I figured out how much I needed to borrow using the contract. If you plan on purchasing an extended warranty or gap insurance, don't forget to figure those into your calculations.
Then, I got approved for a loan for that amount at what I thought was a very good interest rate. When I got to the dealer, the finance manager asked me if I needed to borrow. I told her that I already had financing, but if she could beat my rate, then I would let her finance my purchase. I did not tell her the rate that she needed to beat, I just asked her to give me her best rate. Her best rate was a full point lower than my approved financing, so I let her finance my MDX.
So, the answer to your question is both. Shop around, and then see what the dealer can do for you. Check out BankRate.com and PeopleFirst for a good starting point for rates.
You're advice was appreciated, ericp, as I will be speaking with the finance gurus next week, and wasn't sure how to approach the "can you beat it" philosophy. I am also interested in knowing what rates may have been offered by Acura recently. Thanks
Well, as you may know, that's pretty much depends on your credit. Once you have an excellent credit (may be higher than 720?), then their financing looks good (mostly better than well-known banks).
One thing you have to know is that nowadays they don't accept financing from E-LOAN and PeoplesFirst since, they said, those companies do not promptly deposit the money. I have contacted several dealerships in SF Bay Area, and they told so.
If you own real estate, try a home equity loan. The rates are at prime which is 4.75% and they are set up over 30 years, and you can pay them off sooner if you want. In addition it's tax deductable on your income taxes. This will beat any rates on car loans today!
That is a great rate. I have very good to excellent credit, and anticipate that I would qualify for a good rate through the dealership. However, after meeting with the finance officer, i did not have a very reassuring feeling that he would give me his best effort. Does anyone know of a central "source" for American Honda financing that I could possibly contact?
Home equity is definately a good way to go. It's rate is lower than most of the best auto loans, and is tax deductable. The first couple years you just need to pay the minimum interest, then you have the next 20 to 30 years to pay off the principle. Of course, the car does not last as long as a home, but you can tailor the payment schedule to your own financial situation. The rate, the flexibility and the tax benefit just can not be beat.
The finance officer is not the one to ask. Everything in this business is negotiated. Honda gives the dealers a buy rate as do the Banks. The finance manager 99% of the time works on a percentage of what he sells. If the buy rate is 4.9% on $40,000 the interest is $6,248.73 on 6 years, if he sells it at 6.9% he picks up an extra $2,714.23 on the back end, he gets a percentage, maybe 20% he made $400.00 plus. If the buy rate on a warranty is $1400 and he sells it for $2100 he made another $150.00, Plus, the same with protection packages, alarms, life insurance, gap etc.
Ever notice why your first pencil from the desk is usually high, it's a loaded payment, rate, warranties etc. You say yes, they may have 5k on the backend. When you get back to finance they try to sell the extras, if you don't go for them they adjust the rate higher so your paper work reflects the payment you agreed to, if you say yes they bump the extras cause they sure can't tell you the payment is the same with them, making more gross.
Know what rates are out there before you go in and have a back up plan. Don't worry, they are not going to let you leave unless you have something they can't get. DON"T give false info on your rate though, they all have a copy of the Roberts report that gives everyones rates so they will know if it's a bluff and they will win.