Wednesday, March 07, 2012

How many times is "doing what everyone else did" actually a good idea?

We recently went to buy a new-ish car, as the one we'd been driving for 12 years was having more and more troubles and was ending up in the shop about every other month for something or other.

So we did what everyone does: we went to the dealer and picked out a car we liked at a price we thought was good and then let the dealer try to get us financing.

And it was as we waited, and waited, and (wait for it) waited some more, that I began to think "You know, this is kind of dumb. There's no other thing that we do where we let the seller work out how we will pay for the thing we're buying."

I mean, when you buy a house, you offer a price and then go find someone to lend you the money. When you buy something on a credit card, you've got a deal worked out with the credit card company in advance as to repayment terms.

But buy a car, and you let the dealer pick your lender and negotiate with your lender for you. We weren't even in the room!

Now, I think we got a good deal -- but maybe we could have gotten a better deal, and maybe we could have avoided an hour or so of wondering whether we'd get approved and how much the interest rate would be (and consequently what our actual car payment would be.)

The situation is even worse if you don't have great credit -- I don't have great credit, but it's okay -- because if you have a few marks against your credit (who doesn't?) then you have to worry that you'll just flat-out be denied.

So the answer to that, I figure, is GET PREAPPROVED, and/or deal with reputable lenders who are used to dealing with people with less-than-Romney-esque credit ratings.

People like this:

Open Road Loans provides road loans, and seems like a good place to get started on your search for auto financing. Their road loans website has a blog with information that will be helpful to pretty much anyone who's interested in getting a car loan, and they've even got an app that you can download for free to figure out what kind of payment you'd be making on your road loans.

Overall, going to a company to get preapproval can take a lot of the hassle of car shopping out of the process. You'll know going in how much car you can afford, and you'll be able to easily comparison shop. Then, once you make your selection, you don't have to wait around while the finance manager "runs the numbers."

Open Road Loans can even help if you're in the market for a used car -- and that's tough to get loans for from conventional finance companies. But used cars, as everyone knows, are a better value, mile for mile -- the depreciation has been paid for by someone else, so you just get the car at it's actual value.

I probably won't be buying another car for another 12 years or so. But when I do, I'm going to get one of these preapproved road loans. If anything, it's that much less time drinking car dealer's coffee.

road loans -

1 comment:

Stephen Hayes said...

I went with our son to a car dealer who was offering a limited factory special. A few new cars were being offered at lower prices with the factory making up the loss to the dealership. We showed up with a cashier's check made out for the amount advertised in the paper. Our cash transaction still managed to take five hours while they tried to talk us into a whole host of extras.