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Krish

Approved auto loan from Penfed, can I return the check?

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When I joined Penfed, they preapproved for an auto loan at 1.99 for 48 months. But when I went to look for honda civic, dealer told me honda 0.99 for 36 months and 710 on experian is all I need.

Now I am tempted to go with honda financing and send the check back to Penfed. Can I do that?

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When I joined Penfed, they preapproved for an auto loan at 1.99 for 48 months. But when I went to look for honda civic, dealer told me honda 0.99 for 36 months and 710 on experian is all I need.

Now I am tempted to go with honda financing and send the check back to Penfed. Can I do that?

Just don't use the check...it is time sensitive anyways. Think PenFed is 90 days, after that, you cant use the check anyways. I've got 4 preapproval checks sitting on my desk for my new car. I'm only going to use 1(from PenFed) since they had the lowest rate.

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I had the same thing with Navy when I was car shopping. Just shred all the documents if you aren't going to use their financing. Just make sure you have the Honda lined up first :)

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When I joined Penfed, they preapproved for an auto loan at 1.99 for 48 months. But when I went to look for honda civic, dealer told me honda 0.99 for 36 months and 710 on experian is all I need.

Now I am tempted to go with honda financing and send the check back to Penfed. Can I do that?

Just don't use the check...it is time sensitive anyways. Think PenFed is 90 days, after that, you cant use the check anyways. I've got 4 preapproval checks sitting on my desk for my new car. I'm only going to use 1(from PenFed) since they had the lowest rate.

Right. It's not an actual check, it's a draft. The loan would only be setup by Penfed if the draft was presented to the dealer and it was processed.

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When I joined Penfed, they preapproved for an auto loan at 1.99 for 48 months. But when I went to look for honda civic, dealer told me honda 0.99 for 36 months and 710 on experian is all I need.

Now I am tempted to go with honda financing and send the check back to Penfed. Can I do that?

Just don't use the check...it is time sensitive anyways. Think PenFed is 90 days, after that, you cant use the check anyways. I've got 4 preapproval checks sitting on my desk for my new car. I'm only going to use 1(from PenFed) since they had the lowest rate.

Right. It's not an actual check, it's a draft. The loan would only be setup by Penfed if the draft was presented to the dealer and it was processed.

Even after I entered all the details regarding the vehicle I am about to purchase?

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When I joined Penfed, they preapproved for an auto loan at 1.99 for 48 months. But when I went to look for honda civic, dealer told me honda 0.99 for 36 months and 710 on experian is all I need.

Now I am tempted to go with honda financing and send the check back to Penfed. Can I do that?

Just don't use the check...it is time sensitive anyways. Think PenFed is 90 days, after that, you cant use the check anyways. I've got 4 preapproval checks sitting on my desk for my new car. I'm only going to use 1(from PenFed) since they had the lowest rate.

Right. It's not an actual check, it's a draft. The loan would only be setup by Penfed if the draft was presented to the dealer and it was processed.

Even after I entered all the details regarding the vehicle I am about to purchase?

 

 

As long as the dealer doesn't process the check, the loan will not be created. They even say in the documents that the loan is subject to a suitable vehicle (because people can change their mind, or some apply before choosing a particular car)

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When I joined Penfed, they preapproved for an auto loan at 1.99 for 48 months. But when I went to look for honda civic, dealer told me honda 0.99 for 36 months and 710 on experian is all I need.

Now I am tempted to go with honda financing and send the check back to Penfed. Can I do that?

Just don't use the check...it is time sensitive anyways. Think PenFed is 90 days, after that, you cant use the check anyways. I've got 4 preapproval checks sitting on my desk for my new car. I'm only going to use 1(from PenFed) since they had the lowest rate.

Right. It's not an actual check, it's a draft. The loan would only be setup by Penfed if the draft was presented to the dealer and it was processed.

Even after I entered all the details regarding the vehicle I am about to purchase?

Think about it this way...PenFed has all the info, but the dealer has not cashed the check yet. Once the draft is presented to the dealer, they fill out the info and send it to PenFed, that's how the dealer gets paid. You put in all the info so that way the bank knows whether or not they will finance the vehicle you are buying or not, so they can determine the value of the vehicle relative to the loan amount. If you are buying X vehicle that is worth 20,000 dollars, but you ask to finance 30,000...see where I am going?

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When I joined Penfed, they preapproved for an auto loan at 1.99 for 48 months. But when I went to look for honda civic, dealer told me honda 0.99 for 36 months and 710 on experian is all I need.

Now I am tempted to go with honda financing and send the check back to Penfed. Can I do that?

Just don't use the check...it is time sensitive anyways. Think PenFed is 90 days, after that, you cant use the check anyways. I've got 4 preapproval checks sitting on my desk for my new car. I'm only going to use 1(from PenFed) since they had the lowest rate.

Right. It's not an actual check, it's a draft. The loan would only be setup by Penfed if the draft was presented to the dealer and it was processed.

Even after I entered all the details regarding the vehicle I am about to purchase?

Think about it this way...PenFed has all the info, but the dealer has not cashed the check yet. Once the draft is presented to the dealer, they fill out the info and send it to PenFed, that's how the dealer gets paid. You put in all the info so that way the bank knows whether or not they will finance the vehicle you are buying or not, so they can determine the value of the vehicle relative to the loan amount. If you are buying X vehicle that is worth 20,000 dollars, but you ask to finance 30,000...see where I am going?

 

That makes sense. Thanks for the replies.

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Of course even though the interest rate decreases, your payment will be 23% higher per month. The difference between 1.99% and .99% annually on a $20,000 loan is less than most people realize. It's a marketing tool. Dealers actually make more money selling financing than they do selling the car.

 

Know all about the financing before you start. The good thing about pre-arranged financing is that the dealer can't bring out the old "four square." Regardless of how you purchase, I highly suggest you read this site, published by a former dealer:

 

http://beatthecarsalesman.com/school/index.html

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Of course even though the interest rate decreases, your payment will be 23% higher per month. The difference between 1.99% and .99% annually on a $20,000 loan is less than most people realize. It's a marketing tool. Dealers actually make more money selling financing than they do selling the car.

 

Know all about the financing before you start. The good thing about pre-arranged financing is that the dealer can't bring out the old "four square." Regardless of how you purchase, I highly suggest you read this site, published by a former dealer:

 

http://beatthecarsalesman.com/school/index.html

 

Over a period of both loans, I will save $500. I might have to payoff the loan within the next year, if I am going to the mortgage at the end of this year. I have a fixed price from the dealer for the civic I am interested in, incl of all taxes. I am tempted, but if I need to payoff the loan sooner, that wont save me anything...

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That "fixed price" will move dependent on other prices. As you say, if you pay it off early next year, the interest rate really means little to you. If you believe that the price is set in stone, then tell the dealer you really don't need his financing unless they throw something else in the mix; you have your own financing arranged. The average car salesman makes only $200 on selling the car and close to $1000 selling the financing. This article says $947. You'd be surprised what incentives they will throw in to keep that $947.

 

http://autos.yahoo.com/articles/autos_content_landing_pages/1415/where-does-the-car-dealer-make-money/

 

I recently purchased a new vehicle. I first negotiated the trade-in value, got it set in stone. Wouldn't even talk about anything else. Then second I established the price of the new car and made the dealer write it down. When I provided a check for the car, the dealer said, "I wanted to make money on the financing. We'll have to change some of the other prices." I made them stick to the offer.

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That "fixed price" will move dependent on other prices. As you say, if you pay it off early next year, the interest rate really means little to you. If you believe that the price is set in stone, then tell the dealer you really don't need his financing unless they throw something else in the mix; you have your own financing arranged. The average car salesman makes only $200 on selling the car and close to $1000 selling the financing. This article says $947. You'd be surprised what incentives they will throw in to keep that $947.

 

http://autos.yahoo.com/articles/autos_content_landing_pages/1415/where-does-the-car-dealer-make-money/

 

I recently purchased a new vehicle. I first negotiated the trade-in value, got it set in stone. Wouldn't even talk about anything else. Then second I established the price of the new car and made the dealer write it down. When I provided a check for the car, the dealer said, "I wanted to make money on the financing. We'll have to change some of the other prices." I made them stick to the offer.

 

That is exactly what I did. Got the deal in writing and got the dealer to agree that they wont pull any credit report and that I have arranged my financing. This was my idea to go with Honda Finance to save some bucks. But at the same time, if I payoff the deal early, I wouldnt need to go with Honda.

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That "fixed price" will move dependent on other prices. As you say, if you pay it off early next year, the interest rate really means little to you. If you believe that the price is set in stone, then tell the dealer you really don't need his financing unless they throw something else in the mix; you have your own financing arranged. The average car salesman makes only $200 on selling the car and close to $1000 selling the financing. This article says $947. You'd be surprised what incentives they will throw in to keep that $947.

 

http://autos.yahoo.com/articles/autos_content_landing_pages/1415/where-does-the-car-dealer-make-money/

 

I recently purchased a new vehicle. I first negotiated the trade-in value, got it set in stone. Wouldn't even talk about anything else. Then second I established the price of the new car and made the dealer write it down. When I provided a check for the car, the dealer said, "I wanted to make money on the financing. We'll have to change some of the other prices." I made them stick to the offer.

 

That is exactly what I did. Got the deal in writing and got the dealer to agree that they wont pull any credit report and that I have arranged my financing. This was my idea to go with Honda Finance to save some bucks. But at the same time, if I payoff the deal early, I wouldnt need to go with Honda.

 

One thing I've read that you should do is get the dealer to agree on the price of the car first -- THEN bring up that you have your own financing.

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That "fixed price" will move dependent on other prices. As you say, if you pay it off early next year, the interest rate really means little to you. If you believe that the price is set in stone, then tell the dealer you really don't need his financing unless they throw something else in the mix; you have your own financing arranged. The average car salesman makes only $200 on selling the car and close to $1000 selling the financing. This article says $947. You'd be surprised what incentives they will throw in to keep that $947.

 

http://autos.yahoo.com/articles/autos_content_landing_pages/1415/where-does-the-car-dealer-make-money/

 

I recently purchased a new vehicle. I first negotiated the trade-in value, got it set in stone. Wouldn't even talk about anything else. Then second I established the price of the new car and made the dealer write it down. When I provided a check for the car, the dealer said, "I wanted to make money on the financing. We'll have to change some of the other prices." I made them stick to the offer.

 

That is exactly what I did. Got the deal in writing and got the dealer to agree that they wont pull any credit report and that I have arranged my financing. This was my idea to go with Honda Finance to save some bucks. But at the same time, if I payoff the deal early, I wouldn't need to go with Honda.

 

One thing I've read that you should do is get the dealer to agree on the price of the car first -- THEN bring up that you have your own financing.

Yes, that's exactly what I did. Before price I negotiated trade-in. No use negotiating price if they weren't going to negotiate trade-in first. Then I negotiated price for he new vehicle. After both of those were complete I opened by folder and handed him a check. So that would be after the price of the new card and the trade-in were already written and established.

 

The link I provided gives an exact method to utilize.

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Speaking from my experience with PenFed, I was approved for a auto loan, received the check, didn't cash it and even called and cancelled it because the rate was beat from their 2.49% by my local credit union of 1.99% which still beat Land Rover's best tier rates of 3.99% on purchases, as I purchased one vehicle and leased 2 others same week, and yet they reported the loan on all 3 of my credit reports.. the representative stated that once the check is mailed it is consider an "active" loan and the payment date is not set until the dealer cashes the check and they must receive the title within 30 days of the check being cashed. So you may see the loan appear on your credit report.. I have a faxed dispute in on the reporting because it was not a true loan thus should not be reporting, and I only had the check 10+ days before it started reporting. Again, just my recent experience. It was easy to call and cancel, and they will tell you to shred.

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Talked to my guy at the dealership and told him that if the price is not going down by $400, I wont go with AHFC. He said he will "talk to his manager" .. lol

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