S4iscool

My friend is getting a new bettle, and the dealer has offered her the following: (ive never financed a car so Im not too sure about this stuff...plus I zoned out during interest lectures)

Her:
21 years old
int. grad student
no job
good credit

The dealer offered her a 14.25% rate on a $19,000 beetle (pretax, $20000 after tax) with $3000 downpayment. The monthly rate will be approx $350-$380. They mentioned it would be "accrued daily?" not sure what that meant.

Does she have any room to negotiate on the rate or any other parts of the loan? Its through Ford Credit, and they claim that is actually a good deal for someone with her status.

anyone have some ideas or advice? any hidden tricks or costs to check?

Thanks

TTeetsil

is hiway robbery! Any credit union on any street corner is handing out 7.5 % and better interest rates with good credit. A loan officer would want to know how she intends to make the payments with NO job...minor details. Don't sweat the small stuff, eh. Grantt Bennett

HACK THS

I got 8.5 with no credit and a good job

tt-3

or try getting a loan online. They Fedex you a blank check & some paper work for the finance department. 14.25 is way high. Do they at least kiss ya before they bend ya over ;-p Maybe its because she a foreigner? Dunno.. try online. Your friend can do lots better... I got mine from lendingtree.com 6%
Accruing on a daily basis is how they rack up/figure the interest you owe, based on your daily loan balance.... i think ;-)

btw.. did she see the new Bettle convertible?
vwvortex.com

S4iscool

but you have a good job thats why they are saying its a good deal with no job.

TwisTTer

1. She has graduated...Most dealerships have programs where they help college grads get into a car with no money down and very low interest rate.
Some even offer college grad rebates.

2. Interest rates are very low. 14.25% is really outrageous.

Shop around through the net first.
<A HREF="http://www.edmunds.com">Edmunds.com</A> is a good place to start. Get bids from different dealers. When you find the best 3 try to negotiate prices down further. Then Go to <A HREF="http://www.bankrate.com">Bankrate.com</A> and check current interest rates. Then discuss financing or leasing AFTER you have agreed on a price. Then use each dealers offer against the other until one buckles to what you want. If you want more info on car shopping go to this link <a Href="http://www.fool.com/car/Buyingacar.htm?ref=PFinAg">Motley Fool</A>.

3. We are at the end of the year, dealerships want to move 2002 inventory and bring 2003's. No reason to even think twice about it.

4. If she really doesn't want to get ripped off, she may need a co-signer to help get a reasonable deal.

Hope this helps :-)

RoninTT

I got turned down by one bank, another took 3 days to get back to me (needed an answer that day), and finally got approved for one at First Union. I just graduated (bachelors) in May and started a job shortly therafter. If your friend has a lot of non-secured debt(Credit Card, Personal Loan, Student Loan) it will bring her credit rating down (or so the loan specialist at the bank told me). I think your friend should shop around for a (I assume New) car loan at various banks. Even if she doesn't have outstanding credit she should be able to get a much better rate than 14 % on a new car...But then again the banks might see not having a job as a major liability...

Accrued daily means that the interest on the principle (total loan ammount) is calculated daily and then summed to determine the ammount of principle paid off on that month's payment.

loan amount remaining = (principle before payment)-((total payment)-(interest accrued daily for that month)).

I don't think this has much affect on the total paid at the end of the loan though, unless you want to make two payment per month (in which case you would be better off with interest accrued monthly or weekly.) I am not a loan expert so I might be wrong about some or all of this and it's 1:30 AM so this might not make any sense in the morning...

TwisTTer

Finance companies use more than just credit rating and job to assess what interest rate they will charge to an individual.

They look at home ownership, length of residency in one location for past couple years, Income, income to debt ratio, # number of years at current job.

So this interest rate may be warranted based on the info that was given about her.

The best thing to do is shop around and see if one can get comparative or better deals.

RockeTT City

I made mine 3 weeks ago http://www.myfico.com/. They have a $12 deal that give you the credit story and the FICO score.
The FICO score is that what creditors use to base the interest. If you have more than 700 points, you will get under 6%, if not look at the table they have in the same myFico place for car loans. Those are averages, but very close to real life. They also have emulators to adjust to your personal situation.
It,s very important go to the dealer with the FICO score in mind, because is the way to defend yourself agains thefts like those that want a 14% for your friend. You can answer back and say you have such score and your average shuld be far less.

I got my TT a couple weeks ago, and thanks to this, and a little bit of whining they drop me from 6.5% to 4.9 (48Mo).

Rick.<ul><li><a href="http://www.myfico.com/">http://www.myfico.com/</a</li></ul>

ctmooregottapee

in general, in dealer financing is always MORE expensive than outside lenders, unless they are running a 'true' special like the GM 0% interest offers. this applies to all business models as the local dealer/salesperson is not added to the mix and taking their cut

intl grad?? if she is a foreigner, her creidt is not considered good as she has a short history

the rate you were offered sounds extremely high regardless. I would guess the salesperon figured they could take you on such a high rate


the BEST way to know anything is to always try it more than once. go back to the dealer, pretend its the first time, and try again with a different sales rep (go at a different time frame so the original guy isn't around) you'll probably be shocked to see the numbers are different. go back several times and play different roles, like pretend to be stupid, and then pretend to know everything to see how their treatment changes

you can always get a second opinion at another dealer too