Loans

[chorky]

So I was planning on doing a nice down payment and just going through the dealers many options of loan companies to see who offers better rates. However, since the Jeep is still in the order process and possibly 2-3 months out from arrival and delivery I am wondering about independent loans.

My bank offers auto loans, and so do many - so there's options. What I am curious about is how it works. I have never done a loan like that before. If one applies, agrees to the terms does that lender just cut you a check so that you can cut a check to Jeep and pay for the vehicle outright? Or is it more complicated than that? Inquiring minds want to know.

This question spurs from the known interest rate hikes coming soon. It was already in my budget to buy a vehicle - however that was at the known lower interest rates ranging from 2 to 3.5% depending.. Now that rates could spike over 4% or even higher, it changes the budget - so I am just wondering getting my own loan is a better way to go - but not really sure how that all works.

Thanks ahead for the info..

Sponsored

 

[Chuck]

My credit union cut a “not to exceed” check that the dealer fill out for the purchase amount and I sign it.
I’ve always had best luck going to a dealer with check in hand to see if they can beat the interest.
My credit union check was only good for 90 days from my approval date. Be sure to ask the institution about that as well.
Good luck!

 

[TexasLEO]

Credit unions in my neck of the woods were offering 1.99% for 72 months. The only time I have had a better interest rate was when I bought my 3/4 ton Ram and the dealership was running a 0% interest rate trying to get rid of the old body style. I would just shop around if you have a ballpark idea of your credit score.

 

[u-joint]

Depends on the bank.

As others have said, some banks absolutely will cut you a check that you use. However, some banks - especially larger ones - have dealer connections already (as they're already setup for the dealer's in-house system), and once you're approved they pull up your details in the dealer's finance office and finalize the loan that way.

This is how Capital One worked for me. Since I purchased through a dealer they already had a relationship with, the finance guy was able to directly pull up my approval and complete the loan. Pissed him off too, as it meant he couldn't shop me around to whichever bank made him the most cash.

 

[Pedal Metal]

Noting your line of “Loans”, I couldn’t help but to get realed in. Yes, rates will go up, but when that happens, we may also see some inducements such as rebates to finance through Chrysler. So, my advice, is that which i was once given and meet your banker before you need them. Just realize that you’ll be in a better bargaining position with the dealer‘s finance dept if you already know your options in the market and who will match or beat what. I’d recommend talking with 3 banks or credit unions in your area in person.

Also, I realize you didn’t ask about financing term, but you may want to consider that most auto loans *used* to be 36 months. So, just some food for thought here, but absent our bizarre used car appreciate market (signs of a fracturing market) if our economy falls off a cliff, you’d be better to limit yourself to that type of car that you can finance in the shortest term possible.

Best of luck!

 

[Blade1668]

That's pretty much covered by others, bank or credit union gives you a "fill in blank" promise note. I went in without anything in hand other than USAA on speed dial. Then the dealership's affiliates had a less than 1% interest rate for me beating USAA rate. I went with it, but made sure no early payoff fees.

 

[Pedal Metal]

Also, keep in mind that if Chrysler Capital does offer a rebate inducement in effect at the time your rig comes in that I‘ve been told you only have to finance a minimum of $8k with them to qualify for that rebate. Just a nice thing to have in your back pocket.

As well, you can open a Jeep credit card for $100 bonus plus 5% back on dollars spent at the dealership and you get free interest for 6 months on dealer purchases over $499. My dealer will only allow me to charge $3k per credit card, but that’s $100 + $150 in points dollars if you pay off before 6 months that you could clear. Plus, some months you can spend your point dollars at the dealership for two times the value.

cheers!

 

[PJZ]

Just doing all the final details on my new JT today and used my credit union. So easy. Sent them the contract from the dealer who is in Kentucky (I'm in SoCal) and it couldn't be smoother. All docusign and they are overnighting the check to them including my down payment.

In contrast I sold the JK to a friend for his daughter. They used a local bank and it was like buying a house. Complete hassle that took 1/2 day.

If you can find a good credit union it might be worth it over a traditional bank. Makes your experience a lot better.

 

[ShadowsPapa]

Depends on the bank.

As others have said, some banks absolutely will cut you a check that you use. However, some banks - especially larger ones - have dealer connections already (as they're already setup for the dealer's in-house system), and once you're approved they pull up your details in the dealer's finance office and finalize the loan that way.

This is how Capital One worked for me. Since I purchased through a dealer they already had a relationship with, the finance guy was able to directly pull up my approval and complete the loan. Pissed him off too, as it meant he couldn't shop me around to whichever bank made him the most cash.

The last two Jeeps we bought without just paying outright for them, we sat in the finance guy's office at the dealership and he pulled up a screen that listed all of their options. Our credit union was in the list and had the lowest interest rate and best terms. It was really handy because we simply set it up to have the monthly payment taken directly out of our pay checks every month. When we retired we still set it up automatically that way except it came out of checking.
Time after time our CU had the best rates and it was simple to do at the dealership.
They didn't care WHO we used, didn't bother them, and in fact each time they asked who we wanted to go through. They showed us the list, we told them our CU, done deal. They even showed us who had the best rates.

Yes, dealerships will only allow a certain amount to be put on a credit card - at least any I've worked with, because they pay a crazy hefty fee for that convenience. When we had our store 17 years ago we paid something like 3% a month based on the total dollars run through the machine. If we sold 50K of stuff via credit card, we had to pay 3% of that 50K - dealerships will have to pay some fees every time a credit card is swiped there, based on the purchase amount.
If the dealer allowed you to charge any big amount on a vehicle purchase, it's a huge bill for them at the end of that month.

 

[Bananaman]

I wrote the dealership a check for the down payment and my credit union had me make sure they accepted drafting instructions. My credit union then gave me a "promissory note" to show the dealer assuring them they would get the rest of their money.

 

[FLGladiator]

Typically, a bank will issue a draft and the dealer has to register the vehicle in order to get paid. In the case of out of state, depending on credit they may give you a cashier's check or an out of state draft agreement.

 

[MikeyK]

I’m still waiting for mine to arrive (4 months to the day).

Even though I’m a little concerned about rising interest rates and my window sticker being $1000 more than when I ordered, I did make sure the dealer knew I could get a better rate from my Credit Union.

I'll let you know how everything works out! ?

 

[WhyNotJeep]

Found my perfect one on a lot, MSRP 64K and I get it for 62K. Credit union loan at 2% for 54 months and the dealer said he can do that out to 60 months. We'll see what happens. It's so much better than my modded JKUR it's another world. This one I'll leave stock and just wax it.

 

[Kevin_D]

Loan?
That’s a four-letter-word!



Kevin

 

[slim chance]

before i went to the dealer to sign the papers, i answered one of the many offers i receive daily for car loans, i had worked with this bank on other paid loans, filled out the application and was instantly "pre-approved" for a very good loan rate ... the dealer had also checked for a loan thru one of their banks .... they offered me 4.5% for 6 yrs .... my bank was 2.7% for 6yrs ... they asked IF they could beat my bank rate would i use theirs .. of course IF i liked their bank ... a major bank came back to the dealer with 2.3% for 6yrs, so i used their bank .... kinda funny they managed to beat my pre-approved loan rate .... hehehe .. all is well, buyer beware!!!!

Sponsored