Auto Financing Rates: Advice?

I'm looking to finance approximately $20,000 over 60 months for the purchase of a slightly used vehicle. The majority of the 'big banks' offer what appear to be extremely high financing rates. I'm purchasing the vehicle from a small volume used dealer which does not have a financing referral arm. I'm finding the larger volume dealers can secure lower interest rates for their customers.

I'd prefer a loan vs a line of credit and have looked at both scenarios already.

Any suggestions on where to get a low rate for a 60-month term?

Originally Posted by LondonKB

I'm looking to finance approximately $20,000 over 60 months for the purchase of a slightly used vehicle. The majority of the 'big banks' offer what appear to be extremely high financing rates. I'm purchasing the vehicle from a small volume used dealer which does not have a financing referral arm. I'm finding the larger volume dealers can secure lower interest rates for their customers.

I'd prefer a loan vs a line of credit and have looked at both scenarios already.

Any suggestions on where to get a low rate for a 60-month term?

If you are financing $20,000 taxes included, we can offer you as low as 8.59% over 60 months. Vehicle must be 2004 or newer and not branded, Taxi or commercial. PM me if you are interested.

Originally Posted by bizzmanager

If you are financing $20,000 taxes included, we can offer you as low as 8.59% over 60 months. Vehicle must be 2004 or newer and not branded, Taxi or commercial. PM me if you are interested.

wow that's pretty high...maybe ive been looking at mortgage rates too long.

Originally Posted by LondonKB

I'm looking to finance approximately $20,000 over 60 months for the purchase of a slightly used vehicle. The majority of the 'big banks' offer what appear to be extremely high financing rates. I'm purchasing the vehicle from a small volume used dealer which does not have a financing referral arm. I'm finding the larger volume dealers can secure lower interest rates for their customers.

I'd prefer a loan vs a line of credit and have looked at both scenarios already.

Any suggestions on where to get a low rate for a 60-month term?

If you own a house, you can use the property as collateral for a secured loan, even if you are still paying off the mortgage. The banks will usually give 80% of the equity in the house. The benefit is a low-interest LOC of prime+1 from most of the banks. You also get flexibility in how you pay it off. I was just at the bank and the Branch Manager mentioned that almost none of their credit products that they process recently are fixed loans due to the excellent interest rates.

Other than that, for 20k you could consider some of the auto manufacturer's for new vehicles such as Hyundai, Kia,Mazda even Honda who are offering excellent financing rates as low as 0% for 60 months.

Originally Posted by rems

wow that's pretty high...maybe ive been looking at mortgage rates too long.

no kidding. My insurnace company said if u are thinking about buying a new car make sure to ask us about our financing.
So I asked how much? They said 7.49%. ............. I don't think there are ANY manufacturers right now that are financing anywhere close to that high for new cars. Most are 0-3%.

Ouch!

Keep saving money or use your line of credit.
My unsecured line of credit is much much lower than 8.59%. You are better buying new for that rate.

just wondering if u finance a car can u write off the whole value or only the interest part for being self employed/business.

Originally Posted by 99rs

just wondering if u finance a car can u write off the whole value or only the interest part for being self employed/business.

i thought you can only write it off if it's leased.

Originally Posted by Vladimir

no kidding. My insurnace company said if u are thinking about buying a new car make sure to ask us about our financing.
So I asked how much? They said 7.49%. ............. I don't think there are ANY manufacturers right now that are financing anywhere close to that high for new cars. Most are 0-3%.

I went to Ford looking at a 09 Mustang and they wouldn't go below 7.9%. Walked out.

Talked to Dodge about a new Challenger and they were only offering 8%. Walked away from there too.

My line of credit is 5.5%. How can these guys justify their high rates?

Now I'm looking at Lancers, Jettas and Civics. At least they have competitive financing rates.

Originally Posted by rems

i thought you can only write it off if it's leased.

You can expense a financed car. It seems to be a combination of Interest and depreciation based on numbers available from rev can. Please note that you should speak to your accountant prior to buying so he may advise you of proper structure for maximum advantage.

And yes you can find lower interest rates by buying a new car. BUT, do you want to be the sucker paying 50%+ of the vehicles value in the first 3-4 years?
Furthermore you will find that most of the hottest selling vehicle models out there are not as deeply sub vented as others. These sub vented rates of 0-3% a just a buy down from the manufacturer to keep moving their metal.
Did you know you could also request your dealer to "Buy Down" your rate as part of your discount?. Theoretically he could get your rate down to 0%.

Originally Posted by rems

i thought you can only write it off if it's leased.

In a financed car, you can write off depreciation, where as a lease is an expense, almost like rent. I'm sure there are complication to write off depreciation, but it can be done.

Originally Posted by rems

i thought you can only write it off if it's leased.

No, you can also "write off" financed and owned vehicles as well. It would just be a different method (e.g., straight line depreciation, or based on mileage, etc)

Originally Posted by bizzmanager

And yes you can find lower interest rates by buying a new car. BUT, do you want to be the sucker paying 50%+ of the vehicles value in the first 3-4 years?
Furthermore you will find that most of the hottest selling vehicle models out there are not as deeply sub vented as others. These sub vented rates of 0-3% a just a buy down from the manufacturer to keep moving their metal.
Did you know you could also request your dealer to "Buy Down" your rate as part of your discount?. Theoretically he could get your rate down to 0%.

I was specifically looking for a used SUV for business purposes. I wanted a decently reliable 2-3 year old used car. However, going used, the financing rates were not that good (whether through the dealer or through the bank). And since I am putting 60k kms per year, I needed the mileage to be as low as possible to last at the very least, the financing period - 5 years. I found that although I wanted a used car, I opted for a new which was roughly the same price with 0% financing than with 4-6% used. In my case, I didn't care whether or not the car depreciated, because I essentially am buying a car and running it into the ground (approx 300,000 km in 5 years assuming 0 to start).

Originally Posted by Warwick

I went to Ford looking at a 09 Mustang and they wouldn't go below 7.9%. Walked out.

Keep in mind that dealerships have absolutely no control over financing rates on new vehicles. That is determined by the financing company (which is often a division of, or related to, the manufacturer).

So it's not a matter of them "not going below" any given rate, it's more that it's the rate that's offered right now and that's that.

Originally Posted by ES_Revenge

Keep in mind that dealerships have absolutely no control over financing rates on new vehicles. That is determined by the financing company (which is often a division of, or related to, the manufacturer).

So it's not a matter of them "not going below" any given rate, it's more that it's the rate that's offered right now and that's that.

I understand that and the salesman seemed honestly frustrated. But they have to do something about those rates, whether it's changing financing companies or browbeating the manufacturers. Right now they aren't even close to be being competitive with other brands. Ford lost a guaranteed sale from me simply because of their rates.