Community Chat

[sunshine45]

i wonder if him only having one debt (his mortgage) has anything to do with financing issues?

[dex]

@Mistreatedbycs I know this is confusing but the advertised lower price and financing was for people with low credit or military..at least that was what the salesman said.My son is now working out a deal with another dealership.It seems the plan is to make it easy for people with a low credit score to get a deal on new cars..go figure a kind of encouragement to buy something they may not be able to pay for.

[dex]

@sunshine45 

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@sunshine45 wrote:

i wonder if him only having one debt (his mortgage) has anything to do with financing issues?

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It shouldn't because he has a high credit score.

[sunshine45]

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@dex wrote:

@sunshine45 

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@sunshine45 wrote:

i wonder if him only having one debt (his mortgage) has anything to do with financing issues?

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It shouldn't because he has a high credit score.

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i know that my kids have high credit scores, but only because they each have two credit cards and they pay them off.....no rent, no mortgage, no car payments. they are not huge wage earners because they are still in college. i do think that if you carry some debts and pay them off frequently that may raise scores.

[Drythe]

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@Carmie wrote:

Last year my DH was looking for a small Jeep SUV,  we found what we wanted at a dealer and negotiated a price.  The dealer wanted to talk financing, but we were not interested and told him so,

The next day, we came back and signed all of the papers and gave them a cashiers check for the vehicle,

The following month, I got a " ping" that something had changed in my credit report.  When I checked, I noticed that the dealer had tried to secure financing at two different places for that vehicle.  My DH's credit report showed the same thing.

We both lost a few points because of that dealers search.

you can bet in the future that we will immediately tell any car dealer that under no certain terms are they allowed to run a credit report of do a search for a loan for us.

if we need financing, we will secure it ourselves. Dealers want you to finance though them.  They get kickbacks from the Banks when you do.

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@Carmie

Exactly the same thing happened to us when my DH traded cars 3 years ago.  The dealership ran 3, yes, 3 hard credit checks on even though we told them from the get go we were paying cash and did not need / want their financing.

@As for me, I hope to keep driving my @ 21 year old Volvo.

[sligo]

I have one credit card which is entirely paid off each month. Told my credit score was not higher (VG) because I ony have that one card and no debts! Obviously, they want you to have several cards and just pay the small amt. every month. Complete foolishness!!Still only have the one card and no debts.  I was always taught if you don't have the money you don't make the purchase. Still think this is the best advice we give to our children.

[Helen852]

Dealers do make money on finance charges but not that much. The most financial institutions let them mark it up is 3bps.  However, the reason you should finance (and then pay off after 1-3 months) is for rebates and other incentives available.  Sometimes you won't get the rebates without financing with the automotive finance arm of the brand.  For instance, GM may have $4,000 rebates out there if you finance with them, some for summertime, some for a conquest or returning customer appreciation. If you don't finance with them, you won't get that.  With interest rates as low as they are, what you'd pay for that month or so, is it worth losing out on a $4,000 rebate?  As far as what they make in commission, I worked for a Big 3, so I get the vehicle at invoice. The dealer makes a 5% on it, but the salesperson certainly doesn't get the 5%. If he gets 2% that's a lot.  

We just returned from a dealer today. Our lease is ready to be termed; there's a pull ahead where 3 months will be waived, plus $4,300 in rebates to be applied.  

But I've never heard of having a lower credit score for a better rate.  

[SilleeMee]

It kind of works the same way as when you '"rent-to-own" something and your credit history is not looked at because either it is bad or non-existent. The store sells you their stuff at a higher price and they offer you their own financing option. You end up paying more at the end of your term and if you are late on payments, this is where things can get expensive. Not a good deal imo.

[croemer]

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@Kachina624 wrote:

Usually the best deals, like no interest loans, are reserved for customers with the highest credit scores. 

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Exactly. We got a zero interest rate on my vehicle because of good credit rating. Something smells fishy here.

[Mistreatedbycs]

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@dex wrote:

@Mistreatedbycs I know this is confusing but the advertised lower price and financing was for people with low credit or military..at least that was what the salesman said.My son is now working out a deal with another dealership.It seems the plan is to make it easy for people with a low credit score to get a deal on new cars..go figure a kind of encouragement to buy something they may not be able to pay for.

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I think someone misunderstood, 0% interest is for qualified buyers who meet their requirements which is about average or above credit, or there are additional discounts given if you opt not to accept the 0% financing and take monies off the top.

Generally people with lower credit ratings pay more, just makes sense, they are more of a risk and seriously no one is going to offer a "better deal" to people who are risky.