Question about financing

Today I placed a deposit on a 16 Tacoma, but I am skeptical about the financing because these guys arent exactly the most honest people in the world. Am using my father as a cosigner, now he has fair credit so I am keeping realistic expectations as far as rates go (i.e. i do not expect 2.5%). however, we were offered a rather fair rate and that is what is making me skeptical. the truck is supposed to arrive in 2 weeks, what i am afraid of is they will bait and switch once it is being unloaded and jack up the rate to 8% or so.

the finance manager assured me the rate is set and once the truck arrives, they will need 3 months of bank statements and we are set. no additional credit inquiries will be made.

can i believe him? is there anything I can do to be certain? i don't want to get my hopes up for nothing, because i will walk away if they jack up the rate last minute. plus, its incredibly difficult not to daydream about the truck.

thank you.

 

Got it in writing? If not, there's nothing to believe.

 

so i could ask for something along the lines of "may i have a copy of the approved loan offer?"

 

Did you sign anything locking you into that rate? If you haven't signed anything then nothing is final. I would check with a CU they can't pull the bait and switch move and they're usually better with rates.

 

Why don't you guys get some rates from credit union so if dealer plays games you can buy it with credit union financing.

 

do credit unions work with fair credit? i have heard only good things from credit union auto financing, however, it has only been from friends with GREAT credit, not fair or average.

 

You may have to open an account with them. But all that requires is opening an account and depositing a dollar into it. But they should be able to work with you. The rate might not be as good as someone with a 750 credit score but it will probably beat the dealer and you don't have to worry about the bait and switch.

 

Financing with the dealership? Look out for the "loan origination fees". This is a commission for the dealer for selling you on the loan, much like what a real estate agent gets when selling a house. They tack onto the loan usually 1-2% as a loan origination fee. This is negotiable and in some cases you can get it waived entirely. But keep it in mind as comparing loans is not just about he interest rate. Additionally, remember that this fee will get put into the loan and accrue interest.

Anyway, there are some great deals on car loans right now. Check with your local credit union about their rates. They can put into writing a loan deal now, without the vehicle being there at the dealership. That dealer finance person is actually a skilled salesperson and is going to try to sell you into add-ons. They'll try to sell you a warranty (manufacturer warranty from Toyota good, dealer warranty bad). They'll try to charge you for little things that come on the vehicle anyways, like VIN number etching, UV fabric protectant, or putting clear plastic stickers on your hood "chip guard". And on and on.

My recommendation is to skip all this hell and walk in with a check from the Credit Union in hand. Make sure it's a few hundred under what the invoice is.

Good luck.

 

definitely not taking the truck home without a locked in deal. i know they will call me days later with a higher rate.

my first job out of highschool was at a bankruptcy law firm, they had salesmen and i learned through that job how scummy they can be.

 

i was not aware of this loan origination fee. i will keep an eye out for this.

fortunately, i already negotiated the price and had them remove all the dealer add ons, but you are spot on as those things you mentioned were originally included in the price until i had them removed.

thanks.

 

i am going to bring this up to my father so we can explore this option.

meanwhile, i am going to call the finance manager and tell him i need a copy of the finalized loan offer.

 

I was able to get a loan from a credit union with a score of 580, I think at the time the rate was 5.45% which still wasn't horrible at the time either. I understand the stress! Even now with my score being 725 I was still nervous. The transaction hasn't been completed yet, but I have two offers in writing with interest rates 2.24% & 2.8%. So I feel pretty confident at this point. Also, you can refinance the truck at anytime to get a better rate or if/when you just want the loan in your name. Hope this helps!

 

Awesome! This definitely gives me hope, i'm much rather walk in with a check from a credit union then take financing from a dealer. thank you for sharing.

 

It'll work out!!!

 

get a pre-approval from a credit union and bring the terms with you to the dealership. toyota financing WANTS your business, and works with a ton of different banks, so will almost certainly be able to match/beat it when the time comes. as long as you have a fallback plan, you can rest assured you are getting the best deal you can.

 

I finance mine with PenFed @ 1.99% for 60 months

 

Definitely do your research with credit unions and your own bank.
When we bought our RAV4 a few years ago we went with Toyota financing. Wished we went with someone else because they made it so difficult to make extra payments, but lived with it.
When I bought the '14 Tacoma, again went with Toyota as it was quicker to get things finished at the dealer (went in not necessarily ready to buy, but drove out with the new truck-felt bad leaving my '01 DCSB looking forlorn in their lot).
Switched over to USAA a couple months later - dropped my rate from about 2% down to 1.5% (36 month, auto withdrawal from the checking account I have with them)

 

looks like the concencus is to apply at a credit union. thank you for sharing, helps me calm down a bit.

 

Yeah, credit unions usually have great rates and most can work with you!

 

PenFed is awesome! With that being said, I believe they are essentially a no-risk lender, and only deal with exceptional credit ratings

Absolutely check other lenders, and expect a mark-up or 1-2% as stated for the loan origination fees. A large majority of reputable dealers have done away with these fees and already pay their finance guy a 2% fee. It helps keep scams to a minimum

Good luck brother. Do your homework and you can get a fair deal

Trey