Overhaulin'

Is getting a loan from a bank to buy a car "cash" from a dealer a good idea???

My family an I need a car but we can not afford to pay a big monthly payments. I am a stay home mom and we are living under my husbands income that is fair but not enough. My husband suggested that maybe it would be better to get a bank loan maybe it would be a less monthly payment. Pros and Cons please Or a better Idea would be appreciated...

Public Comments

1. That's basically how everyone does it. Getting your financing from the dealer will cost you more. Always shop for your loan outside of the dealer network. walk into the dealer with a check from the bank to pay off the car in full. But always get pre-approved first. Go to the bank and they will approve your loan. Tell you how much you can borrow and tell you what the payment will be. Then go shopping within your pre-determined budget.
2. Some people say that if you have a wad of cash, dealers will negotiate more. I've never put this to test though. Usually banks put specifics on auto loans though. For ex, they'll say it has to be at least an '03 with less than "x amount of miles" and then we will allow you this much money to buy it. My friend bought a car like that a couple of years ago.
3. I'm not quite sure of your question, but I think you're asking if it is better to get a bank loan or finance through a dealer and his finance company. The answer is: it depends. Dealers use the finance companies associated with the car manufacturer. Ford Motor Credit, GMAC, American Honda Finance are examples. They frequently offer special promotional loan rates that banks and loan companies can't match. So, if you know you're getting a special rate on the car you're interested in, don't bother with banks. However, if you are not getting a promotional rate, shop at banks and credit unions, and get preapproved for a loan. Then, when you go to your dealer, if he can't beat the bank's rate, go with the bank, where you've already been approved. One suggestion, you should know your credit score before you go shopping for a loan or apply at a dealer. Otherwise you may be surprised to get turned down or be required to pay a high rate. Here's an article with more details: http://www.leaseguide.com/Articles/creditscore.htm If you are asking if you get a better price from a dealer if you borrow from a bank and pay cash, the answer is no. Actually dealers prefer that you finance through them because they get a commission kickback from the finance company. .
4. If you have a bank willing to give you a vehicle loan at a "LOWER" rate take it. It is not actually "cash". What you do is get pre-approved by the bank and the dealership will speak directly to the bank and set up payment. Now you can get pre-approved by the bank and still have the dealership shop your credit around and see what interest rate they can get you. it all comes down to what you can fit into your monthly budget. And FYI... when the dealership shops you around, all they are doing is contacting banks on your behalf. If you have a good history and are in good standing with your bank, they will be more likely to give you a good rate. GOOD LUCK!
5. the best thing to do is get a loan first. if youre a member of navy federal credit union, you can get a pre approva auto loan at a very low interst rate,and finance the loan for up to 72 months. a open check is always welcome at a dealership, its less hassel than us getting you financed,its right-now money. and it gives you more negotiating power. make sure you take your husband with you, so you wont be intimidated by the sales person.
6. A loan is a loan is a loan is a loan. Unless you are taking money out of your savings account, you are not a cash buyer. Pros: Your banks rate may be lower than that of the dealership source(s). Walking in pre-approved eliminates the stress of what happens after you have selected a vehicle. Cons: The rate might be higher. You still have a monthly payment. Suggestion: Shop your local banks then compare it to the rates the dealership offers.
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