First of all, Bank of America is my main bank and has been for almost 30 years. They have financed my home mortgages at least twice, made loans for a previous car, plus they have my checking account and about 3 or 4 of their credit cards. I have been loyal to them and am happy to say they have never turned down one of my loan applications. Except this time, sort of.
It was definitely time to get a new used car (2016 Buick Regal) and take out a modest loan. I only asked for $16,000 and was instantly approved at 3.74 percent for a 48 month car loan. Great!
At the same time I got loan offers from Carvana (I ended up not buying from them) for 5.24 percent, Lightstream for 5.19 percent and lastly Capital One for 5.09 percent.
By the way Lightstream is absolutely terrible, avoid them if you can. They do not offer a phone number to call for customer service , you have to email them for a phone number , and then the line goes busy after a 10 minute hold. They must think they are Yahoo or Google, I can't imagine using their loan system.
Obviously, the BofA rate was the lowest by far. I called the service line and the Loan Officer said that she had good news and bad news for me. The good news was I was approved for the loan at 3.74 percent. The kicker was I had to submit copies of my tax returns, pensions, social security , alimony if any, investments, etc. I kid you not, all for a $16,000 car loan? I have had unsecured zero percent balance transfers for that amount, with no documentation requested. Some of those were with no transfer fees as well from BofA , Chase, and Barclay.
I explained that I was buying a new vehicle the next day and didn't have time or interest in sending all this information to Bank of America, and besides the underwriter who demanded it wouldn't report to work until Monday morning. I had to buy the car by Sunday. None of the other banks requested any such documents, my FICO is 778.
Of course this messed me up and I had to go with Capital One's offer of 5.09 percent. Here is where it gets good. I found the perfect car for me, one that I had been looking for for several weeks. It just popped up on Cars Guru and it was so new that they had no pictures of the vehicle. But the description was exactly what I wanted.
I got there at opening time and negotiated a very nice deal for the car, well below the Dealer price and even below the private party price. The Sales Manager was delighted when he saw I was pre-approved by Capital One for 5.09 percent.
He told me he had good news for me. He was confident he could beat the 5.09 percent rate so he will save me money on the loan, isn't that good news? Yep, my final rate was now to be only 4.99 percent. Can you guess who was lending me the money? Yep, my good friends at BofA! Looks like the dealer pocketed the difference between 3.74 and 4.99 percent, and I got the shaft.
It isn't all bad. When you go directly to BofA for a car loan, the dealer and Finance Manager absolutely hate you. They make very little that way and they aren't afraid to show it. At least with them as middlemen they cut me some slack and gave me some concessions they wouldn't normally have, such as more money for my trade-in, and also letting me put my $5000 down payment on a credit card. Oh well , I now have a nice new car gleaming in my driveway!
Congrats on the new car purchase.
Thank you very much. Can you believe I was driving the same car for almost 20 years? It was a 1999 Honda Accord Coupe EX V6. It was very reliable until the very end when the transmission died and it would cost $1800-$2500 to fix. Oh yeah, and another $1200 for a new paint job to replace the faded, peeling color. Also $800 for a new timing belt. Kind of a no-brainer.
I still don't know how I stayed in the same car for so long. Now I am into the 21st century with all the bells and whistles and then some.
Congrats on the new car. I have a 2003 Kia SUV that I bought new and still drive it, but it's a 'backup' car, I live in the boonies and if you don't have reliable transportation you're stuck. I've never kept a car more than 5 years or so, but the Kia just keeps going and going.
I would have asked that BoA underwriter on what planet to you live? That kind of documentation would be pushing it for a mortgage. I bought a 2016 Mazda in Sept. 2017, found it online and knew that was the car I wanted. So I went to the small local credit union which had financed my previous car, they gave me a pre-approval for a $15k loan, didn't even ask for a pay stub, my word was good enough. Love my little red Mazda, I have to push myself to drive the Kia every so often - if you let a car sit too long in the desert packrats start setting up a new home.
One motivation for keeping a car so long is the knowledge that the car dealer will give you little or nothing for a twenty year old car that runs fine. Maybe like $900 or so. Why give it up for that kind of money? When my Accord Coupe became undrivable and needing at least $3,000 in repairs and maintenence and it had to be towed away, I still got $400 for it.
I just wanted to give a nice update for this thread. Without my even asking, Bank of America lowered my interest rate from 4.99 to 3.74 percent and also lowered my payment $8 a month, back to the purchase date.
Rather amazing because I had signed a contract at the dealer for 4.99% and would never think to ask for a reduction!
In a way, they will also benefit as I won't go ahead and pay off my car loan early now.
Regarding my 1999 Honda Accord Coupe EX V6 with the broken automatic transmission. I was only able to get $400 from the repair shops or dealer. The dealer sold it at the Manheim auto auction to some poor guy who paid $1700 for it. You can't test drive an auction car to see if it runs okay and he got shafted. I feel sorry for him, but the car dealer made out like a bandit.