Best otion for Auto Loan - Buy and Refi with Chase/DCU or just take lowest rate now - 4.5% or 6.5%

[chitwn]

Trying to determine best action for new vehicle ordered that is supposed to be delivered in 2 weeks.  Currently have a loan with DCU that I took on new vehicle at 1.99% in early 2020 for $50k...  still owe $17k. 

Vehicle I ordered I got at 1% under invoice and dealer will give me an additional 3% off of invoice if I finance through them (3 month minimum) - approx $30k loan through Chrysler.   (3% discount approx $1550 off invoice)

I told Dealer I would prefer not to go with Santander or risk having my credit inq's be abused (currently have 2 INQ's, all scores around 750 and 21% overall Util, no baddies).  Dealer asked me if I bank with Chase - Yes, I bank with Chase, DCU, PenFed and Navy.  Dealer said I can get my loan through Chase and just bring it in to them and that would qualify for "their financing" but have to sustain it for 3 months minimum.

So I did pre-quals for Chase and Cap 1 - both around 6.6%......

My rates with DCU and  NavyFederal around 4.5%

I have never done a Refi before and wonder if I am better going with Chase at 6.65% and the refi in 3 months with DCU (but will DCU still be at 4.5% in February?) and save the 3% on vehicle purchase price (approx %1550)

or just run with my current 4.5% rate with one of my credit unions and forgoe all the manuevering and a Refi in 3 months...

What would one do in my shoes on this day?  TIA!

[Creditplz]

I would go with theirs.... BUT if you don't care about the relationship with this dealer.... you can refinance wayyyy sooner... the sales persons commission just gets severely reduced if you do that in most cases. 

but also we are in a time where one must worry about his pockets a bit more then sales people.... sooooo just my thoughts... also I was checking rates and some CU have rates lower! 2.99 at my local CU for 60months and 3.49 for 72 months

also remember in most cases... when a dealer seeing an opportunity to make even more money off of you, they will... so take them for a ride this time!

[ridgebackpilot]

The discount you're getting up front is probably worth a few months of higher interest. It's easy to refinance with NFCU or a similar lender later if you determine that would save you significant money over the life of the loan.

You're doing the right thing, running the numbers to maximize your savings. I'm surprised that Chrysler doesn't have a captive lender that is able to offer you a subsidized interest rate that beats all the credit unions. I've recently financed several vehicles through Ford Motor Credit, some of them at Zero (0) percent interest! (But rates like that are unlikely today, even from captive lenders)...

[chitwn]

Thank you Creditplz  - I was looking around for rates under 4% but most of those offers seem to be State specific credit unions....  haven't found anything in Illinois under 4% recently and I am afraid by Decemeber iy might be hard to find under 5%

[chitwn]

Chrysler did or does have some much better rates/offers than CU's but they never subsidize the Jeep Wrangler Rubicons hat I have ordered.

I was trying to crunch the numbers but the unknown factor is inflation and interest rates in Feb when I would be able to refi.... versus saving 2 points for 3 months  --  originally when I started looking to place an order for 2023 models in the summer my credit union rates were all under 3% as most of us know it doesn't seem to be going anywhere but up in the immidiete future...  I have gone back and forth multiple times on my 2 options.  Appreciate your input Ridgebackpilot - thanks!

[chitwn]

Fed expected to aggressively hike rates to 5%

 

https://www.yahoo.com/video/fed-expected-aggressively-hike-rates-185154719.html 

[cashorcharge]

---

@chitwn wrote:

Fed expected to aggressively hike rates to 5%

 

https://www.yahoo.com/video/fed-expected-aggressively-hike-rates-185154719.html 

---

Yep....I would be fairly certain that rates are going up on Wednesday for sure....

[chitwn]

Yeap -  DCU just raised their rates to 5.24% from 4.5 on Sunday

[chitwn]

So I went ahead and apped with Chase after I saw the DCU rates jump and would expect more rate changes after tommorw...

Chase pulled from Transunion and I got 6.34%  48 months  $50k approval. 

Kind of thinking maybe I shoud also App for PenFed or NFCU to lock in at 4.5% before tommorw rate hikes

[i4owner]

Was your pre-qual with Chase done on your own?  I received an Pre-qual offer from Chase at 6.5%, yet when dealer presented the deal to Chase they came back at 5.04%, and dealer got Chase to match my Navy Fed offer of 4.69%.  So, Dealer may get better rate from Chase.