why do they do it?

[babbles]

Went to honda yesterday to buy a car,

With an  EQ score of 773, why would finance tell me that 5.49% @72 month was the best rate through BOA?  But then again, my DTI was a little high.  Stupid me didn't think to check USAA till after he ran the pulls tto find that USAA offers  between 3.49%-3.75% on 72 months.  First light tomorrow I will be on USAA but will require an additional hit.  Then he tried to add in $545 in "optional gap"  to be financed.  Why do these guys do it?  USAA offers  gap at a flat $249.

[Anonymous]

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@babbles wrote:

Went to honda yesterday to buy a car,

@With an  EQ score of 773, why would finance tell me that 5.49% @Anonymous month was the best rate through BOA?  But then again, my DTI was a little high.  Stupid me didn't think to check USAA till after he ran the pulls tto find that USAA offers  between 3.49%-3.75% on 72 months.  First light tomorrow I will be on USAA but will require an additional hit.  Then he tried to add in $545 in "optional gap"  to be financed.  Why do these guys do it?  USAA offers  gap at a flat $249.

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@Anonymous score is certainly good enough for great rates.  Mine is slightly lower and I was able to get 3.49 for 60 months fully finnanced with no gap coverage.  I took an approval from my CU @ 3.75 with me to the dealer and asked if they can do better, after a while the dealer was able to get Wells Fargo with the rate mentioned above.  You may want to do something similar.

With regards to additional hit, my understanding is the multiple HPs within a week(?) for auto loan will be considered a single inquiry for FICO scoring purposes.

[babbles]

Fr

[Anonymous]

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pakman92 wrote

With regards to additional hit, my understanding is the multiple HPs within a week(?) for auto loan will be considered a single inquiry for FICO scoring purposes.

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This

[pizzadude]

Dealers make money both on the sales price of the car and the interest rate of the financing.   Also they get incentives to push extras like GAP.  

If they can get you to agree to a higher interest rate than you normally would qualify for then they will add extra profit to the deal.

I always recommend getting pre~approved at a bank or CU first, then letting the dealer try to beat your rate.

[babbles]

Thanks for that explanation, silly me for not doing the right thing.   So all that BS about how good my score was he was still trying to make money anway.  He was a little disappointed when I had him to re-do the contract without the $545 gap.  Payments dropped about $11.  Tomorrow I will ask USAA to raise my aproval limit by 5k.  

[pizzadude]

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@babbles wrote:

Thanks for that explanation, silly me for not doing the right thing.   So all that BS about how good my score was he was still trying to make money anway.  He was a little disappointed when I had him to re-do the contract without the $545 gap.  Payments dropped about $11.  Tomorrow I will ask USAA to raise my aproval limit by 5k.  

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Well don't feel too bad, most of us have learned the hard way with past car buying experiences ~ I certainly have.

GAP and Add on warranties are big commision items so they are always pushed.

And yeah they were probably trying to make you feel good about paying a higher rate, it's their job to sell cars and make money. 

[LS2982]

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@pizzadude wrote:

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@babbles wrote:

Thanks for that explanation, silly me for not doing the right thing.   So all that BS about how good my score was he was still trying to make money anway.  He was a little disappointed when I had him to re-do the contract without the $545 gap.  Payments dropped about $11.  Tomorrow I will ask USAA to raise my aproval limit by 5k.  

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Well don't feel too bad, most of us have learned the hard way with past car buying experiences ~ I certainly have.

GAP and Add on warranties are big commision items so they are always pushed.

And yeah they were probably trying to make you feel good about paying a higher rate, it's their job to sell cars and make money. 

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I'm guilty!! Right here!!! And I kick myself all the time for it but I love my truck!!!