Is it better to find financing through the dealer or own your own?

This isn't a Mazda specific question. I am just curious on the overall experience from the other people who who financed rather than paying in cash. I financed my current vehicle and left it in the hand of the dealer to find financing. At the time my credit wasn't too hot and I was naive and just accepted things as is and didn't really attempt to negotiate anything. It was a used car and was kind of a rushed thing because my previous vehicle had an engine block cracked (my step-sister drove the vehicle before me and didn't take care of it) and I needed transportation to get to and from work/college at the time.

I have read various forums where people say that you should try financing at local credit unions instead of the dealer. I am just curious to hear form actual people the pros and cons of financing at the dealer vs a local bank or credit union.

It's always best to arrange financing prior to buying so you know what's the best rate that you are eligible for and how much your estimated monthly payments will be. Then you also tell the salesman that fact so that eliminates any hopes that he can pull some sneaky deal with the finance manager. After we've agreed on a price then you ask him if he can give you a better finance rate than the new you already have arranged. If you do that,and he offers you a loan from some no-name bank, just make sure that you are getting a simple interest loan where the monthly payments are fixed and will not start low and then suddenly go up mysteriously. Also make sure that when you're haggling, make sure you're not haggling over the monthly payment but the final price of the car. There are plenty of online loan calculators that you can use to figure out what your monthly payments will be based on the price of the car and the interest rate. This was you know ahead of time what numbers that you can afford.

^^^I agree. Get financed through a local credit union. You'll have the details easily laid out ($300/mon @ 1.9% for 60 months) to easily compare against what the dealer will offer. Watch the total financed number as they may add other charges to it. You need to have other options ready when striking your deal. On my purchase I got 1.9% through the credit union. Mazda could only do 3.9%. Also some dealers may say they work with your CU but it's still best to go to the office separately to work out your terms.

hooked said:

It's always best to arrange financing prior to buying so you know what's the best rate that you are eligible for and how much your estimated monthly payments will be. Then you also tell the salesman that fact so that eliminates any hopes that he can pull some sneaky deal with the finance manager. After we've agreed on a price then you ask him if he can give you a better finance rate than the new you already have arranged. If you do that,and he offers you a loan from some no-name bank, just make sure that you are getting a simple interest loan where the monthly payments are fixed and will not start low and then suddenly go up mysteriously. Also make sure that when you're haggling, make sure you're not haggling over the monthly payment but the final price of the car. There are plenty of online loan calculators that you can use to figure out what your monthly payments will be based on the price of the car and the interest rate. This was you know ahead of time what numbers that you can afford.

Click to expand...

Agree. Watch out before you sign the papers. They may try to sell you extended warranties, gap insurance, wheel/tire protection insurance, etc.. These items IMO are not necessary and will raise your monthly payments.

Exactly like hooked says, very good advice.

I went to PNC Bank at the time and I was approved for the lowest rate which was something like 2.59%. I went in with check from PNC in hand and when I got there and getting ready to buy the salesman asked how I would handle the finance. I said I have a check ready, he asked the rate the bak gave me I said 2.19 (maybe I should have said 1.5 but they're not dumb lol ) he said we can probably do better and they did. Got a 1.9% rate through Chase who is partners with Mazda or that delarship I guess. .6 % less, not that it made a huge difference but whatever, it helped.

Gio26NJ said:

Exactly like hooked says, very good advice.

I went to PNC Bank at the time and I was approved for the lowest rate which was something like 2.59%. I went in with check from PNC in hand and when I got there and getting ready to buy the salesman asked how I would handle the finance. I said I have a check ready, he asked the rate the bak gave me I said 2.19 (maybe I should have said 1.5 but they're not dumb lol ) he said we can probably do better and they did. Got a 1.9% rate through Chase who is partners with Mazda or that delarship I guess. .6 % less, not that it made a huge difference but whatever, it helped.

Click to expand...

That's a good rate. And that 0.6% rate reduction helps. Good move.

Thanks guys for the advice. I currently bank with Chase and they offer some great rates for checking account holders that compare pretty well to what the credit unions are saying they can offer. I will be smart and shop around (I have read that if you have a lot of credit inquires during a short period of time while shopping for a loan it doesn't look as bad on the credit report as all the inquiries are in a short amount of time).

Also my thought on gap insurance will depend on how much I am able to put down. If I can put down 20% as planned then I would think gap may not be necessary, but if I put down less than 20% I would think I should probably get it. But it looks like I can get it from my insurance agent so I would probably go that route.

As for extended warranty, it is my understand this item can be purchased anytime before the regular warranty expires. Obviously we have no idea what things can go wrong on a a vehicle so it is tempting to get the coverage but it will all depend on the actual cost and what the fine print says. I put a lot of miles on my cars, on average around 18,000 a year.

Go to bankrate.com and search by your ZIP code to see who has the best rate.

http://www.bankrate.com/auto.aspx