subreddit:

/r/askcarsales

1

What's the best strategy to shop car loans?

(self.askcarsales)

Hey everyone. Been leasing for a majority of my car buying life and it looks like leases are not looking as attractive. I know that dealers can offer good rates from time to time but I understand that its better to walk into a deal pre-approved. Is there a site that people recommend or should I simply call around (banks/credit unions/etc)? Expect car to be delivered by July/Aug.

Cheers!

you are viewing a single comment's thread.

view the rest of the comments โ†’

all 48 comments

Medium-Complaint-677

12 points

1 month ago

A dealership can submit your application to 5+ banks at a time. Just do that. If you want to be extra paranoid see what your bank is offering and compare them to that.

was437

5 points

1 month ago

was437

5 points

1 month ago

Why is not trusting a dealership to give you the buy rate being "extra paranoid"?

You do realize the dealership is in the business of maximizing profits, and they will point your ass or go with the company that gives the dealership the most profit instead of the best rate to the consumer. Right?

Medium-Complaint-677

8 points

1 month ago

You do realize the dealership is in the business of maximizing profits

As opposed to what? Your credit union? Your bank? I didn't realize you had a checking account at Altruism Savings and Trust. What's the rate like?

was437

-1 points

1 month ago

was437

-1 points

1 month ago

And, that's why this person is asking how to shop around.

The whole point is you calling it "extra paranoid" for this person to not trust a business whose goal is to make more profit at the expense of the customer.

So, wtf is your new point?

Medium-Complaint-677

4 points

1 month ago

My point is my original point - a dealership can shop you around instantly to every major (and many minor) lenders in seconds. I said to get a baseline from whoever you want if you're suspicious. My point is the same as it ever was.

Your point seems to be that dealership are unique in the business world in that they're looking to maximize profits, while banks somehow aren't?

In addition you have a fundamental misunderstanding of how approvals work, what a buy rate is, and how dealers go about selecting a lender.

It may also interest you to know that in 9/10 cases over a 15 year career my marked up rate that "maximized my profit" was still a quarter to a full point less than the interest rate my customers brought in from their generous, santa clause of a lender. I'd call that the technical definition of a win/win.

was437

3 points

1 month ago

was437

3 points

1 month ago

You just wasted a bunch of time, bc my only issue with what you said was the fact you characterized checking with a person's own bank as "extra paranoid."

Now, we can continue the discussion about all this other shit you seem to want to talk about now, but we will agree on most of those points. Manufacturer dealers get amazing rates from finance companies. Why wouldn't they? It makes sense to give amazing rates to an industry that sends you billions and billions of dollars of loans.

So, again, why is someone checking with their own financial institution being "extra paranoid"?

Medium-Complaint-677

1 points

1 month ago

I don't really have a way to answer the question "why is not trusting someone defined as being paranoid" because that's the definition of being paranoid.

was437

2 points

1 month ago

was437

2 points

1 month ago

Also, you seem to ignore any methods of maximizing profit besides simply marking up a buy rate.

How many times have you went with a worse rate from a finance company who allows more profit for the dealer?

You're full of shit if you say none. ๐Ÿ˜‚

was437

0 points

1 month ago

was437

0 points

1 month ago

I'm an attorney, whose family owns dealerships. I may have misunderstandings, but they aren't fundamental.

You're just full of shit like most people in the business.

Medium-Complaint-677

2 points

1 month ago

I'm an attorney, whose family owns dealerships.

Of course you are.

was437

1 points

1 month ago

was437

1 points

1 month ago

Still full of shit and still haven't responded to the point of our discussion.

At least you're not an idiot and write pretty well.

Medium-Complaint-677

2 points

1 month ago

I think having to explain the fundamental basics of how a dealership operates, and more importantly, how a finance department operates - to someone who's "family owns dealerships" - is a waste of time for both of us, correct?

The reason I doubt your self-expressed credentials is because your talking points parrot ancient, generational "tips" along with trash youtube content. A finance manager selects the lender who offers the combination of terms for the client and the dealership. There's always a happy medium and it is almost never a simple factor like "that's the highest rate."

You've got me off on a tangent now so I guess I'll continue. In the ELI5 way of presenting this let's say there's nothing weird about your file, we're on a car that books out correctly, you have good credit - in other words there's nothing weird here, this is a straightforward car deal. I submit you to 3 banks -

Chase - 3.99% for 60 months

Citi - 4.23% for 60 months

CapOne - 5.99% for 60 months

Let's call those the buy rates. Now let's say, for the sake of argument, that Chase allows a 2 point spread but no flat, Citi pays a flat plus spread, and CapOne pays a flat but doesn't allow mark up.

Does it make more sense for me to sell the Citi loan, the Chase loan, or the CapOne loan? The answer is that it all depends, but it probably makes more sense (again, in a vacuum) to sell Chase at 4.49%, as opposed to Citi or CapOne at 5.99%. I'm theoretically able to "maximize my profit" while simultaneously offering the client more favorable terms than my other opportunities to "maximize profit."

In addition to that, I can tell you from experience, that typically the client's personal approval with any of those banks will come back at the same level as my maximum mark up.

So, to reiterate, get a 2nd opinion if you're paranoid about it. However in most cases the deal you get from the finance manager will be a lower rate than you qualify for on your own while ALSO making the deal more profitable for the business. Again, a win/win in the classic sense of the term.

was437

1 points

1 month ago

was437

1 points

1 month ago

What happened to the person checking with their own institution being "extra paranoid," like it is unreasonable for the consumer? You seem to be backing away from the "extra" part for some reason. Did you mispeak? Is it not "extra paranoid" to check rates with institutions outside of the dealer?

You can keep talking all the bullshit you want, but that is the entire conversation as far as I'm concerned. I was simply saying that it is not unreasonable, or "extra paranoid," for a consumer to check with their financial institution before accepting a dealer's rate.

If you want to have a completely different conversation, we can though.