Financing

[Tremhunter]

Looking around for a good rate. Any suggestions appreciated. Thank you.

 

[AZTremor22]

Veridian got me 2.74% a couple weeks ago.

 

[Bakes]

Has anyone used ford financing recently?

 

[steamboatdevil]

I had 3.1 pre-approved for USAA and when I was in with finance the guy told me I HAD to use FMC financing at 5.5 to use XPLAN. Come to find out the dealer was lying to get a kickback from CapitalOne (who also had lower rates but not with a dealer kickback). Some dealers are so shady...

 

[Tremhunter]

Interesting. Hard to trust these guys geez. Talking with my salesman this morning he is asking me what rate I’m getting on my end.

 

[ChsTremor]

If you can get an account at a credit union they seem to offer the best rates. Here in SC you can get 2.25% at 60mo or 2.5% at 72mo. Putting down at least 20k with a credit score over 750.

 

[Tremhunter]

Veridian got me 2.74% a couple weeks ago.

Great call on Veridian. 3% 48 months. $4800 interest. Dealer suggested 72 months at 4.5%. Roughly $10,000.00 in interest. Best they had was 4%. Oh and they tried adding $2,200 for extended warranty without asking.
Took all I had to get them to send me the paperwork before I stopped in so I could comfortably look over numbers…..didn’t itemize all the adders I asked for. I don’t see where the x-plan pricing number is pointed out.
I’ve waited 5 months I’ll wait I few more days to get it all straight.

 

[Fatkid55]

Check out the local credit unions around you. I got loan from a small credit union for 2.19 for 72months. Granted the next buisness day it went to 2.49 (still is). I was searching high n low when the dealership said they were getting 3-4%. That was the best deal I found. Good luck

 

[PlumbTremor]

Yes definitely Look credit union. Last 2 trucks were through credit unions are great rates. PenFed was good and my tremor, the dealer hooked me up with a local credit union in Wisconsin called Landmark. Got 1.93% for 60 months. Put half down. Rate was the same all the way down to 36 months so just did the 60 and send extra every month. Nice at least seeing that lower payment each month just in case

 

[ChsTremor]

Check out the local credit unions around you. I got loan from a small credit union for 2.19 for 72months. Granted the next buisness day it went to 2.49 (still is). I was searching high n low when the dealership said they were getting 3-4%. That was the best deal I found. Good luck

I ended up with the 2.5 at 72. Will pay extra every month but the overall difference in interest isnt that much.

 

[steamboatdevil]

Great call on Veridian. 3% 48 months. $4800 interest. Dealer suggested 72 months at 4.5%. Roughly $10,000.00 in interest. Best they had was 4%. Oh and they tried adding $2,200 for extended warranty without asking.
Took all I had to get them to send me the paperwork before I stopped in so I could comfortably look over numbers…..didn’t itemize all the adders I asked for. I don’t see where the x-plan pricing number is pointed out.
I’ve waited 5 months I’ll wait I few more days to get it all straight.

My buddy works for a bank that financing to dealers and they pay good kickbacks to dealers for when they get folks to finance at a higher rate ... The higher the rate they lock them in, the higher the kickback. So finance guys will lie and claim they cant do any better when they actually have access to loans with much better rates. They just pick the loan with the biggest kickback and say that is the best that they can do. Often when you say you will use your own bank the dealer will suddenly "find" a better rate.
Unfortunately, I got taken by this scam when the deal insisted that Ford requires you to use FMC credit to get XPLAN. Total lie and they did not even get me a FMC loan.
Joke is on them because my buddy shared that you have to keep the loan for 90 days for the dealer to get any credit.. so I am going to refinance it just to spite the dealer.

 

[romerT]

My buddy works for a bank that financing to dealers and they pay good kickbacks to dealers for when they get folks to finance at a higher rate ... The higher the rate they lock them in, the higher the kickback. So finance guys will lie and claim they cant do any better when they actually have access to loans with much better rates. They just pick the loan with the biggest kickback and say that is the best that they can do. Often when you say you will use your own bank the dealer will suddenly "find" a better rate.
Unfortunately, I got taken by this scam when the deal insisted that Ford requires you to use FMC credit to get XPLAN. Total lie and they did not even get me a FMC loan.
Joke is on them because my buddy shared that you have to keep the loan for 90 days for the dealer to get any credit.. so I am going to refinance it just to spite the dealer.

That's called indirect lending. Every dealer has a bunch of banks and credit unions they are partnered with in order to make the financing process easier for customers and as a way to earn extra income for the store. The "Captive lender" is always the Mfg.'s lender i.e., Ford Motor Credit, GM financial etc. There are certain programs that do require a client to finance with the captive lender in order to receive certain discounts etc. However since "factory incentives" have pretty much ended since inventories have dried up due to covid, rebates and big discounts etc. have not been part of buying a new car or truck for the last couple years. Normally (pre-Covid) the captives almost always have terrible rates available in exchange for a big discount on the vehicle. That's why back in the day you could not get the 0% along with the 10-15k discount, it was one or the other.

The kickbacks you're referring to is called dealer reserve. For example, "Buy rate" 2.9% to dealer, dealer sells it to customer at 3.9% and makes a point in reserve. Max reserve by law is 2.5 mark-up on loans up to 60 months. 2 points on loans up to 75 months in most cases and 1.5 on 84 month loans in most cases.

On a 70k truck assuming someone financed say 75k and the dealer held held 2.5 points, the dealer would make approx. $2200 reserve (depending on the "split" percentage with that particular bank)

If you think that's unfair, the max allowed mark-up on recreational vehicle loans is like 7 points.

That said, big Gov has been on the attack against dealer reserve for years without much success. What lot of banks and credit unions do now is just pay what is called a "flat". That's when a bank or CU issues what is called a buy/sell approval meaning no markup is allowed but they'll pay a percentage of the amount financed to the dealer for assigning them the contract. Most flats right now vary between 1 and 5% of the amount financed with the vast majority being in the 1% to 3% range.

Dealers hate when you pay cash or bring your own loan because they make no money of the financing end of the transaction unless they sell you back end product. So please don't ever walk into a dealership and ask for a discount because you're a cash buyer. that's not a good strategy.

Unfortunately there are still a ton of shady dealers trying to operate like it's 1990 and pull the wool over peoples eyes. Bottom line is all of this information is readily accessible to anyone willing to educate themselves online and find it before they go in to buy.

A good approach is always telling your dealer up front if you're pre-approved at your own bank and ask if they can be competitive with that rate. In a lot of cases they may even be signed up with your bank or CU for indirect and be able to just send it over to them, collect their flat, give you the same rate you were already quoted and save you the hassle of going back to your bank to sign docs and get the check.

 

[steamboatdevil]

That's called indirect lending. Every dealer has a bunch of banks and credit unions they are partnered with in order to make the financing process easier for customers and as a way to earn extra income for the store. The "Captive lender" is always the Mfg.'s lender i.e., Ford Motor Credit, GM financial etc. There are certain programs that do require a client to finance with the captive lender in order to receive certain discounts etc. However since "factory incentives" have pretty much ended since inventories have dried up due to covid, rebates and big discounts etc. have not been part of buying a new car or truck for the last couple years. Normally (pre-Covid) the captives almost always have terrible rates available in exchange for a big discount on the vehicle. That's why back in the day you could not get the 0% along with the 10-15k discount, it was one or the other.

The kickbacks you're referring to is called dealer reserve. For example, "Buy rate" 2.9% to dealer, dealer sells it to customer at 3.9% and makes a point in reserve. Max reserve by law is 2.5 mark-up on loans up to 60 months. 2 points on loans up to 75 months in most cases and 1.5 on 84 month loans in most cases.

On a 70k truck assuming someone financed say 75k and the dealer held held 2.5 points, the dealer would make approx. $2200 reserve (depending on the "split" percentage with that particular bank)

If you think that's unfair, the max allowed mark-up on recreational vehicle loans is like 7 points.

That said, big Gov has been on the attack against dealer reserve for years without much success. What lot of banks and credit unions do now is just pay what is called a "flat". That's when a bank or CU issues what is called a buy/sell approval meaning no markup is allowed but they'll pay a percentage of the amount financed to the dealer for assigning them the contract. Most flats right now vary between 1 and 5% of the amount financed with the vast majority being in the 1% to 3% range.

Dealers hate when you pay cash or bring your own loan because they make no money of the financing end of the transaction unless they sell you back end product. So please don't ever walk into a dealership and ask for a discount because you're a cash buyer. that's not a good strategy.

Unfortunately there are still a ton of shady dealers trying to operate like it's 1990 and pull the wool over peoples eyes. Bottom line is all of this information is readily accessible to anyone willing to educate themselves online and find it before they go in to buy.

A good approach is always telling your dealer up front if you're pre-approved at your own bank and ask if they can be competitive with that rate. In a lot of cases they may even be signed up with your bank or CU for indirect and be able to just send it over to them, collect their flat, give you the same rate you were already quoted and save you the hassle of going back to your bank to sign docs and get the check.

Great info thanks.. My main issue was lying to me saying I had to use Ford financing to get xplan and could not use usaa. I actually sounded plausible to me... The only story I woold have belived...

 

[Tom429]

Credit Union’s seem to have the best rates right now. Since my delivery date keeps getting pushed back, but it’s supposed to be at the dealership on 5/31 , I secured financing yesterday through Franklin Mint Federal Credit Union @ 2.24% for 72 months. Ford was offering me 2.9% for 60 months

 

[Mcrog]

Has anyone recently financed through Granger? Curious how their rates are for everyone.

 

[Cranbery]

Has anyone recently financed through Granger? Curious how their rates are for everyone.

I got 2.5/72 from them in February. 800 score.

Outside of USAA, some other special lender, or a promo deal, about 2.3-2.5 is the best you can get in the market right now.