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New Member
DBay2012
Posts: 2
Registered: ‎09-29-2012
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New Car Loan - Not Current Bank Customer

It's been 15 years since I've purchased a new car. As you might have guessed, some things have changed over the years in banking and loans. I'm not that savvy on how to do things these days. So I made a quick call to my personal bank concerning their interest rate for new car loans. They told me that they have a standard rate for auto loans, and shared that it was 4.24%. That didn't make sense to me -- what good is a FICO score if they give everyone the same interest rate? I have an excellent credit rating and I think I should be able to get a much lower interest rate than their "standard" rate.

 

Before calling my bank, I had checked out some interest rates for auto loans via sites like cars.com and bankrate.com. One bank in particular has a lower interest rate than my own bank -- 1.5% lower, in fact. I am not a current customer of that bank, however. Generally speaking, to get an auto loan from a bank, do you necessarily have to be a current customer? I know banks can have their own specific rules about whom they lend to, but I'm just wondering, in general.

 

I'm getting ready contact that bank, might perhaps end up applying for the loan from that bank. Maybe I will also bargain w/ my bank, to see if their "standard" interest rate falls in the face of a lower rate from another bank.

 

Is that a good route to take? Thanks for any assistance anyone can give.


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creditnocash
Posts: 2,255
Registered: ‎07-23-2012
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Re: New Car Loan - Not Current Bank Customer

usually you do not. 

the bank i work for alot of the customers that have bank auto loans have no other accounts with us. 

but we do not offer loans from a branch they are usually shopped around by the dealer and given the best rate we get the loan and the consumer ethier pays online or comes in the branch to pay it. 

 

if you buy a new car (with financing the dealer will shop around)but my fico sees auto loan inquries as one if you do it within a two week window. 

 

so if you have your heart set on a car and go to a few dealers. 

usually when they have the 0% percent specials for 3 years or something or other like that if you want to do 5 i think its like 1.99 percent or something like that. 

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Shogun
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Re: New Car Loan - Not Current Bank Customer

That's not a bad rate.  As far as FICO scoring goes, you have to have a certain score to get the loan.


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StartingOver10
Posts: 4,524
Registered: ‎03-06-2010
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Re: New Car Loan - Not Current Bank Customer

[ Edited ]

The way a bank gets in and out of a type of product (loans are a product) is by changing their underwriting criteria, including the interest rate.

It sounds like your bank is not encouranging auto loans at the moment.

 

You can get a auto loan anywhere and you don't have to be a previous customer of the bank before you apply for the loan - especially with your scores.

Find a lender you can do business with at a rate you like and get your approval before you go to the dealership to buy. If the dealership can beat the rate - great. If not, then you have a good one in hand. Personally I have purchased both ways, with approval in hand, and using the dealership. It is much easier to purchase with the approval in hand and you avoid all the gamesmenship that the F&I guy likes to try when you get to his office (adding gap, warranty's etc).

 

If you haven't purchased a vehicle in 15 years from a dealership that part of the sale is the same. Make sure you do your shopping online first - there is a great difference in price between online pricing and pricing in the showroom. (Showroom is substantially more). I find it helps to have everything lined up in advance before going. Bring your smartphone with you so you can check everything they say right there - it will save you a great deal of money by making sure you get the mfg incentives and that sort of thing.

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webhopper
Posts: 7,225
Registered: ‎09-16-2011
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Re: New Car Loan - Not Current Bank Customer


StartingOver10 wrote:

The way a bank gets in and out of a type of product (loans are a product) is by changing their underwriting criteria, including the interest rate.

It sounds like your bank is not encouranging auto loans at the moment.

 

You can get a auto loan anywhere and you don't have to be a previous customer of the bank before you apply for the loan - especially with your scores.

Find a lender you can do business with at a rate you like and get your approval before you go to the dealership to buy. If the dealership can beat the rate - great. If not, then you have a good one in hand. Personally I have purchased both ways, with approval in hand, and using the dealership. It is much easier to purchase with the approval in hand and you avoid all the gamesmenship that the F&I guy likes to try when you get to his office (adding gap, warranty's etc).

 

If you haven't purchased a vehicle in 15 years from a dealership that part of the sale is the same. Make sure you do your shopping online first - there is a great difference in price between online pricing and pricing in the showroom. (Showroom is substantially more). I find it helps to have everything lined up in advance before going. Bring your smartphone with you so you can check everything they say right there - it will save you a great deal of money by making sure you get the mfg incentives and that sort of thing.


With your scores, I would just check with the dealer and investigate promo rates that dealers may be offering... You should get top tier approval anywhere you go, and the dealer will likely have access to more lenders than you will by applying to online banks.  I say dealer is the best bet.  If they try to get you a rate that is higher than 2%, walk away! 

 

Navy Fed is doing 1.79% right now.  I'm getting a loan with them later on this month.


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DBay2012
Posts: 2
Registered: ‎09-29-2012
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Re: New Car Loan - Not Current Bank Customer

Thanks for all the great advice!


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