@Anonymous wrote:
Hi all...first timer on the page. We are looking to buy new, and finance 25000 loan on a new Ford or Honda. Looking to spend roughly $30000 on car with 5000 down. Fico is 798, carry no balance on cards, in home for 15 yrs and combined income is 100,000+ per year. Not worried about getting approved but how to negotiate the rate. If they come at us with a 5.99 rate when they are offering .9 to "well qualified buyers"...how do I get to that?
Thanks
There will probably be not much of a rate to negotiate.
1- a "well qualified buyer" is a subvented rate. That is, in lieu of some or all of your rebates you get a discounted interest rate on the loan through the manufacturer financing arm.
That is not debateable- and usually if the ad does not specify the term of the qualified buyer rate in big letters, it is for a 36 month loan
And also, like a rebate/incentive, the qualified buyer rate is model and term specific. Longer the term the higher the rate. if the vehicle you want does not have a rate offered you are not getting it.
There are really no rates below 2.49%-2.99% that are occurring naturally in the wild of banks/credit unions. Rates lower simply do not pay the costs of the transaction.
2- In lieu of a subvented rate you get whatever normal bank financing rates through the banks they use are. I have no idea what those rate are, but you will probably see a rate that starts with a 2 or 3.
If you want to negotiate: bring your own best financing- that is get a preapproval or blank check financing from your financial institutions and see if the dealer can beat it.
There is no "getting to" the .9% rate unless it is an offered incentive on a model you are looking at for the term you are looking to finance.
DO UNDERSTAND SOMETHING:
Subvented interest rates may not be the best way to go, especially if you are putting down a substantial downpayment. You usually give up some if not all rebates to get the interest rate.
A 30,000 loan where you are putting down $5,000 and getting rebates of $5,000 and you are only financing for 36 months, may be a better deal total cost wise then a $5,000 down with taking .9% rate at 36 months.
Also, you stated you are looking to buy new and finance a $25,000 car loan and spend $30,000 on the car. remember to include taxes, title and fees (as well as rebates) into your expectations.
