Car loan interest rate

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bnr88

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Hi guys.

I hardly post on mybb but i do read the articles and forums often and find the users here very helpful so I hope you guys could give me some advice here as this is my firs time buying a new vehicle.

I read on a previous thread [http://mybroadband.co.za/vb/showthread.php/464397-acceptable-interest-rate-for-a-new-vehicle] about rejecting the first offer, etc. My dealership got back to me with a rate of 12.1% at wesbank. The finance lady there says it has to do with my age [24], my short credit history and the fact that i don't own property [I actually do - the transfer is currently going through].

What i don't get though is how people of the same age,etc [ie. my friends and my brother] have all got rates of around prime. My brother got a rate of 7.5 not too long ago, and has basically the same history as me.

How does one actually go about negotiating a better rate? Do i deal with wesbank directly or do i get the dealership to do it for me? And what rate is actually acceptable?

Thanks for the help, i really appreciate it.

A dead banker is a good banker :mad:

Lol
 
Don't go with the dealer. Apply directly to the bank, I think the dealer gets a commission for screwing you.
 
You walk into the dealership (if you're adamant on using their finance people), you tell them the rate you will accept and anything above that will mean the deal will not happen.

Also deal directly with the banks, then you're not paying the dealership kickback fee.
 
ToxicBunny said:
You walk into the dealership (if you're adamant on using their finance people), you tell them the rate you will accept and anything above that will mean the deal will not happen.

Also deal directly with the banks, then you're not paying the dealership kickback fee.
Click to expand...
Failing that, bring a six shooter and open with "Make me an offer I can't refuse".
 
With my current car the dealership finance houses offered me slightly under prime.

Had to beg my own bank for a rate. After stalling the process for 2 days, they ended up offering me a ridiculous rate so I rejected it.

30 mins later they phoned back with a better rate, but still higher than the dealership rate. I rejected it again. I've also accepted the dealership finance by this stage.

30 mins later they phoned back YET AGAIN. Now they had spoken to a "manager" and offered me the same as the dealership. I told them to get stuffed, they had their chance.

5 mins later, they phoned back yet again - with a further reduction of 0.5%. (Reallllly stupid on their part as I wasn't going to go back on my existing commitment. They should just have offered the better rate immediately on application.)

The point is: negotiate. They have room to move and WILL try to make some money. (The worst they can say is "No" - its not like they will retract an existing offer if you ask for a better rate - they also need an income.)
 
sgs said:
With my current car the dealership finance houses offered me slightly under prime.

Had to beg my own bank for a rate. After stalling the process for 2 days, they ended up offering me a ridiculous rate so I rejected it.

30 mins later they phoned back with a better rate, but still higher than the dealership rate. I rejected it again. I've also accepted the dealership finance by this stage.

30 mins later they phoned back YET AGAIN. Now they had spoken to a "manager" and offered me the same as the dealership. I told them to get stuffed, they had their chance.

5 mins later, they phoned back yet again - with a further reduction of 0.5%. (Reallllly stupid on their part as I wasn't going to go back on my existing commitment. They should just have offered the better rate immediately on application.)

The point is: negotiate. They have room to move and WILL try to make some money. (The worst they can say is "No" - its not like they will retract an existing offer if you ask for a better rate - they also need an income.)
Click to expand...

Thanks for the advice. I just replied to the dealership saying that the rate is nowhere near reasonable and they must come back with a new offer. I will also speak to the banks directly tomorrow. Just out of interest, who is your bank?
 
Yeh, tell them what you're prepared to pay, be prepared to walk away and try another dealership, and tell them you'll walk away if you don't get a decent deal.

I found mfc (nedbank) are giving the best rates. I got -1.5% last year May
 
xrapidx said:
Yeh, tell them what you're prepared to pay, be prepared to walk away and try another dealership, and tell them you'll walk away if you don't get a decent deal.

I found mfc (nedbank) are giving the best rates. I got -1.5% last year May
Click to expand...

Ya I think trying another dealership will really scare them haha.
I was just looking at mfc's site. I don't like the fact that you can only deal with them through a dealer, but i'll give it a try.
 
Going direct to the bank should give you give a better rate cause then the bank won't need to fund the commission to the dealer. Same with bond originators....always go directly to the bank...
 
Another question guys, I'm selling my current car to use as a deposit for the loan. I was told by the dealer that I can take the loan with no deposit and then once I sell my car, put that money straight back into the loan and it'll bring my installments down as if it had been there as my deposit from the start. Is this true and has anyone done it? Sounds a bit fishy to me..
 
bnr88 said:
Another question guys, I'm selling my current car to use as a deposit for the loan. I was told by the dealer that I can take the loan with no deposit and then once I sell my car, put that money straight back into the loan and it'll bring my installments down as if it had been there as my deposit from the start. Is this true and has anyone done it? Sounds a bit fishy to me..
Click to expand...

No, not fishy, actually smart. Bank normally give lower interest rates on bigger amounts. You will definitely get a better interest rate on a 150 thousand car than say a 50 thousand car.

So now you get a better interest rate, and a lesser amount to pay each month (or you can phone the bank and reduce the term by keeping the monthly amount the same).
 
Not sure why everyone is slagging the dealer? I got quotes of prime +1 or 2 at the banks. The dealer was offering prime (8.5%) through Wesbank, or 9.5% fixed. I took the fixed option.
 
Standard gave me 10.6 variable as a quote, which they'll confirm on monday. Doesn't look like I'm winning with these banks...
 
It does vary. You will not always get a better rate at the bank directly but you may. The downside is dealing with the incompetents at the bank as opposed to having the F & I at the dealership do it on your behalf. I guess it all depends how you feel your time is best spent.
 
The F+I got me a rate of 9 variable today, which i think is a lot better than what i was given previously. I had to go to another dealership but it looks like it's all gonna be worth it. I'm going to try and push for prime or below tomorrow.
 
bnr88 said:
Hi guys.

I hardly post on mybb but i do read the articles and forums often and find the users here very helpful so I hope you guys could give me some advice here as this is my firs time buying a new vehicle.

I read on a previous thread [http://mybroadband.co.za/vb/showthread.php/464397-acceptable-interest-rate-for-a-new-vehicle] about rejecting the first offer, etc. My dealership got back to me with a rate of 12.1% at wesbank. The finance lady there says it has to do with my age [24], my short credit history and the fact that i don't own property [I actually do - the transfer is currently going through].

What i don't get though is how people of the same age,etc [ie. my friends and my brother] have all got rates of around prime. My brother got a rate of 7.5 not too long ago, and has basically the same history as me.

How does one actually go about negotiating a better rate? Do i deal with wesbank directly or do i get the dealership to do it for me? And what rate is actually acceptable?

Thanks for the help, i really appreciate it.

A dead banker is a good banker :mad:

Lol
Click to expand...

What I did was was tell the finance person that other car dealership with other car wanted to offer me interest rate x. I hope you guys can beat it. and they did.
 
Qwikslver said:
What I did was was tell the finance person that other car dealership with other car wanted to offer me interest rate x. I hope you guys can beat it. and they did.
Click to expand...

That's exactly what i did. I went to another dealership and told them that the rate I got at the other dealer was ridiculous. He asked me what rate i thought was fair and got me exactly that. I should have asked for lower lol.
 
I too got shafted with my interest rate when i bought my car 2 years ago.

I am now 25 and wondering if its possible to get the interest rate re-negotiated, or if its worth my while taking out a personal loan and paying my car off with that.
 
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