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Which would be better dealer financing or outside?

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Regular Contributor

Which would be better dealer financing or outside?

Looking to by either new or 1- 2 year old Hynduai Santa Fe in the next 9-12 months or so. I have a 2008 sonata that I would trade and putting down 3-5k in addition. My scores are Ex 733 TU734 and EQ 740. FICO Auto at 733. Salary 35K and own my house outright no morgage. Wondering if outside financing would offer better rate or go with Hynduai? I have NO Baddies at all. My CC utilization is currently 37% but will have it down under 20% by the time Im ready to buy. Thanks for any help.

Message 1 of 12
11 REPLIES 11
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Community Leader
Super Contributor

Re: Which would be better dealer financing or outside?

Unless you plan to buy new and take advantage of their promotional rates. It would be best to seek outside financing IMO.


My most prized tradeline.
Message 2 of 12
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Regular Contributor

Re: Which would be better dealer financing or outside?

Get your UR to below 10% and then get financing from a Credit Union (DCU, PenFed, Navy Federal) once you have their approval go to the dealer and pick out your car with options etc and say hey can you beat 1.XX% sometimes and I do mean sometimes the dealer can beat CU financing by offering 0% or 0.9%...GOOD LUCK!!!


EX08 801 EQ08 812 TU08 805 Total Credit Line: $100K+
Message 3 of 12
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Moderator Emerita

Re: Which would be better dealer financing or outside?


@Gmood1 wrote:
Unless you plan to buy new and take advantage of their promotional rates. It would be best to seek outside financing IMO.

^^^this.  Those low promo rates mentioned in the prior post (0% and .9%) are for new vehicles only. Not for used.

Message 4 of 12
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Regular Contributor

Re: Which would be better dealer financing or outside?

The 3-5k is best used to pay down your dti, also I would try to private sell or have car max give you an appraisal(so you can have a back up place to get money for it if the dealer tries to lowball you badly on trade in) before going to the dealership.  I think its better to pay the small gap insurance fee than to put money down if you are ok with the payments.

Message 5 of 12
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Frequent Contributor

Re: Which would be better dealer financing or outside?

If you own the house out right have you considered equity loan? Rate maybe a Lil higher but if you itemize deductions you maybe able to take the interest deduction at end of each year
Amx BCE-25k,Amx Zync-NSPL
Barclay's Mastercard-13.5k
Credit Union Visa-1k
Discover-24k, Khols-2k
Message 6 of 12
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Contributor

Re: Which would be better dealer financing or outside?

After my experience with my new Sonata 3 weeks ago, I'd say it can work either way depending on the car and the incentives. I had a Capital One pre-approval for $17,000. With the $6000 I was ready to put down, I'd be driving the 2016 Kia Forte5 SX loaded that was my default car, assuming I'd have pulled a $23,000 out the door deal. I let them run  my credit - which turns out they ran through Ally, Chase, Road Loans and Hyundai. With applying the $2500 factory and $2000 Hyundai Finance incentives to the down payment, making it a $10,500 down payment, Hyundai Finance had no problem giving me the loan at 4.9% since that's a big dent in the equity. If I remained with Cap One and simply used the $2500 factory incentive towards the down payment, I'd probably have another $100+ on my payment or may not have been able to pull the deal off at all and went with the Forte5.

CH 7 Discharged 6/10/15
T/U - 643
EQ - 588
Ex - 647 as of 6/14/15
Message 7 of 12
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Established Contributor

Re: Which would be better dealer financing or outside?


@morlandoemtp wrote:

The 3-5k is best used to pay down your dti, also I would try to private sell or car max  your car before going to the dealership.  I think its better to pay the small gap insurance fee than to put money down if you are ok with the payments.


 Actually no, I wouldn't do this. Hyundai will give you a loyalty rebate if your are a current owner. Get max for your trade and get the rebate. Car Max low balls you...

Message 8 of 12
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Contributor

Re: Which would be better dealer financing or outside?


@Dj4Money wrote:

@morlandoemtp wrote:

The 3-5k is best used to pay down your dti, also I would try to private sell or car max  your car before going to the dealership.  I think its better to pay the small gap insurance fee than to put money down if you are ok with the payments.


 Actually no, I wouldn't do this. Hyundai will give you a loyalty rebate if your are a current owner. Get max for your trade and get the rebate. Car Max low balls you...


True. CarMax isn't going to give you any more than a "dealer" will give you on a trade. It's just quick and easy. A few months back, a friend was settling her mom's estate and asked if I/We'd like to buy her mom's car. A true "little old lady from Pasadena" deal lol. 2010 Honda Civic EX sedan with 26,000 miles for $10G between friends. Since I couldn't get financing for a private sale, she decided to go CarMax rather than deal with strangers coming to her house. CarMax gave her $9400ish which is within the KBB trade in range. A few weeks later with a fresh set of tires, I saw it on their site at $14,500 and it was gone within a couple of days.

CH 7 Discharged 6/10/15
T/U - 643
EQ - 588
Ex - 647 as of 6/14/15
Message 9 of 12
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Moderator Emerita

Re: Which would be better dealer financing or outside?

^^^See that isn't bad. I expect CarMax to make a profit on the deal and selling to them is easy. I have never purchased from them but have sold them a couple of older cars that my husband had forever.  It was easy money and I didn't have to worry about a private individual getting upset if the vehicle stopped running at some point in the future. There is always a cost to not having the liability associated with a private sale. In your example above she only took about $600 less than the deal you were making with her and she got her check immediately. Good deal all the way around IMO

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