Purchasing a 2017 - question about financing

[mikeg]

I am used to leasing all my cars, so this is a bit new to me.

1. What would be a good interest rate for me with Tier 1 credit on a used 2017 Raptor?
2. Can a dealer mark up the interest rate? If so, how do I confirm they don’t.
3. Any banks in particular I should tell the dealer I want to finance through?

Many thanks in advance and I look forward to being more active on here once I make my purchase!

 

[Nights Watch]

Join a credit union for the best rate and also purchase an extended warranty thru the credit union...

 

[melvimbe]

1 - Rates change all the time and are different by the area you live in, slightly. Do some research with a credit union or bank you like. Look at bankrate.com. It's a good idea to get preapproved before you go to the dealer. The dealer probably has a few banks they work with, so you don't have to do this, but it helps. Some dealers will try and sell your monthly payment, instead of the total price of the vehicle. Avoid that.

2 - No, they cannot change the rate, especially if you do your own financing. What they can do is offer you a discount price if you use their financing. For example, Ford credit may offer you 0% financing for 72 months, or $3500 cashback (never on a Raptor though). Do the math to figure out which makes the most sense for you. If you plan on paying a lot of money down, or the loan off early, the interest rate matters less.

3 - They have a few banks they work with and generally give you the best rate they can get. If there is a bank you don't want to work with for whatever reason, you can tell them you won't get a loan through Bank X. But again, you can get pre-approved for your own loan.

Just as added tip, don't include the loan in the negotiation of price. The sales guy may ask what monthly payment you're willing to pay, so that they can work a deal that fits under that amount and maximizes their profit. Decide on the final price then work on the loan, extended warranty if you want it, etc afterwards.

 

[mikeg]

1 - Rates change all the time and are different by the area you live in, slightly. Do some research with a credit union or bank you like. Look at bankrate.com. It's a good idea to get preapproved before you go to the dealer. The dealer probably has a few banks they work with, so you don't have to do this, but it helps. Some dealers will try and sell your monthly payment, instead of the total price of the vehicle. Avoid that.

2 - No, they cannot change the rate, especially if you do your own financing. What they can do is offer you a discount price if you use their financing. For example, Ford credit may offer you 0% financing for 72 months, or $3500 cashback (never on a Raptor though). Do the math to figure out which makes the most sense for you. If you plan on paying a lot of money down, or the loan off early, the interest rate matters less.

3 - They have a few banks they work with and generally give you the best rate they can get. If there is a bank you don't want to work with for whatever reason, you can tell them you won't get a loan through Bank X. But again, you can get pre-approved for your own loan.

Just as added tip, don't include the loan in the negotiation of price. The sales guy may ask what monthly payment you're willing to pay, so that they can work a deal that fits under that amount and maximizes their profit. Decide on the final price then work on the loan, extended warranty if you want it, etc afterwards.

Does Ford Credit have a standard interest rate based on Tier 1 credit?
Do they offer 0% 72mo for a Raptor?

 

[melvimbe]

Does Ford Credit have a standard interest rate based on Tier 1 credit?
Do they offer 0% 72mo for a Raptor?

The deals change all the time, check the Ford website or your local dealer to see what's current. It's going to be very rare for their to be any 0% offers on Raptors as they don't need to do that to sell them. My understanding is that loan rates are pretty low right now anyway.

And those sort of deals are never on used vehicles, just new.

 

[FordTechOne]

Does Ford Credit have a standard interest rate based on Tier 1 credit?
Do they offer 0% 72mo for a Raptor?

No, that deal does not apply to Raptors, nor does it apply to any used vehicles.

Per their website, Ford credit is currently offering 0.99% APR for 36 months on “Gold” certified used models. That expires today, but they will typically either renew it or offer another incentivized rate.

If you finance through the dealer, they can mark up the rate. So if their lender offers 5%, they can mark it up to 7% and then profit the 2% for themselves. It’s shady but legal unfortunately.

 

[melvimbe]

No, that deal does not apply to Raptors, nor does it apply to any used vehicles.

Per their website, Ford credit is currently offering 0.99% APR for 36 months on “Gold” certified used models. That expires today, but they will typically either renew it or offer another incentivized rate.

Wow. Never seen any Automaker financing deals on used vehicles before, but can't say I was looking either. Has this always been the case, or something relatively new since they can't get new vehicles to the lot fast enough?

If you finance through the dealer, they can mark up the rate. So if their lender offers 5%, they can mark it up to 7% and then profit the 2% for themselves. It’s shady but legal unfortunately.

Hadn't realize that either. I stand corrected. Again though, if you do research to know what rate to expect in advance, or even get preapproved, the dealer can't get away with charging you a ridiculous rate.

 

[FordTechOne]

Wow. Never seen any Automaker financing deals on used vehicles before, but can't say I was looking either. Has this always been the case, or something relatively new since they can't get new vehicles to the lot fast enough?



Hadn't realize that either. I stand corrected. Again though, if you do research to know what rate to expect in advance, or even get preapproved, the dealer can't get away with charging you a ridiculous rate.

Same here, I just went to their website and found it, so not sure how long they’ve been offering that.

The dealer markup is just something to be aware of. As you said, better to secure financing through an outside source to prevent them from marking it up.

 

[KODIAK]

Same here, I just went to their website and found it, so not sure how long they’ve been offering that.

The dealer markup is just something to be aware of. As you said, better to secure financing through an outside source to prevent them from marking it up.

I'll add this: The dealer can go the other way with the financing as well. They can call in a favor to their contacts at banks, especially if they're a high volume dealer. I make it part of the negotiation process. They've already agreed on numbers with you and put in the legwork, most dealers will get you to a lower rate than what's publicly available on websites to close the deal. Most people unfortunately don't push hard enough and they're just happy to get what they get.

 

[Winchester30]

Join a credit union for the best rate

Agree, do some comparison shopping.

…also purchase an extended warranty thru the credit union...

Disagree, FloodFord ESP.

Credit union or other third party warranties can get held up for “approval” of work. Just happened to my friend- cam phaser repair on F150.