dealership relationship with bank

[Anonymous]

Hey all,

I was told that my preferred dealership has a relationship with my CU and it is true. They market it everywhere and my fiance has went through the same dealership and bank.

Is it worth going to my CU to get preapproved before going to the dealership?  They say they can get me a better rate throug my CU by going through them.  Does this make any sense or is it a trap?

I have 10,300 on my vehicle and trade in value is around 8,000 at dealership.  So im upside down about $2,300. The reason I'm upside down is because of insurance premiums tacked on when I was stupid 23 yr old and lost my job.  I've sent a GW letter to my auto loan holder (small bank back home) for some reduction in fees.  Of course being 23 my interest rate is 11%.  I want to get out of the vehicle and into something cheaper. I'm looking at 2012- 2013 Nissan frontiers with advertised prices of 15k- 18k.

 Assuming I don't get anywhere with the GW letter. What would be the best approach at achieving my goals?  

TU:650  Bank pulls TU  Ideally looking at no more than $300 a month to free up about $135 a month from the current auto loan.

Gladly accept opinions and advice.

William

[sccredit]

This is you BEST CASE scenario, based on your numbers:

Purchase price (assuming lowest):             $15,000

Trade In ($8,000-$10,300)                            $2,300

Sales Tax on $15k (based on 8%)              $1,200

Licenses, Etc                                                   $300

Down Payment                                               $0

Total Financed                                                $18,800

Interest Rate   (based on 650 FICO)           7%

Term (based on age of vehicle)                   5 Years           

Payment                                                            $372.26

[marty56]

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@Anonymous wrote:

I was told that my preferred dealership has a relationship with my CU and it is true. They market it everywhere and my fiance has went through the same dealership and bank.

Is it worth going to my CU to get preapproved before going to the dealership?  They say they can get me a better rate throug my CU by going through them.  Does this make any sense or is it a trap?

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I just pruchased a new car yesterday and they financed the car through my CU.  As lonmg as they offer you the same rate or better as your CU, I don't see any issue in doing that.  I liked the fact that the did it through my bank since my CU was most likely the best rate anyway.

I suck and negotiating when buying car but IMHO the dealer gets something from the bank in going through them so you could have taken a shot in asking for a better price in going through someone you most likely would have gone through anyway.  When DW got her truck a few years ago, we got a pre-approval from our CU and the dealer offered the same rate and free service for 2 extra years to go through the Toyota finance so you never know.

[Anonymous]

Good point.  Ive made up my mind. I'll get preapproval from my CU first