just got back from the dealer and let me just say i was more then shocked by what they came to me with. let me just get right to the point, their offer up front was 750/mo for 72 months. That comes out to over $52000 for an 05 coupe invoiced at under 34k. i almost ****, there had to be a mistake. the numbers they gave me show this.
price: $37,680 ( told me they would only give me 4k for my 96 cobra HAHAHAHA i owe 6500 wanted at least within 500 of that per kbb trade in value dont have anything else to put down, so they gave me a 2500 discount off sticker but owed 2500, tried to screw me there as well)
APR: 9.9% i have bad credit but this is pretty high i think
finance charge w/ taxes included : almost $15k.. (are u serious????????)
so in the end they wanted $52k for an invoiced $34k car. i laughed in the guys face and walked out! is there something wrong here or do these #'s really work out? i am very very confused! i fiured i would pay no more then 40k out the door and no more then 500/mo for 72 mos. opinions and comments more then welcome!
-Adam

 

First, most ppl dont include the finance charges into their "out of door" price, just because everyone's credit history are different.

Second, to get 500/mo for 72mos? it have to be 32K financed with 4% rate, or only 27k with 9.9%!

Third, if its 05? it should be 1k under invoice, so the sale price on that car should be less than 33k.

Now let work numbers lil bit, say sale price of car is 33k even and add 10% for sale tax and DMV fees, its at 36.3k, with your negative trade of 2500 and no down payment? its at 38800 financed! with that, the monthly payment is 716/mo for 72mos with 9.9%, or 607/mo for 72mos with 4% rate...unless you planning on coming up with rather large down payment(7k~12kish), the 500/mo is almost impossible.

 

how does the apr work? what is it off of? i dont see how in the end i end up paying over $50k for a $34k car?

 

hehehe...first you are assuming that they sold the car at 34k, in your post, you said they give you 2.5k off but you are 2.5k up side down on your trade, so basicly they sell you a G for MSRP, which is 37680, plus sales tax and DMV fees, I figure them to be at 10% so its 41448 financed with 9.9%? you actually paying over 55k, so they must inculde the tax and DMV into the sale price, than add 2.5k for your trade.

The APR is off the amount financed.

 

but my question is how does the apr work? do i pay 9.9% of the sales price every year? or what? how is everyone paying under 36k out the door or whatever i am very confused!!

 

they didnt include the finance charges! or some states have lower(or none) sales tax rate than others...as how APR works? I will let someone else answer it, its some what complicated to explain.

 

so basically when everyone buys these cars, they're financing them for almost 50k? i figured it would be another 3-4k on top of the sale price and then divide into the payments?

 

For me? I will be ending up paying around 45k when I paid it off in 5 years, when sale price of my car was 34518...keep in mind that you dont have down payment and your interest is quite high for today's standard, it would help if you have few grands for down payment, cus at 9.9%? its 18.47 per 1k borrowed for 72mos, so if you have 5k down, you would be paying 92 dollar less per month, or try get yourself a better rate, assuming you financed 35k, at 5%, its 16.10 per 1k borrowed, it will save you 83 per month and close to 6k for life of the loan! as oppose to 9.9%

Using 35k borrowed? for 5% rate, you are paying 5500 for finance charges and at 9.9%? you are paying 11.5k on finance charges alone, plus you are paying tax, DMVs and your trade-in, so 52k isnt far fetched idea when the invoice of car is 34k

 

damn this sucks, theres now way i can see myselfpaying that much for this car. i want it soo bad, but the charges are just wayyy too much, i'll see if other dealers can give me a better rate. if not im gonna have to wait ahwile and save up. this sucks, thanks again though(for killing my dreams of a G..lol j/k)
-Adam

 

well i am just about to sell my car and will have a lil over $2k to put down... what will my charges be and monthly payment be now?

 

give this site a try, let's you calcuate your payments..etc
www.bankrate.com/brm/calculators/autos.asp

 

You should get your credit in order and save a couple grand for a down payment. Anybody who even CONSIDERS financing a car at 10% interest for 72 months deserves to get screwed like that.

 

buy a used 03 or 04. thats what i did.
that'll easily get you under 500 and maybe for only 60 months!
but paying 10% for 72 months is insane...a waste if you ask me.

 

i think thats exactly what i will do, but i will make the dealer put the 05 wheels on there!

 

You see such a huge hit for several reasons.

1. The 72 month finance window means your $40,000 debt is compounded for a long, long time.

2. The 9.9% rate is pretty bad. Compound interest is really rocking your world.

3. Your credit score is what earned the 9.9 rate, in all likelihood. Go look it up. Pay the $30 from (blah)creditreports.com to get all three scores with three credit histories. I do that every 12 months, from whichever online site gives me the best deal. Google can find you a bunch of services.

I took the liberty of creating some loan schedules for you. Please take a look at http://www.hollinger.net/files/nazty..._schedules.pdf for information.

Here's a sample graph from the schedules... I assumed a $40,000 loan.


The blue line indicates how much of your monthly payments is going toward the principal of your loan (the 40k in this example). As you can see, out of your $8,828 paid yearly, in the first year, nearly 40% of it is going toward your interest. Click into the PDF for actual numbers, and labels in the chart.

As you can see, your interest rate is primarily what kills you. I generated 6 graphs, for four, five, and six year loans, with 9.9% interest, and 2.9% interest. The 2.9% rate is what I got for my loan in February, 2005.


To give you a comparison, I have a credit score of 770 (or 780 according to Equifax iirc), and qualified for 2.9% back in February. I "paid" $32,447 for my 2005 Sedan (Premium C, splash guards, trunk mat <-- trunk mat's a rip-off), and had an "out the door" price including TT&L of $35,760. My loan schedule is up at http://www.hollinger.net/files/my_loan_schedule.pdf . Notice I pay < $2700 in interest over the term of my five year loan. You pay more than that in the first year alone of your proposed loan from the dealer.

You should look into a credit union or a bank to finance your vehicle if your dealer will not budge. 9.9 is very much going to hurt over six years. For that matter, why are you financing over six years? Does approximately $100 / month make that much of a difference in your month-to-month cash flows?


If you want me to re-run the graphs with "real" numbers for your 2003 or 2004 with a down payment, provide the loan amount you'd need including TT&L (your "out the door" price as its commonly known), down payments, rate, and loan length and I'll post back in the thread with the appropriate reports.

~ Mike Hollinger