offer, with a Prime+ rate being applied within 6 -18 months.

 

[Iilac]

Why would I lie about what interest rate I got at my local FCU? All I had to do was open a savings account and have my loans credited from that account. Financed 60 months.

This is the most critical piece of information, as rates are correlated to the length of financing, as well as the amount financed. ~1.99% is common for <36 month loans, but not anything over, so I'd be seriously surprised if they offer 2% on a 48+ month loan since that would be well below the Prime rate set by the Fed.

• Finance institutions cannot, and will not, charge an interest rate less than Prime for a variety of reasons, most important of which is it would massively eat into their profit margins.
  • Credit card introductory offers are the exception, only because it's an introductory offer, with a Prime+ rate being applied within 6 -18 months.

He posted that it's financed for 60 months.

 

[ayau]

It clearly says 2.0% APR on their website.

https://www.alohapacific.com/loans-rates/personal-loans/personal-loan-rates-fees#auto

Is there some regulation that requires credit unions to charge above the prime rate? If there is, then they’ll be written up. If not, they can charge whatever they want.

 

[JW0914]

It clearly says 2.0% APR on their website.

https://www.alohapacific.com/loans-rates/personal-loans/personal-loan-rates-fees#auto

Is there some regulation that requires credit unions to charge above the prime rate? If there is, then they’ll be written up. If not, they can charge whatever they want.

I don't know how many times it needs to be said before it becomes apparent that an interest rate means nothing without the loan term, as the two are inextricably linked.

As to the latter question, that's a good question, and since all banks do, it's more likely due to profit margins (as previously mentioned). You do have access to google and likely a phone =] Perhaps someone should simply call the bank in question?

• Since commercial banks utilize the liquid cash within their customers' savings accounts, which is why you're limited to six withdrawals a month without incurring a federal fee, to lend money and utilize interest rates to garnish a profit, choosing to have an interest rate below prime for long term auto loans (loans >48 months) is counter-productive to the financial institution.

• Additionally, all banks will advertise their lowest interest rate available for auto loans (i.e. Honda finance advertises 1.9%), however that low rate is only for loans <24 - 36 months... anything over jumps to ~3%+

Prime Rate explanation

 

[ayau]

He already said it’s 60 month loan. You can call the bank directly to confirm if you’re really that curious.

Just because majority of the banks don’t charge below prime, doesn’t mean that’s the rule. Unless there’s some regulation that says banks much charge auto loan interest above prime for x months, then the bank can do whatever they wish even if it may seem counterintuitive.

There are many ways a bank can generate revenue as you already know, e.g., requiring the customer to open/deposit cash into a savings account.

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