Car finance questions?

[ISKOTB]

I was looking at a Toyota Camry SE 2020 with 30k miles. The Toyota dealership gave me the monthly options below for 60 months. After more negotiations, they came down to a total of $30k with $5000 down. So, I will be financing $25k. How much is my monthly payment base on his APR?
They gave me a second option for the 2022 Camry for the same deal but the LE edition with no leather seats.

Thank You

 

[jav6454]

My opinion is to never buy a car with a loan for more than 4 years. You'll end up paying almost double. That dealer is trying to suck your hard earned cash at 60+ months.

 

[ISKOTB]

My opinion is to never buy a car with a loan for more than 4 years. You'll end up paying almost double. That dealer is trying to suck your hard earned cash at 60+ months.

okay, I will see what is the 4 years payment.

 

[Sheepish-Lord]

At least the $30K lines up with used card values currently so you don’t seem to have a crazy dealer given the current times. There’s lots of auto calculators out there but Toyota is probably using their in house financing so you’ll need to get with them or use your own bank. However, one of the reasons they don’t show the APR is that it can be irrelevant and most customers only care about the monthly payment so based on your credit, finance terms, etc they’ll mess with the data until you get the payment you want if possible.

That being sad I personally don’t put money down on vehicles as it can be lost equity. Say you put $5k down and total the car a few months later. Your insurance pays you for the value of the car, say $20k, but since you paid $25K a few months ago you essentially lost $5K. Money down is a common marketing technique dealers use for leases which is laughable and even though you’re not leasing it’s something to think about. Now if you have a shaky credit or bad money management that you’ll spend the $5k on dumb stuff then go for it. Just be aware that if something happens or you sell the car later that $5k is essentially thrown away. Putting money into a depreciating asset isn’t the best idea typically.

 

[Ruggy]

Just a quick look at that would suggest to me that you are financing $30,778.87
When you've added in all the taxes and extras they come to over $5000 so actually your total is $35,778.67 it's written on the paper

I'm assuming they are saying you are putting $5000 down so you will be paying the $720-737 rate per month.

 

[Sheepish-Lord]

Just a quick look at that would suggest to me that you are financing $30,778.87
When you've added in all the taxes and extras they come to over $5000 so actually your total is $35,778.67 it's written on the paper

I'm assuming they are saying you are putting $5000 down so you will be paying the $720-737 rate per month.

Good catch. So OP is effectively paying $35K+ if they didn’t out anything down. You can get a new car for that and a Camry SE isn’t anything special so not worth $35K IMO.

Used cars are incredibly overpriced now so unless you can’t afford new or don’t have qualified credit then look somewhere else.

 

[Mousse]

Egads! Based on the data it looks like APR is 14-15%.😲 Ouch!😓 Looks like you'll be paying an extra $11-$13K when it's all said and done.

 

[TheYayAreaLiving 🎗️]

My opinion is to never buy a car with a loan for more than 4 years. You'll end up paying almost double. That dealer is trying to suck your hard earned cash at 60+ months.

okay, I will see what is the 4 years payment.

I agree with @jav6454. However, the 4-year payment will be a lot higher and they would want you to put down a lot of downpayment to cover the cost. I would ask them to give you a manager discount or something.

@ISKOTB Do you know what's the APR rate they are offering you?

 

[tobefirst ⚽️]

There shouldn't be a range. There should be a number. You should know three things: the amount you are financing, the term of the loan, and the interest rate. From there, it is just math. If you don't know all three of these things, the dealer is messing with you to increase profit.

I would suggest going to where you bank (and maybe another bank or credit union) and seeing what their interest rates are for the amount you're looking to borrow and the term of the loan. Get pre-approved for the car from an institution that isn't the dealership so the dealer can't give you anything worse.

And if you happen to be trading in a car – it doesn't look like you are – do the same here. Go to a place that will buy your car without selling you one (like CarMax) and get an appraisal there. Then go to the place you want to buy the new car from and don't take any less for your old one. In other words, negotiate the trade separately from the purchase.

 

[ISKOTB]

Just a quick look at that would suggest to me that you are financing $30,778.87
When you've added in all the taxes and extras they come to over $5000 so actually your total is $35,778.67 it's written on the paper

I'm assuming they are saying you are putting $5000 down so you will be paying the $720-737 rate per month.

They never ran my credit…etc. Since I have no car, mortgage or any finance so their banks will probably make me put 5k down. “ A min before I left the dealership a manager was trying to make me happy so they they came down to a total of $30k with $5000 down. So, I will be financing $25k. How much is my monthly payment base on the 25k?"
Total means all the added taxes, dealer fees....etc

 

[ISKOTB]

I agree with @jav6454. However, the 4-year payment will be a lot higher and they would want you to put down a lot of downpayment to cover the cost. I would ask them to give you a manager discount or something.

@ISKOTB Do you know what's the APR rate they are offering you?

I asked them that questions, they said they don't know their financial institutions manager that!?

 

[TheYayAreaLiving 🎗️]

I asked them that questions, they said they don't know their financial institutions manager that!?

It should be the dealership manager that should be able to honor you with a discount. I just bought a brand new Audi. I told them I was going to walk out but the dealership manager came and sat down. Talked to me for over 30 minutes, and he was able to give me a discount of $2000.00 on the baseline price. It's worth a shot asking for it.

The dealers can do a lot. They can honor the 0% APR rate for up to 72 months, offer discounts, free oil changes and so on.

 

[Mousse]

They never ran my credit…etc. Since I have no car, mortgage or any finance so their banks will probably make me put 5k down. “

That explains the high interest rate--about 15%. No credit can sometimes be worse than bad credit.😵 Y'all can figure out the APR using a loan calculator. Using the data from the picture...
$35,778 final price. Plug in 15% APR in the calculator and the numbers pretty much matches the monthly payment.
$30,778 ($5000 down) = $732 (60 months), $688 (66 months), $651 (72 months)
$27,778 ($8000 down) = $661 (60 months), $621 (66 months), $587 (72 months)
$25,778 ($10,000 down) = $613 (60 months), $576 (66 months), $545 (72 months)

A min before I left the dealership a manager was trying to make me happy so they they came down to a total of $30k with $5000 down. So, I will be financing $25k. How much is my monthly payment base on the 25k?"

Y'all looking at $600 for 60 months, if they don't jack up the interest rate because they dropped the price. Lots of finangling going on with car buying. If they lower the price, they'll raise the rates. If they lower the rates, they'll increase the price. They're gonna get their money one way or another.

 

[ISKOTB]

That explains the high interest rate--about 15%. No credit can sometimes be worse than bad credit.😵 Y'all can figure out the APR using a loan calculator. Using the data from the picture...
$35,778 final price. Plug in 15% APR in the calculator and the numbers pretty much matches the monthly payment.
$30,778 ($5000 down) = $732 (60 months), $688 (66 months), $651 (72 months)
$27,778 ($8000 down) = $661 (60 months), $621 (66 months), $587 (72 months)
$25,778 ($10,000 down) = $613 (60 months), $576 (66 months), $545 (72 months)

Y'all looking at $600 for 60 months, if they don't jack up the interest rate because they dropped the price. Lots of finangling going on with car buying. If they lower the price, they'll raise the rates. If they lower the rates, they'll increase the price. They're gonna get their money one way or another.

I have one CC and my credit score is 770. Is this not good enough?

 

[ISKOTB]

It should be the dealership manager that should be able to honor you with a discount. I just bought a brand new Audi. I told them I was going to walk out but the dealership manager came and sat down. Talked to me for over 30 minutes, and he was able to give me a discount of $2000.00 on the baseline price. It's worth a shot asking for it.

The dealers can do a lot. They can honor the 0% APR rate for up to 72 months, offer discounts, free oil changes and so on.

Yes, they dropped that Camry from that total of 35K to 30K and I got that from a sales manager. As I am walking out they said can you do 29,5K. I just left

 

[Mousse]

I have one CC and my credit score is 770. Is this not good enough?

Ah...that was just like when I brought my first new car. Good credit score, but never purchased a car or house before. Paying off a few thousand in CC debt is a different animal from paying off a $400K loans in the eyes of the bankers. First time I brought a car, they hosed me with the interest rates 8% (high for the time, since 2.5% was average for those with good credit). After you pay off your car, future car/house purchases should give you reasonable rates. My latest mortgage is 2.8% on my 3rd house. (Other people's wives collect shoes, mine collects houses😩.) That's lower than average APR, since I've a great credit history on big purchases (3 cars, 2 houses all paid off).

With your credit score, I'd get a loan from the bank for better rates.

 

[ISKOTB]

Ah...that was just like when I brought my first new car. Good credit score, but never purchased a car or house before. Paying off a few thousand in CC debt is a different animal from paying off a $400K loans in the eyes of the bankers. First time I brought a car, they hosed me with the interest rates 8% (high for the time, since 2.5% was average for those with good credit). After you pay off your car, future car/house purchases should give you reasonable rates. My latest mortgage is 2.8% on my 3rd house. (Other people's wives collect shoes, mine collects houses😩.) That's lower than average APR, since I've a great credit history on big purchases (3 cars, 2 houses all paid off).

With your credit score, I'd get a loan from the bank for better rates.

I got like 50K+ and I recently got a job with a decent salary but I want to keep my money for a house down payment next year. Should I ask my bank for a personal loan or a car loan?

I got this job about a month ago, should I wait you think?

Thank You!

 

[Mousse]

I got like 50K+ and I recently got a job with a decent salary but I want my money for a house next year. Should I ask my bank for a personal loan or a car loan?

If you plan on buying a house next year, having car payments will affect the you chances of getting a mortgage loan. OTOH, if your credit history showed that you have paid off a large purchase, it improved your chances of getting better interest rates.

As for what type of loan to get, ask the bank. They'll steer you in the right direction. Afterall, they want their money (with interest), not your car.

I got this job about a month ago, should I wait you think?

This is advice you should seek from family and close friends, not a stranger on the Internet.

 

[ISKOTB]

If you plan on buying a house next year, having car payments will affect the you chances of getting a mortgage loan. OTOH, if your credit history showed that you have paid off a large purchase, it improved your chances of getting better interest rates.

As for what type of loan to get, ask the bank. They'll steer you in the right direction. Afterall, they want their money (with interest), not your car.

This is advice you should seek from family and close friends, not a stranger on the Internet.

Thank You!

 

[glenthompson]

Plenty of calculators online to figure out payments. As mentioned you need 3 things, amount financed ($25k), interest rate (unknown), and term (typically 3-4 years). My credit union offers a used car loan for 36 months at just under 4%. That would be a monthly payment of around $735.

Best not to get financing from the dealer as they’re getting a cut on the loan. There are exceptions such as when we bought our Prius. Toyota offered a loan at 0.9%. For a 60 month loan my interest cost was just over $800. Made a lot more than that off my savings.

 

[jav6454]

okay, I will see what is the 4 years payment.

I would advice looking for an older model car and don't waste so much cash right now. With the recession looming in, car prices will have to go down. There is no way around that.

 

[TheIntruder]

Yikes. Unless the manufacturer is offering special deals through their finance arm, or there is some other good incentive to go with them, or dealer financing, you can find a better loan elsewhere, like a credit union. They are membership institutions, but many have very simple requirements, like simply living within a certain geographic region.

With financing in hand, negotiating the price of a vehicle becomes simpler, and there is less risk of games designed to confuse buyers, like obscuring the rate, and emphasizing monthly payment amounts, with terms designed to increase profit for them.

And as a depreciating asset, a car isn't something you want to borrow lots of money to buy, or overextend beyond what your finances can reasonably accommodate, just to have a nicer ride.

Car salesman don't enjoy a good reputation in popular culture , but the F&I guys are the real vultures at a dealership.

If you plan to buy a house, save your money for the down payment, keep steady employment for at least two years, and don't take out any big loans, or apply willy-nilly for unnecessary credit lines, just because they'll give you 20% off on a new sofa today by applying for their store card. Especially before you apply for that mortgage.

Mortgage lenders will be considering not just your credit score, but a variety of other factors to determine how much they're willing to lend you, and at what rate.

 

[JT2002TJ]

If you get a car, get it ASAP and pay off as close to 50% as you can by the time you are looking to buy your house. Although your income will be affected by the car payment, car loans are looked at as a requirement like school loans. As long as you are paying it, and can afford the mortgage, they wont hold it against you. Mortgage companies look at it like you cant work without a car... You need reliable transportation to keep your job. A broken down car, can lead to losing a job.

No one can afford to buy cars cash these days... The days of new mid sizes economy vehicles under $20k are done, cars have too much tech these days.

*The paid off amount of a car loan looks like available credit to you (debt to credit ratio). Paying off a car loan can make your score drop slightly, as it no longer appears as credit in that ratio.

 

[ISKOTB]

I would advice looking for an older model car and don't waste so much cash right now. With the recession looming in, car prices will have to go down. There is no way around that.

Will this be around Jan 2023 you think?

 

[ISKOTB]

If you get a car, get it ASAP and pay off as close to 50% as you can by the time you are looking to buy your house. Although your income will be affected by the car payment, car loans are looked at as a requirement like school loans. As long as you are paying it, and can afford the mortgage, they wont hold it against you. Mortgage companies look at it like you cant work without a car... You need reliable transportation to keep your job. A broken down car, can lead to losing a job.

No one can afford to buy cars cash these days... The days of new mid sizes economy vehicles under $20k are done, cars have too much tech these days.

*The paid off amount of a car loan looks like available credit to you (debt to credit ratio). Paying off a car loan can make your score drop slightly, as it no longer appears as credit in that ratio.

A friend just saw a 1.9APR off Toyota website for the new Camry. I called them and then they said they can give me that even with 0 money down if I want. They never said this when I went two days ago.