FINANCE RATES ON NEW VEHICLE PURCHASES

Many car buyers don't realize that they can negotiate the interest rate on their car loans. This is a very simple process and can save you thousands over the life of your car loan. You might be saying to yourself that if I ask my sales person the rate, how will I know they are telling me the truth about the rate that I was approved for. Just ask your sales person to see the bank approvals from the dealerships finance department. These documents are faxed to the dealer from the lending institution and they outline a couple of things. First it will specify the interest rate at what the lender calls "buy rate". This is the rate which the lender is offering you the customer. Now this is the important part. The dealer can add up to three percentage points onto this approved rate and that is how they make thousands off of you the consumer in obtaining your car loan. Lets face it all the finance manager of the dealership did was fax your application for the loan to the bank, and the dealer expects to make thousands for this simple task Now by asking for this one document you can then determine if in fact you might be able to get a cheaper interest rate through your own bank. Another great tip in having the dealer reduce your rate is to tell them that you plan on going to your own credit union. If the dealer agrees with you doing so then they are probably giving you the best rate possible. It still is not a bad idea to check with your own bank to see what car loan interest rate they can offer you prior to shopping for your new or used vehicle. Your bank will offer you, nine times out of ten, a much better rate than that of the dealer. The only time a dealer can drastically beat your own banks rate is when they are able to offer special finance deals through the vehicle manufacturer. These special rates usually require the buyer to forgo any rebates on the new car. Most manufacturers will only let you choose between their special finance deal or the special interest rate. Then you, the consumer are left with another task. Deciding which is the least expensive option for you to take. The rebate of the special rate. Check back and I will explain to you how to figure this out. It is quite a simple process and if you have any questions just email me at JOECARGUY68@AOL.COM.

INVOICE

Keep in mind all dealers retain factory invoices on all new vehicles they keep in stock. The invoice will have the manufacturer's name and the purchasing dealers name on it. If a dealer is showing you an invoice without these items it generally was created by the dealer to deceive you. In my experience dealers generally keep legitimate invoices in their posession. Included on a dealer invoice is a listing of the equipment that is on the vehicle along with options that the vehicle has been manufactured with based on how the dealer has ordered it. There is a base price MSRP and ans MSRP with the manufacturer installed option. MSRP stands for Manufacturers Suggested Retail Price. Next to the finalized MSRP with installed options there in the amount that the dealer has paid for the vehcile. This amount is called the invoice price. But keep in mind the dealer also has a hidden profit that not many of them divulge to the consumer. This hidden profit is called Dealer Holdback. This is ususally coded on the invoice like this dh 0890. This means that the particular vehicle has a dealer holdback amount of $890. This hidden profit is supplied to the dealership in order to assist the dealers in their overhead expenditures such as floor planning on the dealers inventory. (interest that is charged to the dealer while the vehicle is on the dealers lot.) Many dealers wont tell you about this amount. It can be negotiated to further discount the vehicle especially since dealers are eager to move as many vehicles as they possibly can to keep their floor plan expenditures low. Remember a business thrives not only on profits, it also must keep expenses low. So after seeing the dealers invoice ask him/her how flexible they are with negotiating the dealers holdback. If they are not then leave because I guarentee you there are many dealers out there who will give up the half the dealer holdback and others that will give it all to you. So by asking one simple question and arming yourself with a little knowledge you can save yourself close to $1000 off the purchase of your next vehicle. There are many other ways to save yourselves alot of money when purchasing your new vehicle. So keep a watch out for my bloggs and you will save yourdelf alot of hard earned money. Check back frequently and if you have any questions don't hesitate to ask and I will respond a quickly as possible. The Car Guy