Posted on Sep 12, 2020
Are there any resources to assist an AD Army soldier to get a car loan?
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I have always paid cash for my vehicles. I am having to take a loan out for the first time, and I was just curious if there are any resources at my disposal that I may be unaware of.
Posted in these groups: 
Loans
Loans
Posted >1 y ago
Responses: 6
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Secure your financing through yourself or your bank before you walk into a dealer. Discuss the price of the CAR ONLY with the dealer, not any part of financing through the dealer. Do not make the financing a part of the price of the car. This hides the price of both the car, and the financing.
If you walk into the dealership with cash in hand the price he gives you should be the same as if you secured a pre approved loan via your independent bank.
If a 0% financing deal price of the car is higher than the cash price deal of the car then there is a hidden financing cost you are paying for anyway.
I build the excel model to break out the intrinsic hidden financing costs, but the easiest way to explain is don't get financing through the dealer. Whatever words are coming out of their mouth at the end of the day the prevailing auto loan lending rates apply the same everywhere.
So the only way to know the price of the car you are buying is to exclude mixing the loan and car costs together and being gamed with a lower monthly payment with a longer pay off period.
*****
Before the army, I was a financial analyst with a credit union, and we supplied lenders with financing for their customers. That's where I learned the fine details of the game. Our worst loans in our auto lending portfolio were always loans given through dealers and not out current customer base.
So while the dealer would finance you a car, they would turn around and then sell us the loan so they could have funds to lend for another car. So in between the dealer, and the credit union was their cut when to you the consumer don't see the actual additional cost of your deal.
Just don't finance through the dealer.
1) If the financing is in the price of the car if you pay the loan off early you still pay the interest that would have been paid in the future.
2) While it might seem you pay a higher rate from your bank you are seeing the actual cost of the financing that is not being hidden from you with dealer financing.
2a) In the event you pay the loan off early, it probably amortizes normally like a house loan. You pay the balance on what is owed for that car, and that's that. You stop paying interest.
If you walk into the dealership with cash in hand the price he gives you should be the same as if you secured a pre approved loan via your independent bank.
If a 0% financing deal price of the car is higher than the cash price deal of the car then there is a hidden financing cost you are paying for anyway.
I build the excel model to break out the intrinsic hidden financing costs, but the easiest way to explain is don't get financing through the dealer. Whatever words are coming out of their mouth at the end of the day the prevailing auto loan lending rates apply the same everywhere.
So the only way to know the price of the car you are buying is to exclude mixing the loan and car costs together and being gamed with a lower monthly payment with a longer pay off period.
*****
Before the army, I was a financial analyst with a credit union, and we supplied lenders with financing for their customers. That's where I learned the fine details of the game. Our worst loans in our auto lending portfolio were always loans given through dealers and not out current customer base.
So while the dealer would finance you a car, they would turn around and then sell us the loan so they could have funds to lend for another car. So in between the dealer, and the credit union was their cut when to you the consumer don't see the actual additional cost of your deal.
Just don't finance through the dealer.
1) If the financing is in the price of the car if you pay the loan off early you still pay the interest that would have been paid in the future.
2) While it might seem you pay a higher rate from your bank you are seeing the actual cost of the financing that is not being hidden from you with dealer financing.
2a) In the event you pay the loan off early, it probably amortizes normally like a house loan. You pay the balance on what is owed for that car, and that's that. You stop paying interest.
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