@CreditCrusader wrote:This is actually a strong argument for securing financing approval before even walking into the dealership. I don't think there is a worse auto finance decision one can make than relying on a dealership to secure your financing.
Yes, they have SOME pull, but they also LOVE to rapid fire your credit app to anyone who will take it. I don't care how many people try to tell me that "they all count as one". Those pulls still all show...and not all credit evaluators view those INQs in such a fashion.
Plus, far too many auto dealerships try to match your financing with the monthly payment you seek...interest rate and total interest paid be darned. A friend and former roommate of mine made that mistake. To make the monthly payment "fit", they hit him with a 96-month term.
Last year, one of my kids did the pre-approval app through Capital One Auto Finance. We walked into the dealership with the approval amount in hand...interest rate and all. At that point, it was about negotiating the price on the trusk she wanted. They tried to tie together the vehicle with the financing, but we told them we were simply interested in agreeing on a purchase price.
Both sides did...and when they wanted to (again) talk about THEIR financing options, we whipped out the COAF pre-approval sheet and the matter was closed...no money down...and on HER terms.
YMMV on all this, of course. Just my two cents...
I've never negotiated a vehicle based on payment and I've never entered a dealership with financing in place in advance. I've also never had my app shotgunned to multiple lenders (although for my most recent loan the dealer did shop me to the captive lender and one local bank, supposedly because Chase did not respond quickly enough). I know my credit score and income should support Tier 1 with pretty much any captive finance company for the vehicles/price range I'd be shopping for, and I know what the incentivized rate is before shopping - I let the dealership know that I will only accept that rate or I'll secure my own financing.
My take is to know exactly what you should pay for the vehicle, what you trade is valued at (if applicable), and what a reasonable rate would be from your CU/bank as well as the best rate the captive lender is offering (if applicable). As long as the dealership can meet or beat all of those numbers, they've got a deal. If not, shop elsewhere.