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post #1 of 13 Old 10-15-2008, 05:54 PM Thread Starter
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Question about loan years

Hi,

It's been about ten years since I bought a new car (it was my '99 Firebird). What's the max amount of years dealers will do for new cars these days. 5, 6 or 7 years. Does this differ from dealer to dealer?

Sean
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post #2 of 13 Old 10-15-2008, 06:08 PM
 
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Hi,

It's been about ten years since I bought a new car (it was my '99 Firebird). What's the max amount of years dealers will do for new cars these days. 5, 6 or 7 years. Does this differ from dealer to dealer?

Sean
It differs from bank to bank. Normally the max is 72 months but I have seen a few higher than that (about two 84 month loans and even one 96 month one )
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post #3 of 13 Old 10-15-2008, 06:14 PM Thread Starter
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It differs from bank to bank. Normally the max is 72 months but I have seen a few higher than that (about two 84 month loans and even one 96 month one )
Can I asume that the better your credit, the more years you can get. Or does that not play into it at all.
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post #4 of 13 Old 10-15-2008, 06:22 PM
 
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Can I asume that the better your credit, the more years you can get. Or does that not play into it at all.
Yes, the better your credit then the longer the banks will let you finance for. Just remember too tough that the longer you finance then the higher the interest rate will be as well.
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post #5 of 13 Old 10-15-2008, 06:37 PM
 
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Hi,

It's been about ten years since I bought a new car (it was my '99 Firebird). What's the max amount of years dealers will do for new cars these days. 5, 6 or 7 years. Does this differ from dealer to dealer?

Sean
Auto loans were never my specialty, but from what I understand, each dealership has the ability to get financing through whichever financial institution(s) offer them the best kickbacks. The dealership my brother works for gets their financing through three different sources, so not only does it vary from dealership to dealership, it may very well vary within the dealership. FYI, GMAC has limited contracts to people with FICOs of 700+.

In response to the other questions in the thread, the term, or number of years of scheduled payments for the loan, can be dependent upon your credit score. Typically higher risk loans are given mandatory shorter terms, but in this market, many lenders are restricting nearly everyone to shorter terms. Personally, I'd prefer the shortest term I could afford for two reasons: dealerships tend to weigh down the front end of car loans, meaning you are paying mainly interest in the beginning (and I want to start paying down the principle ASAP) and secondly, the longer the term, the more interest you are being charged.
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post #6 of 13 Old 10-15-2008, 07:05 PM Thread Starter
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Auto loans were never my specialty, but from what I understand, each dealership has the ability to get financing through whichever financial institution(s) offer them the best kickbacks. The dealership my brother works for gets their financing through three different sources, so not only does it vary from dealership to dealership, it may very well vary within the dealership. FYI, GMAC has limited contracts to people with FICOs of 700+.

In response to the other questions in the thread, the term, or number of years of scheduled payments for the loan, can be dependent upon your credit score. Typically higher risk loans are given mandatory shorter terms, but in this market, many lenders are restricting nearly everyone to shorter terms. Personally, I'd prefer the shortest term I could afford for two reasons: dealerships tend to weigh down the front end of car loans, meaning you are paying mainly interest in the beginning (and I want to start paying down the principle ASAP) and secondly, the longer the term, the more interest you are being charged.
So in the longrun, are you better off getting a loan on your own befor you even walk into a dealership?
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post #7 of 13 Old 10-15-2008, 07:44 PM
 
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So in the longrun, are you better off getting a loan on your own befor you even walk into a dealership?
Not always, sometimes their incentives are such that they outweigh the negatives. I would prefer to have a ballpark idea of whats out there before going into the dealership, to allow for more effective negotiations. Its really important to shop around at any point, especially in such a volatile credit market. The big advantage is its a new car, the interest rates and terms are typically better for new cars.

I'm going to guess that by the time financing needs to be done for these Camaros, GMAC and other lenders will be involved in this bailout and will be in a better strategic position to offer good auto loans. Lending wise, things usually look brighter after the holiday season, so hopefully you find a great deal!

p.s. As a general rule, if you have anything ugly on your credit, its best to get it resolved with at least a 60 day cycle buffer before you take out any credit.
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post #8 of 13 Old 10-15-2008, 08:48 PM
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So in the longrun, are you better off getting a loan on your own befor you even walk into a dealership?
It is to your advantage to pursue "outside" financing just so you can compare apples to apples when walking into the dealership. Chances are the dealer will actually be able to get you comparable, sometimes better, financing. When I bought my 04 GTO, I could have beat the best of the interest rates offered from the dealer (GMAC) but there was an additional $1500 credit for financing through GMAC. It actually saved me roughly $500 over the course of the loan going through GMAC but I wouldn't have known that had I not done other research prior to walking in the door; and 500 bucks is 500 bucks...
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post #9 of 13 Old 10-15-2008, 11:33 PM
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So in the longrun, are you better off getting a loan on your own befor you even walk into a dealership?
I say it is a huge benefit to have a loan lined up from an outside source. This way you force the dealer to talk loan terms and not monthly payment. Also you come in with a minimum requirement that the dealer needs to match.

Just because you have the loan lined up doesn't mean you have to use it. When I bought my VW Golf TDI 3 years ago as a daily driver I went in with a loan lined up. The dealer tried to match it, even tried some other minor incentives but they didn't.
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post #10 of 13 Old 10-16-2008, 01:42 PM
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better yet, pay cash and save the finance charges.

another point that i don't know if it's been mentioned: since the financial meltdown of the credit markets, it might be difficult (tongue in cheek) to get a loan if your credit history is less than stellar.

there does seem to be more loan activity with the smaller banks: a local or a regional bank has less, if any, exposure to the subprime mess and thus, will be better equipped to make auto loans.

one last point: the last i heard on cnbc was that gm was telling their co-owned dealerships to find their own sources of lending since gm's line of credit has ceased to exist....


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