Bank Car Loans

[SunnySideUp32]

Can anyone explain to me how a bank car loan works? I'm not in the market now because my scores are too low but I'd like to know for future reference. I've never financed or borrowed money for car. I've always found it easier to save for a few years and pay in cash for a reasonably priced new vehicle. But this go around, I don't want to dip into savings to purchase the SUV since we are reserving those funds for a house down payment after credit repair. My current vehicle blue book value is in the neighborhood of $12,000. I'll try private sale before I attempt trade-in. So other than my current vehicle, I don't want to pay any money out of pocket. So whenever I apply for a bank loan and assuming approval, do they send the check to the dealer or me? Do they put a lien on the title and would that cause my insurance premiums to increase?

 

Regardless of what deals the dealer may have, I won't finance through them.

[BRBiz]

You usually get the check and give it to the dealer although some dealers can get paid directly from local banks/CU's electronically and yes they will have a lien of the vehicle. It doesn't have any affect on your insurance besides requiring full coverage.

 

Why wouldn't you use the dealers financing if they can beat the rate?

[tomforr]

You usually get the check and give it to the dealer although some dealers can get paid directly from local banks/CU's electronically and yes they will have a lien of the vehicle. It doesn't have any affect on your insurance besides requiring full coverage.

 

Why wouldn't you use the dealers financing if they can beat the rate?

+1?? What do you have against the dealer? I have used both a CU and the dealer for the last 2 car purchases, the dealer beat the rate and it was actually an easier process than running a contract all over the place to take a check back from my CU.

[MarvBear]

You apply for an auto loan with your bank of choice. That lender will issue a sight draft, or a check requiring restrictive dealer endorsement, or instructions to the dealer to actually process a contract on their behalf.

(and record a lien)

 

 

If you don't have full coverage insurance, the lender will require you to increase coverage appropriately, If you don't have the appropriate coverage, then one could reasonably assume that your insurance premium would increase.

[SunnySideUp32]

You apply for an auto loan with your bank of choice. That lender will issue a sight draft, or a check requiring restrictive dealer endorsement, or instructions to the dealer to actually process a contract on their behalf.

(and record a lien)

 

 

If you don't have full coverage insurance, the lender will require you to increase coverage appropriately, If you don't have the appropriate coverage, then one could reasonably assume that your insurance premium would increase.

I have full coverage insurance which I already pay a pretty penny for. 100,000/300,00 for collision and the same amount for comprehensive so I'm not wanting to go above those limits. I surely know the importance of full coverage insurance especially after some creep hit us and ran and another uninsured motorist nailed us at a stop light from behind. My back has never been the same :-( Thank heaven I've always been a stickler for full coverage insurance. State Farm was there for us completely during both accidents and never increased our premiums. I love State Farm, never had a problem with them. Now let me go knock on wood!

[SunnySideUp32]

 

You usually get the check and give it to the dealer although some dealers can get paid directly from local banks/CU's electronically and yes they will have a lien of the vehicle. It doesn't have any affect on your insurance besides requiring full coverage.

Why wouldn't you use the dealers financing if they can beat the rate?

+1?? What do you have against the dealer? I have used both a CU and the dealer for the last 2 car purchases, the dealer beat the rate and it was actually an easier process than running a contract all over the place to take a check back from my CU.

If I could avoid going to the dealer altogether, I would. But I have to at least test drive the vehicle.

[CTSoxFan]

I wouldn't be so quick to dismiss the dealer, especially if you have credit issues. They can act on your behalf with lenders and maybe get you more favorable terms than you get on your own. I am not saying to not check out your credit union, just use all avenues available.

 

If you have had a bad experience at one dealer, just try another. I have bought a lot of cars and I have no issue walking out if I don't like the way things are going.

Edited May 25, 2013 by CTSoxFan

[BRBiz]

 

 

You usually get the check and give it to the dealer although some dealers can get paid directly from local banks/CU's electronically and yes they will have a lien of the vehicle. It doesn't have any affect on your insurance besides requiring full coverage.

Why wouldn't you use the dealers financing if they can beat the rate?

+1?? What do you have against the dealer? I have used both a CU and the dealer for the last 2 car purchases, the dealer beat the rate and it was actually an easier process than running a contract all over the place to take a check back from my CU.

If I could avoid going to the dealer altogether, I would. But I have to at least test drive the vehicle.

Don't possibly cost yourself more money because your worried about the dealer. Bring a friend or family member when you go car shopping, it always good to have another person with you if you don't like dealing with salesman and finance guys.

[SunnySideUp32]

I wouldn't be so quick to dismiss the dealer, especially if you have credit issues. They can act on your behalf with lenders and maybe get you more favorable terms than you get on your own. I am not saying to not check out your credit union, just use all avenues available.

If you have had a bad experience at one dealer, just try another. I have bought a lot of cars and I have no issue walking out if I don't like the way things are going.

I'm not attempting to get a loan until after all baddies are off my reports and increased credit score. I'm not getting stuck with an insane interest rate.

[SunnySideUp32]

 

 

 

You usually get the check and give it to the dealer although some dealers can get paid directly from local banks/CU's electronically and yes they will have a lien of the vehicle. It doesn't have any affect on your insurance besides requiring full coverage.

Why wouldn't you use the dealers financing if they can beat the rate?

+1?? What do you have against the dealer? I have used both a CU and the dealer for the last 2 car purchases, the dealer beat the rate and it was actually an easier process than running a contract all over the place to take a check back from my CU.

If I could avoid going to the dealer altogether, I would. But I have to at least test drive the vehicle.

Don't possibly cost yourself more money because your worried about the dealer. Bring a friend or family member when you go car shopping, it always good to have another person with you if you don't like dealing with salesman and finance guys.

My husband would be with me so I wouldn't be negotiating alone. It's a long story and even my husband don't quite understand it so its okay if you all don't. LOL

[mk_378]

If you're looking at new cars, and have good credit, a manufacturer's promotional APR might be offered, and it might be your best deal. That would of course require asking the dealer for it.