Hello,
I currently have a two year old financed vehicle with NFCU and I just got approved for a new loan with my car as a trade in. I asked them what my new rate would be and they told me that "my current rate is 4% but the rate won't lock in until the bank draft is paid and it can be higher or lower depending on when it locks in." I have never heard of this before for a car loan. Does someone know how this works?
I basically buy the car with a blind rate since even the 4% isn't guaranteed? Right now they are offering 2.9% for the terms I'm looking at. I'm confused. Shouldn't they say "yes you're approved for this amount, for this interest rate, and for this amount of years? I didn't have a specific car picked out with VIN and was heading to the dealership this weekend to pick the car I want. I can see rate locking for homes but for a car that seems odd to me.
Anyone have any experience with this? What if you have 4% now, buy the car at the dealership based on that for payment purposes and then they decide you get 10%? That would be a huge issue considering you already took the car home and are stuck in it. That seems like setting someone up for failure. My current loan with them was cut and dry. I asked for the amount, was approved, was given 4% for the term of the loan in October 2012 and took the draft to the dealership and all was good. What makes trading my car in, a rate limbo situation?
Thanks for any help!
