Edmunds Answers

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  • avatar autobroker2 04/20/09 10:59 am PST

    Yes, you should definitely shop around, but I would also offer another suggestion. Presumably you want this to be your car, and someone else is helping with the loan. However, you both have to be on the title and on the loan.

    Since you are both going to be on the title and loan anyway, you might consider switching this around. Have your cosigner go first, and you cosign the loan. That way, they look at this as loaning to a 750 score first.

    It might also help if you can find a credit union you can join. Around here they always use the high credit to establish the rate. In your case, the rate would be based on the 750 score, regardless of what your score is.

    Just for the record, 5.7% for 72 months is not unreasonable right now for bank financing.

    You do not mention what kind of car you are buying or whether it is new or used. Since you have said you are going 72 months, presumably the car can't be all that old. Unless you are already set on one specific vehicle, it would not hurt to shop for the current deals being offered. There are new cars being offered at 0% for 60 months. Since you are looking at a used car at 5.7% for 72 months, you may find that the payment is not that much different. Note that a loan on $18,000 for 60 months at 0% is $300 a month, and $18,000 at 5.7% for 72 months is $296 a month.

    It is possible that a manufacturer offering 0% may approve a deal with you on it just to help sell a car. In that case, it's a yes or no decision, not a question of how much the rate should be. It would certainly be worth a try if a new car makes sense to you.



    If you are looking for used, some manufacturers offer lower interest rates for certified cars as well.

    If you are not taking a special rate offer from a manufacturer, one thing you should watch out for is that most dealers will try to jack up your rate just to make more money on your deal. They will use the excuse that your credit is making them raise the rate. That is where the shopping aorund comes in. You should know what you can get before you get stuck with what the dealer is offering.



    Good luck!






Answers

  • MrShift@Edmunds 04/19/09 1:28 am PST

    You shop for credit just like you shop for a car---you can go from place to place. If you start hearing the same thing over and over, that's your answer as to the lowest rate for you. You can borrow money from a variety of sources---banks, credit unions, dealer financing and the internet.




  • autobroker2 04/20/09 10:59 am PST

    Yes, you should definitely shop around, but I would also offer another suggestion. Presumably you want this to be your car, and someone else is helping with the loan. However, you both have to be on the title and on the loan.

    Since you are both going to be on the title and loan anyway, you might consider switching this around. Have your cosigner go first, and you cosign the loan. That way, they look at this as loaning to a 750 score first.

    It might also help if you can find a credit union you can join. Around here they always use the high credit to establish the rate. In your case, the rate would be based on the 750 score, regardless of what your score is.

    Just for the record, 5.7% for 72 months is not unreasonable right now for bank financing.

    You do not mention what kind of car you are buying or whether it is new or used. Since you have said you are going 72 months, presumably the car can't be all that old. Unless you are already set on one specific vehicle, it would not hurt to shop for the current deals being offered. There are new cars being offered at 0% for 60 months. Since you are looking at a used car at 5.7% for 72 months, you may find that the payment is not that much different. Note that a loan on $18,000 for 60 months at 0% is $300 a month, and $18,000 at 5.7% for 72 months is $296 a month.

    It is possible that a manufacturer offering 0% may approve a deal with you on it just to help sell a car. In that case, it's a yes or no decision, not a question of how much the rate should be. It would certainly be worth a try if a new car makes sense to you.



    If you are looking for used, some manufacturers offer lower interest rates for certified cars as well.

    If you are not taking a special rate offer from a manufacturer, one thing you should watch out for is that most dealers will try to jack up your rate just to make more money on your deal. They will use the excuse that your credit is making them raise the rate. That is where the shopping aorund comes in. You should know what you can get before you get stuck with what the dealer is offering.



    Good luck!






  • sweetie26 04/20/09 11:59 am PST

    The 5.7% is for 60mos. not 72 which is high. 5.7% for 72mos would be good. I know they will try to increase the rate and blame my credit for it, that's why I asked this question to get advice as to what to do to avoid that from happening. I do belong to a credit union and will call and see if the finance for 72mos and what rate I can get from them. I will switch it around like you suggested and have my co-signer as the signer and me as the co-signer so they will base the loan his credit score and not mine. Thanks for your advice!

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