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    murmur's Avatar
    murmur Posts: 1, Reputation: 1
    New Member

    Mar 14, 2006, 09:19 PM
    Financing new car
    I'd appreciate if some one can answer my question.
    If I need to finance new car, can I do it with the bank other than dealer offers? Does it affect the price of the car if I will finance with some one else?
    RickJ's Avatar
    RickJ Posts: 7,762, Reputation: 864
    Uber Member

    Mar 15, 2006, 04:58 AM
    In short, Yes for sure to the first, and "sometimes" to the 2nd.

    The best way to go about it is to get their best price and their best financing offer, than call a couple banks to see if they can beat the financing end of it.

    It may help to call your own bank first for rates... but to do so they'll need the make, model and year of the vehicle you are considering.

    Good luck with it!
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692

    Mar 15, 2006, 05:50 AM
    First when car shoping, don't say where and how you are going to finance, work for first the best car price, check online, often you can find a new car from a dealer even in another state at a lower price than the one in your town. Also if you get a firm offer on a new car from a dealer like that, give you local dealer a chance to meet it. ( mine did not but is still required to do the warranty service, guess he did not think I would buy it like I did)

    Then after you get the very best car price, then shop ( you can have the bank rates pre-approved) the financing of it. Depending on your credit score what type of rate you can get, Dealerships often can get very good low rates for people with high credit score. But local banks often will give a good customer a very good rate also. If you are a member of a credit union they many times have some of the better rates.
    fredg's Avatar
    fredg Posts: 4,926, Reputation: 674
    Ultra Member

    Mar 15, 2006, 06:53 AM
    You have some good answers already. I would just like to add this about buying a new car. Are you looking to buy a "brand new" car? One that no one else has ever owned?
    You might consider that buying a "brand new" car, which I'll call a new car, results in losing a lot of money when you sign the dotted line; it can depreciate from approx. 3,000 to $5,000, just by you signing for it. That is lost money, because it is now a used car, and not worth what you paid for it.
    Approx. 75% of all cars sold in the US are sold as used cars, not brand new.
    Only about 25% of all cars sold are sold "new".
    Main reason is that you can buy a good used car, maybe 50,000 miles on it, and save a lot of money. If you buy a new one, depending on the cost, you could be paying on it for the next 5 years! After that time, you will never get back close to what you have had to pay out.
    Just something to think about.
    I do wish you the best.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man

    Mar 15, 2006, 07:32 AM
    While its true that a new car depreciates a huge amount when you drive it out of the dealer, this is not "lost money". Cars depreciate, that's a fact of life. Most people who purchase a car will hold it for a few years so the depreciation factor gets reduced over time. Cars are not like Real Estate. Anyone who expects to "get back close to what you have had to pay out" for a car is living a pipe dream. Depreciation should not be a major factor in the decision to buy a car. If depreciation is a concern, then one would be better leasing then buying. Or purchasing a car that has a higher resale value.

    Yes its true that one spends a lot less on a used car then a new one. And its also true that a used car might present a better value. But there are some advantages to purchasing new. I purchased 2 cars in 1999. One was a new Nissan Pathfinder, the other a used Pontiac Grand AM (45K miles). In the 5 years I owned both cars, the Pathfinder cost me $80 in repair costs. The only thing that went wrong was the climate control selector broke. During the same time, the Grand Am cost several thousand in repair costs. Probably not as much as the difference between new and used, but it certainly added to the cost of ownership.

    Fred's sales figures don't sound out of whack. Some people can afford to buy a new car every few years so that fuels the pre-owned market. So do rental fleets and leasing.

    Yes, a used car can save money and should be given consideration, but depreciation of a new car should not be a major factor. I would never advise anyone to consider depreciation as a primary factor in a car purchase decision. Resale value, yes, depreciation, no way.

    However, that wasn't your question (and really had nothing to do with your question so I'm not sure why it was posted).

    Rick and Chuck are correct that you do not have to finance through the dealer. But I would recommend shopping for financing BEFORE you go shopping for a car. You do not want to be put in the position of agreeing to purchase a car and then have to scramble for financing. Financing through the dealer will often affect the price because the dealers will get something back from the lender. But it will sometimes mean a higher interest rate or more fees.

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