Financing a used car- HELP!!

AliceJ

New Member
Joined
Apr 21, 2015
Messages
4
About to buy a Hyundai i20 (2009- 70000kms) for 99k. Applied for financing through the dealership, which was approved by ABSA. The dealership makes use of an F&I and insist that I need to go through the F&I and not directly through the bank. The F&I has offered me the following deal which seems insanely steep- on a 99k car, with the 17k deposit I am putting down, over 60 months, the installments will be R2080 @ 13.8% linked or R2150 @ 15.05% fixed. I am keen to stay firmly away from the linked option. I find these numbers to be high though- I am also not a first time buyer. Also, these F&Is- can the dealership insist I use them? And who pays them? Is this why my rates are higher here as they are taking their share too? If I get pre-approval from the bank and approach the dealership with that would they be likely to accept that and allow me to negotiate with the bank directly? Is this all very dodgy or normal practice? Any help anyone could offer would be amazing, thanks.
 

Pitbull

Verboten
Joined
Apr 8, 2006
Messages
63,440
About to buy a Hyundai i20 (2009- 70000kms) for 99k. Applied for financing through the dealership, which was approved by ABSA. The dealership makes use of an F&I and insist that I need to go through the F&I and not directly through the bank. The F&I has offered me the following deal which seems insanely steep- on a 99k car, with the 17k deposit I am putting down, over 60 months, the installments will be R2080 @ 13.8% linked or R2150 @ 15.05% fixed. I am keen to stay firmly away from the linked option. I find these numbers to be high though- I am also not a first time buyer. Also, these F&Is- can the dealership insist I use them? And who pays them? Is this why my rates are higher here as they are taking their share too? If I get pre-approval from the bank and approach the dealership with that would they be likely to accept that and allow me to negotiate with the bank directly? Is this all very dodgy or normal practice? Any help anyone could offer would be amazing, thanks.

From my understanding an F&I is there to make sure all the documents are in order for the bank. They are also the authorised person to give advice (financial). Which an approval letter from the bank doesn't do. Unless you buy cash I think banks insist on F&I's. I can be wrong though.
 

LCBXX

Honorary Master
Joined
Apr 11, 2006
Messages
17,321
13.8% linked? F0k. Also, whats with these strange .05 and .8 decimals. Seems like some skimming from the top..

Not sure which region you are in but if it is Gauteng, walk away and get a better deal elsewhere. Plenty about.
 
Last edited:

AliceJ

New Member
Joined
Apr 21, 2015
Messages
4
I am in George- I am keen to go to the bank and get pre-approval so I can negotiate directly with them rather as I think the F&I is doing the skimming! What is a good fixed rate? Thanks for all your help!
 

LCBXX

Honorary Master
Joined
Apr 11, 2006
Messages
17,321
I am in George- I am keen to go to the bank and get pre-approval so I can negotiate directly with them rather as I think the F&I is doing the skimming! What is a good fixed rate? Thanks for all your help!
Get hold of all the banks and get a deal. MFC, Stannic, Wesbank, ABSA. Take the best one.
 

Ancalagon

Honorary Master
Joined
Feb 23, 2010
Messages
18,077
About to buy a Hyundai i20 (2009- 70000kms) for 99k. Applied for financing through the dealership, which was approved by ABSA. The dealership makes use of an F&I and insist that I need to go through the F&I and not directly through the bank. The F&I has offered me the following deal which seems insanely steep- on a 99k car, with the 17k deposit I am putting down, over 60 months, the installments will be R2080 @ 13.8% linked or R2150 @ 15.05% fixed. I am keen to stay firmly away from the linked option. I find these numbers to be high though- I am also not a first time buyer. Also, these F&Is- can the dealership insist I use them? And who pays them? Is this why my rates are higher here as they are taking their share too? If I get pre-approval from the bank and approach the dealership with that would they be likely to accept that and allow me to negotiate with the bank directly? Is this all very dodgy or normal practice? Any help anyone could offer would be amazing, thanks.

Don't accept that rate.

The thing is, what the dealership can do is say they will sell the car to you for R99k subject to you taking our finance through them. If you take finance through the bank, maybe they would charge you R105k as an example.

Bear in mind that the dealership gets kickbacks when they refer you for a loan. Also bear in mind that the dealership will NOT fight hard to get you a better rate. They submit your application once, get the rates, and give you the best one. What I had to do when buying my car was go back and say I refuse to accept this. I had to tell them to send one bank's offer to the other. That way, I think I got a 2% lower rate.

Some banks will not deal with you directly if the dealership is already dealing with them. My advice to you is to be tenacious and refuse to accept that rate. Make them work for your money. Do not back down until you have got at least 2 better offers.
 

supersunbird

Honorary Master
Joined
Oct 1, 2005
Messages
58,719
About to buy a Hyundai i20 (2009- 70000kms) for 99k. Applied for financing through the dealership, which was approved by ABSA. The dealership makes use of an F&I and insist that I need to go through the F&I and not directly through the bank. The F&I has offered me the following deal which seems insanely steep- on a 99k car, with the 17k deposit I am putting down, over 60 months, the installments will be R2080 @ 13.8% linked or R2150 @ 15.05% fixed. I am keen to stay firmly away from the linked option. I find these numbers to be high though- I am also not a first time buyer. Also, these F&Is- can the dealership insist I use them? And who pays them? Is this why my rates are higher here as they are taking their share too? If I get pre-approval from the bank and approach the dealership with that would they be likely to accept that and allow me to negotiate with the bank directly? Is this all very dodgy or normal practice? Any help anyone could offer would be amazing, thanks.

Depends on your credit history I'd say , as well if you are a first time car buyer. Do you know any of your credit scores?

First vehicle I bought at around R90 000 in 2008 was at 16% fixed. Second vehicle in 2010 for R55 000 was around 12.5% linked and most recent one in 2013 at R99 000 was 10.5% linked.
 
Last edited:

AliceJ

New Member
Joined
Apr 21, 2015
Messages
4
No I am not a first time buyer, not sure of the credit scores but I know I have good credit.
 

AliceJ

New Member
Joined
Apr 21, 2015
Messages
4
Just been told by the F&I that they do not like shopping around as it reflects badly on credit scoring!? Seems odd, is it true?
 
Last edited:

Pitbull

Verboten
Joined
Apr 8, 2006
Messages
63,440
Just been told by the M&I that they do not like shopping around as it reflects badly on credit scoring!? Seems odd, is it true?

That F&I is closing you hard :D

Yes it shows an enquiry on your ITC profile. But it does not affect your credit rating...
 

Fazda

Honorary Master
Joined
Apr 24, 2009
Messages
11,414
Just been told by the F&I that they do not like shopping around as it reflects badly on credit scoring!? Seems odd, is it true?

Absolute nonsense!

The job of the F&I is to shop around and get you the best possible deal!

It is also the job of the F&I to secure a decent kickback from the bank, wrt your deal. It sounds as if your F&I has forgotten the customer and is only thinking of the dealership and his/her particular commission!

You are fully within your rights to go to your own bank and try and get a decent deal.
 

Ancalagon

Honorary Master
Joined
Feb 23, 2010
Messages
18,077
Just been told by the F&I that they do not like shopping around as it reflects badly on credit scoring!? Seems odd, is it true?

Nope they are talking ***. Shop around until you are happy. I reckon you could easily get 1-2% off.
 

Hitchcock

Banned
Joined
Jan 8, 2015
Messages
487
To the contrary, what everybody told you here -

Firstly, there are two types of F&I's:

On most reputable dealership floors you will find the bank's own F&I. Some dealerships may have more than one F&I from more than one bank on their floor. These F&I's work for the bank and get paid by the bank.

Then you get independent F&I's - people who done the course and qualified and are appointed by the dealership. They work for the dealership and they get paid by the dealership.

And, yes, that F&I is right. 'Shopping around' will influence your credit rating. Not only will it mess with your actual rating, but fraud flags will also be triggered on your credit profile - in particular SAFPS - who has a built-in function in their system - linked with ITC to identify fraudsters trying to apply for finance at various banks.
 

Ancalagon

Honorary Master
Joined
Feb 23, 2010
Messages
18,077
And, yes, that F&I is right. 'Shopping around' will influence your credit rating. Not only will it mess with your actual rating, but fraud flags will also be triggered on your credit profile - in particular SAFPS - who has a built-in function in their system - linked with ITC to identify fraudsters trying to apply for finance at various banks.

Oh please. Yes credit checks show up, but the impact is very, very minor. I shopped around with both my mortgage and my vehicle loan, and my credit rating is still outstanding.

Applying for finance at multiple banks is not fraud. Identity fraud is fraud.

OP - shop around. Your credit rating is barely affected at all. I got my car loan in something like August last year. The next month, FNB were willing to give me a credit card with a rather high limit.
 

Hitchcock

Banned
Joined
Jan 8, 2015
Messages
487
Oh please. Yes credit checks show up, but the impact is very, very minor. I shopped around with both my mortgage and my vehicle loan, and my credit rating is still outstanding.

Applying for finance at multiple banks is not fraud. Identity fraud is fraud.

OP - shop around. Your credit rating is barely affected at all. I got my car loan in something like August last year. The next month, FNB were willing to give me a credit card with a rather high limit.

@OP - before you listen to all the 'clever guys' on this forum, here is an extract from Experian:

Will I be penalized for shopping around for the best interest rate?

"Too many inquiries may have a negative impact on your credit score. However, most recently developed credit scores recognize when a consumer is shopping for the best rates and either ignore multiple inquiries or count them as only one inquiry if they occur within a specific period of time. In such cases, shopping around will have little or no impact on a credit score."

And, here is from Transunion:

WILL I BE PENALIZED FOR SHOPPING AROUND FOR THE BEST INTEREST RATE?

Most scoring models take the appropriate steps to make sure your score is not lowered because of the multiple inquires that might occur in a specific time period as a result of shopping for the best terms in an automobile loan, home loan, or insurance coverage.

You can also conduct a google search on shopping around and your credit rating. You will find what you need to know about it.

And, I know for a fact that SAFPS raises an alert when a person has too many inquiries in a short period of time on ITC and banks refer these applications to their fraud departments. I also know that it indeed lowers your score, not by much, but it do.
 

supersunbird

Honorary Master
Joined
Oct 1, 2005
Messages
58,719
So as per Hitchocks quotes (despite his protestations to the reverse which confuses me a bit :confused:), Experian and Transunion say their newest scoring algorithms recognises shopping for a best interest rate, and it doesn't impact your credit score?

That's great! Alice, go shop around for a better deal if you haven't already.
 
Last edited:

Hitchcock

Banned
Joined
Jan 8, 2015
Messages
487
So as per Hitchocks quotes (despite his protestations to the reverse which confuses me a bit :confused:), Experian and Transunion say their newest scoring algorithms recognises shopping for a best interest rate, and it doesn't impact your credit score?

That's great! Alice, go shop around for a better deal if you haven't already.

That is true.

I know that the algorithm will increase your rating if the credit is reported to the credit bureaus within 14 days of your shopping spree. If you, after 14 days, do not sign an agreement with any single one of the people who conducted a check on you, or they do not report the credit to the credit bureaus, the consequences are that your credit rating will be affected negatively. I heard from SABRIC a while ago that some credit bureaus have lowered this time period to 7 days.

I am not sure which one applies to which credit bureau. But, just thought that you should know nonetheless.
 

Fazda

Honorary Master
Joined
Apr 24, 2009
Messages
11,414
So now we move from buying an Etios to being the world expert on F&I's and bank loans! :rolleyes:

In all my years in the motor industry, not once was anyone penalised for shopping around, and yes, if they came to me and asked me if they should just accept the deal that the F&I gave them, unless I knew that they were a credit risk and that the F&I had done everything in his power to get them through, I told them to by all means shop around!

Don't get taken in by this "two types of F&I" BS either - you will either be dealing with a financial person from the bank, or one from the dealership - they are both doing exactly the same work, however, one will be bank specific, and the other will be able to look at all the banks and shop around for you.

Just a question to the learned Mister Hitchcock - if an F&I shops around for you or you do it yourself, please let me know the difference, as you obviously know far more than anyone else around here.

Obviously financing the Etios has opened up a whole new world of expertise for you.
 
Top