topic Re: PenFed Payment Saver auto loan experience?? in Auto Loans

PenFed Payment Saver auto loan experience??

Anonymous — Tue, 05 Jul 2016 13:16:29 GMT

Anyone have experience applying for, getting approved and actually using the money to buy a new car with? Just considering this over leasing, and wondering how its worked for people. Please post any info you can like your scores, and the car/payment and whatnot.

This seems to be a great way to get a much more expensive car, like leasing. But it seems that this would only be beneficial to use on cars that will retail their value. Like a sports car that you wont drive everyday.

Thoughts?

Re: PenFed Payment Saver auto loan experience??

jeffm4688 — Tue, 05 Jul 2016 13:59:58 GMT

I know quite a few people with balloons including myself in the NY area who have used it to grab a cheaper payment on a more expensive vehicle, exactly like a lease. It has it's upsides and downsides. Ironically though my sports car I don't put a lot of milage on is on a conventional loan and my truck is on the equivalent of a payment saver loan but through my local CU.

My mothers car & brothers first car are both on balloons and I have a few friends with them. (brother got his first car on one with a payment of $230 and a final payment of $10K).

It seems to work best in a couple scenarios.

A. your getting a deep discount on a new vehicle which requires purchase (10K off a GMC sierra in my case) and/or your trading in a vehicle and live in a state with a tax credit is provided on a vehicle trade in (in my case)

B. Works well on vehicles that don't lease well in terms of money factor (think jeep wrangler which I think has a lowest MF around 5-6%)

C. Works well in really any other scenario as long as you keep good care of your vehicles OR you know where the final payment will be coming from

It's a good way to get a vehicle that is more expensive on a lower payment like a lease, however you do assume the risk that the vehicle value might not be as high as the bank anticipates. I wouldn't imagine it ever being too far off, as it's designed with some play around. In both of my cases both people haven't been upside down at the end of the loan, but you will most likely be upside down during the life of the loan.

I forgot penfed likes to do balloons on used vehicles as well, however I'd probably stay away from that if it were me, especially if the vehicle is already a few years old. Before I purchased my truck last month I was looking at a used cadillac CTS which had a price of $35K. Penfed offered me a balloon for $475 a month and a balloon payment of $15K where as my truck was purchase for $55K and have a balloon of $26K for $550 a month. I ended up taking the truck even though it was more expensive because I'd rather take the risk on a truck instead of what will be an 7-8 year old cadillac at the end of the loan.

Re: PenFed Payment Saver auto loan experience??

Anonymous — Tue, 05 Jul 2016 18:17:35 GMT

hahaha omg I hate these loans. lemme tell you why... I worked at PenFed and frequently people would buy a car that was outside their means and do the payment saver loans for the small payments. The loan would then come due, and people would forget that the loan term was over and be "shocked" that I was now calling for the balance to be paid in full. They then would become upset, that it would also report negatively if not paid in full before 30 days. So, this left a LOT of people scrambling to get a loan financed through us (which most of the time 50/50 we couldn't do, due to LTV limit) so people would then have to look elsewhere for a lender. If you want to do a payment saver loan, fine however just be very aware of when the balance becomes due, and know that you may or may not have a hard time financing it again due to the loan to value of the unit. Have a back up plan ready in the event you can't secure financing and don't be mad at PenFed if they can't do it.

Re: PenFed Payment Saver auto loan experience??

Anonymous — Tue, 05 Jul 2016 19:08:05 GMT

The two vehicles I had in mind were the Dodge challenger hellcat, and the Ford shelby GT350. Both vehicles are going to have HUGE resale values especially when I only put maybe 15k-20k miles on them in the 60 months I was looking at doing the loan for. So those two vehicles would probably be ok to do it on no? The balloon on the hellcat is like $32k at the 60 month mark. I could see that car being worth high $30ks if not $40k in 5 years with only say 20k miles. I would make money on that deal if I sold it and paid off the balloon payment. And credit history pending, it would be easy to refi a used car with that much equity Im sure.

Re: PenFed Payment Saver auto loan experience??

Anonymous — Wed, 06 Jul 2016 05:01:27 GMT

I'm also looking to do the payment saver from penfed for my BMW M2 in Sept when it arrives.

Re: PenFed Payment Saver auto loan experience??

RonM21 — Sun, 10 Jul 2016 11:19:30 GMT

Obviously this type of loan isn't for everyone, especially when some don't know what they're getting in to.