Should I finance with Toyota?

I ordered a 2016, putting 10k down, and have perfect credit. What kind of rates should I expect from Toyota or should I start shopping for financing?

 

When I first bought my 2004 4runner I went with Toyota because they offered 1.25%, which beat everyone else at the time. Doesn't hurt to shop around though. I found that if you have outstanding credit Toyota is hard to beat, at least for me.

 

From a local dealer:

I went with a credit union at 1.99%

 

You should always shop, and pick the best deal for you.

Don't forget to include credit unions in your shopping.

 

Your dealership may already have relationships with credit unions and can get shop for you, so you don't have to go all over and get a bunch of hard pulls on your credit

 

I went into Toyota with pre approval 2.4 from my credit union and they offered 1.9%

Use financing as leverage, dealers make money off of it.

 

Definitely true.

When I bought mine I was going to go with my credit union, got a preapproval letter and everything. Dealer said "that's great, we work with them, but mind if we see if anyone else can do better" and another local bank beat their interest rate by about 1/2 a percent.

I believe if you shop for auto loans, they all count as one inquiry for scoring purposes as long as it's within a 14-day span.

If you've got a good score, it'll help you in more than just interest. When I bought mine, I put $5k down and they told me "Normally we'd require a cashiers check for that, but with your credit score a personal check is fine."

 

I would go to a credit union first so you have something to compare it to when going in to purchase. If you tell them the rate you received up front they may try to beat it. They can pretty much make up whatever rate they want. I've had them come back with high rates before even though I have excellent credit and I told them "that's unfortunate, my credit union can beat that by two full percentage points (rape). Then they'd be like "oh, let me see if we can get that down for you.." I would say no that's fine, you had your chance. They miss out on the interest from the loan which is obviously beneficial to the deal for them.

Current new car rates at my credit union are:
3 Year (36 month) 1.74%
4 Year (48 month) 1.99%
5 Year (60 month) 1.99%
6 Year (72 month) 2.49%
7 Year (84 month) 3.99%

 

How does a dealer make money from external financing?

 

Dealership Financing
Most people wanted to finance their car by taking out a loan or leasing it. The dealership had access to wholesale lending rates, called the "buy rate," and loaned this money to the customer at a few percentage points higher, which we called the "sell rate." This was a huge source of revenue for the dealership and it was about 50 percent of the commissions I earned.

Bumping up the interest rate was easy to do because most of our customers didn't know what rate they qualified for. If I sensed that they were uninformed, I could offer them, say, two points over and they would agree to it. If a customer had good credit but didn't know it I could say, "We ran your credit report and, well, I guess you've had a few problems. But I'll do my best to help you out."

 

I went in pre-approved with USAA at a rate I was pretty happy with, Toyota beat them by quite a bit. Also offered a very discounted warranty extension from Toyota to 6yrs/75k which I paid cash for, usually I pass on those but this one was fairly priced, can be cancelled if I change my mind before the standard warranty runs out and direct from Toyota. Good finance managers can do a lot to save you money, bring them a coffee and ask a lot of questions. Also helps to avoid the high volume dealerships, they typically have more stock but often are frantically busy and less willing to spend much time looking for a better deal. That's been my experience over the last couple of purchases anyway.

 

If you don't get 0%,,which you won't, let them give you the rate, then ask them what their buy rate is. The buy rate is what THEY get from finance companies. Example...they charge you 4%, but they only pay 2%(their buy) rate. They're making 2% on the finance over the period it takes you to pay off the loan. Something to think about.

 

I got 2.9% from Toyota for my 2015 with absolutely no credit history (just graduated college had no money) and credit union and usaa were quoting me 8 or 9 percent. Shop around for sure but if you have no credit then toyota's is a pretty decent option

 

It was pretty much covered by the above statements. I learned a lot over the years of buying cars and my lady used to work at a dealer. They make money everywhere. I disagree with the statement to stay away from high volume dealers. I found my best deal and they were more willing to negotiate. The GM said himself that one skinny deal isn't going to kill him. With that being said I got my 15 for 26,900 out the door with 8k down @1.9%. That included tax, tag and fees. There was only one model higher of OR on the lot and it had JBL. I didn't want the JBL. I got everything else though.

Bottom line is, do your homework and come prepared. Don't be scared to walk. Make them fight for your business because when you have A+ credit, you hold cards.

 

It really depends...

When I bought my Tacoma, I was pre-approved for a loan at a good rate from my Credit Union... plus had an additional point off since I was an employee of the Credit Union. When I talked to the dealership, they were able to get Toyota financing which was better than the rate that my employers offered me. It never hurts to shop around for financing. Just don't apply for the financing with any lender until you've made your choice and are ready to commit to the loan.

 

I got 1.9% from Toyota and stayed years ahead on payments.

^^ That's f*cked up.

 

...So far...all you guys have talked about it good/great credit....ALL my life I had perfect credit...the best an individual could have....was always a good boy....

...Then, 12 years ago my sweet wife got breast-cancer.....and over the next 4 years it spread and complicated....

...By the time she died, the medical costs topped off at $1.35 million dollars!...I had good insurance, but no insurance pays for everything....so I was left with over $338,000.00 in debt....

...I was close to retirement age, All our savings had been wiped out...so I had to file for Chapter-7 bankruptcy....it finally came thru in 2009..so I have a few years left until I am clear of that crap....

...Basically....I am totally screwed financially...but still need to buy a vehicle...so does anyone have any good advice on how to minimize the damage when I go in to a dealer?

NOTE:...I am hardly alone!....the latest finding from AARP states that anyone living in America who is 55 or older, and has a major medical problem..( heart-attack, broken hip, auto-accident, etc )...

...even with the Best medical insurance coverage possible...3 out of 4 will Still have to file for bankruptcy due to the ridiculously high costs!...For the math-challenged...that's 75%......DAMN!

 

If anyone gives you a loan with bad credit it will just be at a much higher percentage rate 10% to 15% worst case. I pretty sure they wont finance you a new $35k+ truck under any circumstances unless you had a ton of money to put down on it. They may finance you for like a base model SR. Aside from a much higher interest rate everything else involved with buying the car should be the same. There's really nothing you can do except shop around for the best rate, but you obviously don't have the upper hand in any of this.

 

...Appreciate the advice.....which I already kinda figured would be the answer....

...So now...I just gotta figure out how many 7-11s I need to knock off in order to get a huge down-payment, right?.....

 

I would say that if you don't already belong to a credit union, join one. If you know anyone good with financial planning, sit down with them. I actually use my mortgage broker cause she's a wiz at all things money related. She helped get my to my A+ rating.