Car loans and interest rates

[Guest guardhopefull]

I’m probably getting ready to buy a new or used car. Is there any extra benefit to being in the military when I go check out loans? Such as: better availability of interest rates or just a company I should check out (beyond the dealers finance department) for getting a loan?

Since we are on the subject, does anyone have an opinion on buying now verses buying in 1.5 years from now? Just wondering if everyone is under the opinion that the interest rates might be a bit higher by the middle of next year.

Thanks!

[Guest Wxpunk]

Pentagon Federal Credit Union was where I got my first car loan. They have pretty good rates for military. That said, if you buy a new car from a dealership, you can usually get a better promotional rate, provided you have the credit to back it.

Check out this website to prepare your attack on a new car dealership: Edmunds

-------------

Wxpunk

[Guest dbuxton]

USAA hooked me up pretty good with some fixed interest rate loans on my two vehicles. You can usually get a better rate for a new car versus used. For example, my 2003 Tundra was financed through Toyota from the start (big mistake!) at 9.9%, I then refinanced with USAA at 4.4% fixed (would have been 3.9 had I started with them). Rates have gone up a little since last year, but USAA is very dependable and the customer service has been top notch.

Sorry to sound like I'm giving a sales pitch. USAA is only available for military personnel and I've been more than satisfied with their banking and credit card services. Their mutual funds and auto insurance rates aren't terribly great, however.

[ 20. March 2005, 12:28: Message edited by: Dyess Monkey ]

[Guest C-21 Pilot]

I second the motion on USAA...

I have ALL of my finances, insurance, future mortgage, etc through them. Top notch service and rates, no ATM fees ANYWHERE, available 24 hrs, etc.

I recommend getting approved FIRST before you go to the lot. You have much more barganing power, and you can set your own payments...somewhat. Not only that, most car dealerships have their "own" financial services through several banks that give them kickback for throwing business their way (but watch the interest rate jump approx 0.5%).

With regards to buying now vs buying later, here's my take on purchasing a new vehicle. You should know that as soon as you take the car off the lot (title in your name), you lose an average of 10% of the total resale value (that's with nothing down). That being said, is it a true advantage to buy now (as a 2Lt...I'm assuming you are), or to wait a bit when you make 1st or Capt and you have a bit more Benjamin's to throw around.

I'd recommend to wait, but I also recall when I had my eyes set on my Z71 tahoe...and it "had" to be mine.

Good luck, and do the research.

[Guest pilot2B]

USAA... I don't know at what point you are at in your military career, but they have a pre-comission loan you can get. You are allowed 25,000. This means if your car loan is less you can get the rest cash. I scored a 3.5% fixed and took the whole amount. I used it to start my IRA, gambling that I would make more then 3.5%on the extra money. This was back in October and I have made 28% on my investment. A little off subject but just something for you to think about.

Also, have you considered leasing a car. I know some folks say that it is the worst way to go, but if you plan on getting a new car every couple years it is the way to go. You can lease a much more expensive car then you think you can afford then you can finace w/a traditional loan. So make sure you look into both.

Interest rates are definitely going up, but you would be surprised how little it will matter from now till then. I think a two percent increase will cost you like 5 more dollars a month.

USAA - www.usaa.com 1-800-531-2265 -

I recommend switching all your accounts to them. They save me tons a year on fees.

Geeze, seems like my BA in Finance came out a little there....

CHEERS, P2B

[drewpey]

Originally posted by guard/reserve hopefull:

I’m probably getting ready to buy a new or used car. Is there any extra benefit to being in the military when I go check out loans? Such as: better availability of interest rates or just a company I should check out (beyond the dealers finance department) for getting a loan?

Since we are on the subject, does anyone have an opinion on buying now verses buying in 1.5 years from now? Just wondering if everyone is under the opinion that the interest rates might be a bit higher by the middle of next year.

Thanks!

USAA is the greatest. You can do anything and everything from their site. Lots of benefits to take advantage of...check it out though, you won't regret it!

(I know I sound like a salesman now)

[Guest Walter_Sobchak]

Ditto for everything good mentioned about USAA above.

[Guest guardhopefull]

Thanks for the insight. I took a look and registered on the USAA site. Very user friendly and a good loan calculator. What's funny C-21 is I know exactly what your talking about when you mention the new car loosing value when you drive it off the lot. Yet when I go to buy a slightly used car at the dealer they seem to add darn near all that cost right back on. I’m shopping foreign cars so the value always holds higher. Looking at 4 door Accords right now and liking them.

[WHAP]

check the dealerships too, i got mine financed with chrysler at 2.9 fixed, so you can find deals like that sometimes

[Guest rlb]

I bought a 2005 4 door Accord a few months ago, and I love it. It's a great car. They (Honda)have pretty good rates--as low as 1.9, but you have to have had a car loan before. I never have, so I went with USAA. And yeah, I wanted a used one but could get a new one for like 1 or 2K more which was worth it to me.

[Guest C5Heavy]

Dodge had some good deal (depending on credit which was not too stringent) @ 2.0% for 5 years. Just shop around for dealership doing some promotions. I know a guy who got 1.8% with GM financing and he bought a Silverado. While USAA is awesome (got a 5/1 ARM) on a mortgage at 5% last yr, on the automotive side, it's worth to check the local ads to see who is doing what.

[Guest guardhopefull]

C5 Heavy

I PM'ed you on a different subject (T-6 Sim),please let me know if you got it, Thanks.

[Guest C5Heavy]

Hopeful,

I will get the T-6 and put it where you guys can download it. There are two versions

[JS]

Originally posted by pilot2B:

USAA... I don't know at what point you are at in your military career, but they have a pre-comission loan you can get. You are allowed 25,000. This means if your car loan is less you can get the rest cash. I scored a 3.5% fixed and took the whole amount. I used it to start my IRA, gambling that I would make more then 3.5%on the extra money. This was back in October and I have made 28% on my investment. A little off subject but just something for you to think about.

Also, have you considered leasing a car. I know some folks say that it is the worst way to go, but if you plan on getting a new car every couple years it is the way to go. You can lease a much more expensive car then you think you can afford then you can finace w/a traditional loan. So make sure you look into both.

Interest rates are definitely going up, but you would be surprised how little it will matter from now till then. I think a two percent increase will cost you like 5 more dollars a month.

USAA - www.usaa.com 1-800-531-2265 -

I recommend switching all your accounts to them. They save me tons a year on fees.

Geeze, seems like my BA in Finance came out a little there....

CHEERS, P2B

I thought that low-interest $25K loan from USAA was only for Academy grads once they graduated. Does anyone know if it is available to any officer?

[Guest lightning4eva]

I got about 24,000 in August of 2004 and my Graduation date is May 21, 2005. You can get it as long as you are garenteed to graduate. If your in ROTC your commander will just have to sign something saying this.

I got

$5,000 personal unsecured

and

18,050 for my 2004 Nissan Sentra SER Spec V

I haven't even made a payment yet...but will be doubling up after commisioning (0-1 w/4 yrs TIS )

25,000 is the max

I could have gotten a 23,000 car and 2,000 personal...

what eva works for you

[Guest guardhopefull]

Well I took the plunge. New Accord EX: 5-speed, leather, and all the bells and whistles. Honda had 2.9% going and I haggled the dealer into knocking off $1800 if I put 2K down. Felt like a good deal when I researched it on Edmunds and Kelly blue book and spoke to a buddy who sells Toyota's. Not that I will ever know, the wife gets it and now I get the "old" car. Ah the wonders of marriage!

[zrooster99]

Not that I will ever know, the wife gets it and now I get the "old" car. Ah the wonders of marriage!

The key is to buy a car that she doesn't like to drive, then put REALLY loud pipes on it so she'll never want to drive it. :D

Worked for me any way.

[Tonka]

*bumb

What's the latest, best place, or best rate to get a new or used vehicle loan? Last time I did it, USAA matched a local credit union rate... but that was 5+ years ago.

[BFM this]

NFCU

[MooseClub]

47 minutes ago, Tonka said:

*bumb

What's the latest, best place, or best rate to get a new or used vehicle loan? Last time I did it, USAA matched a local credit union rate... but that was 5+ years ago.

I think you answered it. I’d start with credit unions then check with USAA. Credit unions are often where you’ll find the lower APR 

[HeloDude]

I would strongly advise not to take out a loan to purchase a car.

[Standby]

51 minutes ago, HeloDude said:

I would strongly advise not to take out a loan to purchase a car.

I hope this is sarcasm. 

[HeloDude]

43 minutes ago, Standby said:

I hope this is sarcasm. 

Not at all.  

 

 

[raimius]

31 minutes ago, HeloDude said:

Not at all.  

 

 

With inflation and loan rates being potentially equal to each other, you aren't losing any buying power.  You'll probably do better putting the money in the market and taking the loan at ~3%. (The market is admittedly a gamble, but taking the historical averages into account, it's not a bad bet.)

[pawnman]

2 hours ago, HeloDude said:

I would strongly advise not to take out a loan to purchase a car.

Thank you, Dave Ramsey