I’ve been reading through this post, and I see a few critical errors here.ġ) Not knowing the interest rate. Not to mention, a cluster of pulls within a relatively short period of time (within a few days or so) is not weighted very heavily, because they know the person is likely looking to make a large purchase that involves credit. It’s totally up to you, but having worked for five years as a used car salesman after college (for Enterprise), I can say that people who are preapproved at credit union always came out significantly ahead versus people who got approved in-house.Īs far as not wanting to get a preapproval at the credit union because it might ‘ding your credit score’, this is why you have a good credit score in the first place. You’re going to get hosed, it’s going to be for years and years… where is if you go to a credit union you’ll likely get a fair rate and be able to negotiate the actual price of the vehicle instead of your monthly payment. It might mean that you miss out on this car, but financing on a used vehicle from the dealership based on monthly payment is nuts. I personally would try another credit union. Any dealership can lower your monthly payment by simply extending the life of the loan. Side note: As noted below, always calculate and negotiate based on the actual price and actual interest rate. However, credit unions can potentially beat that, if you’re willing to be patient. Rerun the numbers if my estimates were off, but 6.1% is not terrible compared to averages. I came out with an interest rate of approximately 6.1%. Your effective interest rate can be calculated by: So if they’re estimating ~$401 per month for 72 months, that’s a total of $28,872. $5k down means you are financing ~$20,200. If the car is $24k, it will likely be around $25,200 with sales tax (depends where you live).
![dcu loan calculator dcu loan calculator](https://www.xltemplates.org/wp-content/uploads/2019/04/Mortgage-loan-calculator.png)
Run the math a little bit and estimate the interest rate. Going forward I'll be looking into other paths that may involve saving up more for the downpayment, using a credit union for a loan, and lowering my standards on the car I choose - or any combo of those three.
![dcu loan calculator dcu loan calculator](https://www.dcu.org/images/new-loan-status.jpg)
I've got some good advice here, and I'm thankful for it! Excellent credit.ĮTA: Through the course of the conversation below, I've concluded that the strategy I was considering (above) is in fact one of the stupidest ways to go about this, and I'm going to look into other options. Would like to hear about what mistakes I may be making with my proposed strategy, or what other options I should be considering.Ĭontext: Salary 87k, I own a house with payments (mortgage, condo fee and utilities) adding up to about $1900 a month. The days when these kinds of deals were possible are over, and I'm also at a point where I need a more reliable vehicle.) (My last one bought for 8k, and the one before I bought from my sister for 3k. In the past I've always bought cheap used cars outright for cash. (\ETA: This is not a brand-new car but a dealer-certified 2021 with 16k miles*)īUT: I am completely new to the world of car loans, and frankly ignorant.
![dcu loan calculator dcu loan calculator](https://images.sampletemplates.com/wp-content/uploads/2017/02/19021450/Free-Automotive-Bill-of-Sale-Sample.jpg)
![dcu loan calculator dcu loan calculator](https://windows-cdn.softpedia.com/screenshots/Car-Loan-Calculator-by-Media-Freeware_1.png)
Whenever I have extra cash I plan to dump it toward the car loan, hopefully reducing the length of the loan significantly. I was going to go with a 72-month loan from the dealer, making my monthly payments around $360. I'm about to buy a car for about $24k, and I only have about 6k that's liquid and available for the down payment. Here, please treat others with respect, stay on-topic, and avoid self-promotion.Īlways do your own research before acting on any information or advice that you read on Reddit. Get your financial house in order, learn how to better manage your money, and invest for your future. Banking Megathread: FDIC, NCUA, and your cash.Private communication is not safe on Reddit. Scam alert: Ignore any private messages or chat requests.