| SuitedPair |
I showed up at my dealer with a NetBank check with a very favorable rate. Honda Financing couldn't match it but the finance manager wanted to check around.
He came back to me with a match from Onyx Financing (an arm of CapOne, i believe), and told me he'd prefer to go with that one because it would save him some paperwork with no financial benefit.
That sounded a little fishy -- why would a dealer possibly go through the hassle of a third-party finance company without any financial upside.
I'm indifferent as long as the rates are the same -- should I be?
Thanks! |
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| JL_SS |
quote:
Originally posted by SuitedPair
I showed up at my dealer with a NetBank check with a very favorable rate. Honda Financing couldn't match it but the finance manager wanted to check around.
He came back to me with a match from Onyx Financing (an arm of CapOne, i believe), and told me he'd prefer to go with that one because it would save him some paperwork with no financial benefit.
That sounded a little fishy -- why would a dealer possibly go through the hassle of a third-party finance company without any financial upside.
I'm indifferent as long as the rates are the same -- should I be?
Thanks!
A lot of dealers use third party financing - often they can get better rates than Honda/Acura financing. Both my vehicles are third party financed. Of course there is a financial benefit , they get a certain percentage of loans written. I don't get the fact that it would save him paperwork - you show up with a check and there is no financing paperwork. |
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| SuitedPair |
He said NetBank requires tons of documentation.
I guess my real question is: Is he probably getting some upside from using the other bank and is it reasonable for me to ask him to share it (or is it likely a small amount)? |
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| JL_SS |
quote:
Originally posted by SuitedPair
He said NetBank requires tons of documentation.
I guess my real question is: Is he probably getting some upside from using the other bank and is it reasonable for me to ask him to share it (or is it likely a small amount)?
Oh, I assumed it was a pre-approved credit/home equity type check. What dealers try to do is finance higher than your approved rate. Say the dealer finds a bank that approves you for 4%, the dealer comes back and says, you qualify for 5% based on your credit history. If you haven't done the research, the dealer pockets that extra 1%. So, when the dealer came back and said that he could match Netbank and wasn't going to make any money, that may be true or he may have found lower and will pocket the rest. The only way to really know is to call around and find the lowest rate you really qualify for. Joining a credit union typically knocks off 0.25% of their best rate. AAA has good rates sometimes. Watch out on the fees also, because some dealers will try to increase those to make up for the rate loss. |
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| SuitedPair |
Yeah -- I'm just bad at communicating on messageboards.
It is a pre-approved check -- he claims that Netbank requires an unusual amount of documentation from him to process the check (which sounded weird).
I looked up Onyx Acceptance on the BBB website -- they have a rating of "F" which isn't too promising. |
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| JL_SS |
quote:
Originally posted by SuitedPair
Yeah -- I'm just bad at communicating on messageboards.
It is a pre-approved check -- he claims that Netbank requires an unusual amount of documentation from him to process the check (which sounded weird).
I looked up Onyx Acceptance on the BBB website -- they have a rating of "F" which isn't too promising.
It's hard to screw up an auto loan. The dealer is arranging the loan paperwork, so I wouldn't worry much about BBB rating. It's not like they have to service the loan like a mortgage (escrow,taxes,etc.) You just want the lowest rate. Try the AAA site and search on the internet for the lowest rate in your area. If you can't beat the Netbank/Onyx rate than that is probably the lowest you can get. If you can and find a financing company that you are more comfortable with, then that's great. I found that the local credit unions around here were the lowest when we bought. |
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| oilchange |
Could be another dealer scam. He may put extra fees, extra long term on the loan, raise the rate, switch docurments after you read them and so on.
Maybe this is just to make you confused so you might sign anything when you get tired of being beaten to death by the finance bully at the dealer.
Might be that this dealer's "F" rated finance company is "F" for Foolish.
If you can, read Remar Sutton's book about car buying. Alot of dealer tricks are described. |
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| ebs0303 |
I had an issue with a NetBank check as well.... basically, they wouldnt accept it... told me that they "had to do all the work", it would take months to get paid, etc. They offered me a 5.25% loan via Honda financing (I had 5.19%) and I just took it - amounts to about $50 over the life of the loan). It will come off their dealer review when I get the call. I am also planning to call the manager (although I know this is fruitless, but just to get it off my chest) to ***** that they should make it known before you sit down to finance that they wont take e-loan or netbank checks. Now Im thinking I have to go review the docs I signed again to make sure nothing else was thrown in...
Its just a shame that car buying has to feel like such a shady business. every step along the way, you just dont know if you are getting taken to the cleaners or not. |
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| JL_SS |
The best thing you can do is to research the lowest rate you can get through the internet, local sources, mfg financing specials, aaa, etc. Also check your Fico score to determine if you will qualify for the lowest rates (www.myfico.com).
When you are negotiating, ask for the dealers lowest rate, it will likely be higher than the lowest you could find. Then you inform the dealer what you can get and 9 times out of 10, the will come back with a match or slightly lower. The loan paperwork is then handled through the dealer making it simpler.
Before negotiations, plug the best rate you could find into an internet loan calculator to determine monthy payment per $1000.00. Then you can double check the monthly paymeny value with the numbers they come back with. I actually have a loan calculator programmed into my calculator so I can determine the exact payment accounting for any differences during negotiation.
And always check all numbers in the contract with your own calculator, and read all terms and make sure that all agree with what you have negotiated.
If you do your homework (on both vehicle price and financing) and double check all the details, then you shouldn't ever feel like you have been taken to the cleaners. |
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