Car Buying Tips - Stumbling Over Dealer Finance

By Jeff Neilan

For this draft let's get into an area of the automobile purchasing process that will truly cost people enormous. Financing your automobile.

Each auto dealer has a F&I department and you can bet the house they are going to try awfully hard to get you to allow them to deal with the financing for you.

Simply based on my experience in the business and afterwards talking with people on the topic of getting your best car deal; I probably shouldn't be stunned at the quantity of individuals that think automobile dealer financing is just this non negotiated process that happens at the dealership that ties the deal together and enables them to sign up for their payments and get on down the line.


Of all of the car buying tips to chat about auto dealer financing and what goes on in a dealership's FI finance and insurance office was a no brainer for me when thinking about some of the most common mistakes folk when it comes to vehicle buying.

Let me make this perfectly clear to you. A dealer's F&I dep. can be an excellent source of profit for the dealer!

But let's back up one moment. For whatever reason there's a great many of us that do not consider the financing or the cost thereof part of the cost of ownership puzzle or part of getting a good car deal.

If you do not. Then do. Or you will make many a vehicle dealer very happy to see you coming.

I assume it is down to the fact you do not actually "see" this money leaving your main account every month. After all that it is concealed inside your vehicle payment (basing your purchasing decision based on monthly payments is another topic for Big mistakes).

Make the effort to have a look at the impact of IRs and what you will be forking over over the length of your vehicle loan. And if you're auto financing with a bit bad credit on your side the money implication can be terribly awfully hefty.

Take a second to think about this and solely to give yourself a wake up call... Plug in a $20,000 loan for an auto for 5 years at a modest 4 rate.

You can note that your payment comes to $368.33. Now change the rate of interest to 8% and you'll see your regular payment change to $405.53. A difference of only $37.20 month.

Hey that's just one night less a month to go out.


Well take your $37.20 times your 60 month loan and the most notable difference between the 2 interest rates is a big $2,232.00. I don't know about you... But twenty-two hundred bucks is worth me making the effort to get my financing options in order.

You should positively shop your rate of interest!

Begin by getting (and knowing) your credit report. Regardless of if you have some difficult credit shop your interest rates. Sure they will probably be higher but there is not reason for them to not be competitive comparatively speaking.

Here's the bit about vehicle dealer financing and what I'm consistently amazed at when talking about this with people. Many people don't realize that when they get quoted and interest rate from a car dealer's finance department saving you even more.

But if they can't... Or won't... You can advance with the remainder of the deal with confidence understanding that you took the time to keep your financing costs as low as your possibly could.

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