Is this possible? To lock in percentage rates? I am mostly concerned about knowing what my monthly payments are going to be before i order the car. Thats the deciding factor is can i afford it per month. I assume that my MA can run my info when i order to calculate my monthly payment then we can actually do the $$ when it comes in. I can calculate everything except my APR right now but i dont know how to find that out without having him run my info. Sound like a good idea? I am just a young guy starting out from college so i dont have much money and i need to know that i can afford the car before i order it.

 

Hi Irish,


Having worked in the auto finance industry for years (even to a Texas based firm) let me answer that.

No. You cannot lock in a rate and auto rates move more than mortgage or other consumer rates. You will have to deal with rates as they are at actual time of purchase.

But- auto rates are primarily based on credit score. For best rates you need over 700. If you are a first time auto financer you will probably get nailed with a high rate, and the prevailling rate will not matter.

An exception to this are model specific marketing rates offered my the financing arms of the manufacture. You want certain GM or Ford products you can get them for 1% or less through Ford Credit or GMAC.

Won't happen on a Mini. BMW financing rates on Mini's are high.

The best way is a Credit Union. Get pre-approved credit wise prior to purchase. My best guess is that rates will not rise more than .75% (75 basis points) in the next eight months. Regardless it won't effect your payments more than $20, $30 a month worst case.

Also remember- at any dealer, including Mini, the Finance Manager is not your friend (although he/she are nice people with families to feed). It is their job to get you a higher rates because the dealer gets "participation" (spelled 'kickback') from the bank on dealer arranged financing. Also, it's their job to sell you extended warranties, toys, "mop & glo",scotch guard and everything else. This is known as "back-end" profit and usually exceeds the "front end" (vehicle mark-up) profit at most car stores.

 

I don't believe it is possible to "lock in" an auto loan rate like you can a mortgage. If you are figuring your loan so close that an small percentage increase in the finance rate will make it difficult to purchase the car, perhaps you need to look at a less expensive car, or postpone your purchase until your financial situation improves. Interest rates appear to be "creeping upwards" but there should not be any drastic increases in the time it would take for your car to be delivered. We are still a long way from the 12 to 14 percent car loans that us old timers experienced in the "good old days"!

 

Unless my dealer is "pulling my leg" I locked in when I ordered (I think they have paperwork done for 4.24%). They specifically said that I'd get the going rate at the time I ordered and even have paperwork ready for when the car is ready (I looked through my file the last time I was there). That said, I still called my credit union and have a secondary funding option ready to go (took about 20 minutes for approval).

 

How much you can afford is not determined by what your payment is! It sounds like you can't afford it if it's that tight. I recomend that you find 3 people who you respect and have handled money well, for many years and ask advice. Get advice from multiple sources who have your best intrest at heart. On the surface this sounds like you might be headed into some financial trouble if you dont act delibrately.

 

I Just taked to my MA today about this.

He said that the rate could be held for 60 days, so if my car was to be bought with in that time all would be good. Since my MINI is due in late July
Starting the finacing now would be pointless.

Good luck on your purchase.

 

If you have excellent or decent credit, you can obtain financing before hand from www.capitaloneautofinance.com.

Quick online approvals in 15 minutes and they mail you a "Blank Check Package" to you upon loan approval (Good for 45 days) that you can use same as a personal check (Not to be confused with a bank draft).

And have used them 3 times in the past and I can't say enough good things about their service. My MINI dealer gladly accepts Capitalone Auto finance blank checks and their rates consistently beat the best rates BMW financial has to offer

My '05 MCS was financed with them at 4.09% APR for 30 months. I put $10K cash down and financed the rest.

 

Mykl,

You should look into financing about 2-3 weeks before delivery of your MINI. I used Wells Fargo: 1) I already had accounts with them, 2) They matched the lowest rate I had on the table from CapitalOne. Obviously, the rate you are able to get depends on your credit rating. If I remember correctly, the rate and the check was good for 30 days after I received it.

Moritz did have one offer that was about a quarter of a percentage point lower than what I already had, it was only a couple of bucks a month difference on the payment so I opted to not manage another freakin' bank account. A couple of days before I picked-up Stella, I called Wells Fargo, they over-nighted me a check (blank which was approved to a certain amount). This worked great for me, I knew I was going to put a bunch down but I didn't know exactly how much. So, once I knew all of the numbers, I wrote the WF check for what I wanted to finance, then wrote a personal check for the rest.

The MINI was the first time I'd ever gone to a dealership with financing in-hand. I will do it from now on as you have a bit more leverage on the price of the car (not the case with MINI, but will work for most others).

 

I got my financing for my Cooper setup through State Farm, who also has a financing arm. What they do is pre-approve you into a rate category, thankfully I've gotten my credit cleaned up and pre-qualified for Category 1. That gurantees me their best rate when I complete the process. This will be the third new auto I've bought this way and it's the only way to go. As someone else mentioned, I think it puts you in a much better bargaining position, and removes the potential for a lot of "hidden" fees that some dealers try to sneak in on you, right or wrong.

Dan in Phoenix

 

First off, NEVER, EVER, EVER negotiate the price with a dealer based on monthly payments! That almost never ensures that you are getting even a remotely decent interest rate. Get them to give you their best right first, THEN figure out what that will make your payments look like. But don't let them throw a monthly payment number at you without knowing what the interest rate they're offering is...

Good alternate sources for an auto loan:
1. Credit Union, typically have some of the best rates around...
2. Your bank. While usually not as good as credit union rates they still will normally beat what your MINI dealer will offer you.
3. LendingTree.com. They're hit or miss, sometimes you can get a great offer from them, other times they're a joke.

If you qualify to use them, I wholeheartedly suggest USAA. Nobody could touch the rate they offered me, it took 10 minutes to apply, they sent a bank draft to the dealer, and then FedEx'd me the paperwork to sign already filled out when I took delivery of the car. They will also hold the rate for 30 days after which they may re-evaluate the interest rate and hold the loan offer open for 60 days. But you must be military, prior-military or closely related to a military member to use them.

One other thing, some dealers will balk at a bank draft from a seperate finance company and will try to push you into a loan with BMW Financing. Honestly, if they do this especially if they refuse to match interest rates... WALK AWAY!!! Do not let the dealer push you into an unfavorable deal.