I own a car dealership... ask me anything.

[StartingOver10]

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@myesha87 wrote:

I have a question.  I have a 2013 Kia Sorento that I got in 2012 for $23k and I had a 16% interest rate.  I didnt want to get a new car but I had less than perfect credit.  Since then I have gotten my credit scores up in the 700's and bought a house and refinanced my car for 2.69%.  I have an hour commute each way to work and now I have 64k miles on my car.  I still owe 16k on it and I'm thinking of trading it in can you please tell me what the best course of action would be?  Thank you

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IMO the best course of action would be to NOT trade your vehicle. Keep it until you aren't upside down on it. You have a decent rate now and not too many miles. True, its a Kia, but get in position to buy something without adding negative equity to the purchase.

If you still want a new one, then sell your vehicle private party. You may have to bring money to the closing if you are upside down on it.

The worst thing you can do is trade in this one for something else - it's too easy for the dealer to distract you from the real purchase price of the new vehicle by manipulating the trade in figures. (Read up on 4-square negotiations - dealers still use this).

Separate the transactions. Sell the one you have if you don't want it and buy the new one without a trade. Bring in your own financing. You will get better results. Good luck with your decision to keep or sell your current one.

[Anonymous]

I sold Porsches from 1972 to 1980 and understand how leasing works.Can you provide the depreciation percentage and money factors for a 3 year lease for the following cars?

LexusRC F

BMW M4

Audi R5 

Cadillac ATS-V

Thanks,

[Anonymous]

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@Anonymous wrote:

I sold Porsches from 1972 to 1980 and understand how leasing works.Can you provide the depreciation percentage and money factors for a 3 year lease for the following cars?

LexusRC F

BMW M4

Audi R5 

Cadillac ATS-V

Thanks,

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I doubt he's going to know the answers to your question.  Each manufacturer sets those for their own promotional leasing programs.  You can probably get them from the dealers if theyy realy want your business.

[Anonymous]

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@Anonymous wrote:

I just went into a dealership last night. I was there for 5 hours. They kept on asking me what I was comfortable with payment wise all night. I had 2008 dodge ram2x4 with a dinged carfax thanks to a previous dealer getting screwed by the person trading it in. I owe 13,600 on it and I hate it, just bought it for for a few years until i could get what i wanted. My payments are 330 at 4.5% interest.

I wanted to trade it for a 2014 Dodge Challenger SXT selling for 32k, dealer rebates were about 5600. They told me the would try and get me qualified, they came back and said something about BEACON scores being low, like in the 490's. What is BEACON score. My fico scores were 572, 602,610. They said they couldnt get me a good rate because of the beacon score and came to me with 22% LOL! Then they came back at 18.99% LOL again. Their final offer was 16.99% paying my truck off at 13,600 zero down and final out there door cost of 581/month for 72 months. I havent had a rate that high since I was 21, I just got one 2 years ago at 4.5 percent with my wife.

I had the main manager come out with his fancy watches and sit to tell me its a 2014 challehnger sitting around for 300 days in the back lot and he needs to get rid of it and hes losing 3500 bucks on the deal by paying my truck off. He also said he would throw in 500 dollars too bring my payment down to 570 and that I should take the deal because i wasnt going to get any better. I said lower my interest rate. They said it couldnt be done and with a good payment like that why was i worried about the rate anyway.

So I walked. 16.99 percent is ridicilous, even with an avrage 600 FICO I should be able to get at least 10 percent rate, I have paid off all my cars no problem in the past. What is a BEACON score and why won they use my FICO? He just emailed me today saying what would it take to get me into the car today? What advice can you give me?

Thank You

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@Jlu wrote:

I figured I could probably help dispell some myths about dealership financing since I run one.

The only question I won't answer is personal details about my dealership and it's location. Anything else is fair game.

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A Beacon score is an internal Equifax scoring model used for auto purchases.  It's entirely possible that your score is in the 490s even though your Fico scores are higher.  If so, you are going to have a hard time getting the interest rate you are looking for. Have you tried any credit unions?

[bunkie10]

I am new to the forums and forgot to add that my fico is 693.

[DanielK]

Hello- I'm thinking of starting to look for a new car. I have a 2004 Nissan Sentra that is paid off with just over 100k miles. It runs perfect but has some body damage, nothing major. The front fender is dented and it needs a new front bumper from when someone backed into me. Is it worth it to get those fixed before I try to trade it in? I know I won't get much for the car which kills me since I bought it new and have had it ever since. I'm working on building my credit up more and saving to put at least 1k down with my car. I want a better interst rate but need to get my score up, I have around a 650-660 right now. Any advice would be helpful! Thank you! 

[heyitsyeh]

DanielK,

What kind of car are you looking at next and why?

[DanielK]

I'm looking at a Prius. I drive about 90 miles roundtrip each day for work and spend over 200 each month on gas so I'd like to get a nicer newer car that gets better gas mileage. I'm not necessarily looking at a brand new car, I've been looking at used ones for around 15k. I graduated college a year ago and make decent money but I'm trying to really think through all my options and make the right decision. 

[Anonymous]

Thanks so much for taking the time to answer these questions! Here is my situation:

I'm 20 years old and looking to buy my 2nd car(my first one is being given to a family member(still owe 7k on it)

My monthly income is around $3,300 before taxes. My DTI is very low, maybe 15%
I have an aaoa of 9 months but I have 20 months of ontime car payments. (Aaoa thrown off by a recent credit card)

I have one recent collection on my account for an unpaid utility bill($166) But other than that, no baddies.

Scores are ex 626 Tu 630 EQ 647

The car is 26k and I am putting 10k down. (Maybe even more if you think it's needed)


Like I said, my firt autoloan has 7k left on it, which I can pay down to 5k if you think it will help any.

What do you think of this situation? Odds of approval? Any foreseeable issues?

[sam818]

I have my current FICO8 scores in the high 500's and the modelling indicates  getting over 600 is simply a matter of paying down CC balances.

I am guessing my auto-enhanced is higher since I recently paid off a $75k auto loan with Chase, (and an $87k auto loan prior to that) and no late payments. Its my other credit holding the score back.

What possible auto-enhanced increase might I expect with a high balance auto loan history?
Dealers I've emailed often have no idea what "auto-enhanced" is and usually respond generically "why don't you come in and we can run your credit"
I am  not keen to have multiple dealers play with each bureau shotgun style.

My question is: what approach do you suggest I take with a dealer with regard to finance for a new car?

Surely the finance guys should know which bureau and version of a score that their captive finance arms use. I've even asked about miniumun tier scores for BMW & Mercedes and the only info I could find was that BMW had a min. score of 575, but know idea of which bureau or score version.

Any thoughts?