Interest rate

[anki]

my salesman quoted me 6.99% for 2018 X5, damn it bmw canada. It seems like they want us to buy the G05 instead, the last quote I got for new G05 is 3.24% 5Y

[Russmov]

The dealership closest to me has 2018's *starting* at 2.99%.

[RED_Y_]

Originally Posted by Hellrot

I got a rate of 2.3% in Nov. from a credit union. 800+ credit score though.

May be depends on the location, last time I checked I had credit score of 830.

[gqgambler]

OP is Canadian, so hard to compare rates across the border to US rates.

[homerjay]

We just bought a 2016 X5. $45k (incl tax and fees) @ 4.9% for 72 months. We were initially quoted 5.49% when we were pre-approved in late Feb. When we completed the transaction in early March, we were pleasantly surprised that the interest rate dropped to 4.9%. Dealership in Nor Cal.

[MrJayhawk85]

4.55% APR financing for up to 60 months on any new 2018 BMW X5 xDrive35i model. Rate is available from participating dealers to very well qualified customers with excellent credit history who meet BMW Financial Services credit requirements. For example, with $0.00 down payment, a retail installment contract on a 2018 BMW X5 xDrive35i with MSRP of $59,500.00 may be repaid in 24 monthly installments of $2,598.37 or may be repaid in 60 monthly installments of $1,110.61. MSRP excludes tax, title and license. Not all customers will qualify for down payment waiver or lowest rate. Other rates and payment terms available. Subject to availability. All credits offset MSRP. APR and credits valid through April 01, 2019.

This is from US Midwest BMW dealer as of tonite.

[FenixMike]

with high 700s credit scores and 70+ flawlessly paid accounts, the best I can get on a used vehicle at 72 months is 3.89% these days with credit unions, or about 5% with banks... interest is high and unless its a domestic car company that can't give away their vehicles, or a corolla, youre not going to get incentivized interest rates. New cars I think I can squeak off a half percent better, but with BMW id never buy new unless I leased it.

[brevets10000]

[QUOTE=but with BMW id never buy new unless I leased it.[/QUOTE]

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[Habs11]

Hate to be "that guy" but if you need 72 months or more to afford a car you are not looking for the right car. Heck anything over 48 months doesn't fly with me unless rates are so low it makes sense to extend it.

These all factor into a higher rate:
Lower credit score
Older car
Longer term

[W37V]

Originally Posted by FenixMike

with high 700s credit scores and 70+ flawlessly paid accounts, the best I can get on a used vehicle at 72 months is 3.89% these days with credit unions, or about 5% with banks... interest is high and unless its a domestic car company that can't give away their vehicles, or a corolla, youre not going to get incentivized interest rates. New cars I think I can squeak off a half percent better, but with BMW id never buy new unless I leased it.

+1
Bunch of credit unions offer these rate terms on used cars. New cars can be had for slightly less.

If you are good at negotiating, you can get get this rate even from major FI.

Get pre-approved from one or bank(s). Make sure they send you their approval letter specifying terms of the loan. Go to the dealership and use financing with them as a negotiation tactic. Dealerships make bunch of money through financing. So, just tell them you would finance with them if they can match or beat the best rate you have. If they can't beat the rate they need to sweeten up the deal on the price (maybe throw in something for free etc.). If you are good at games, you can potentially get both - cheaper price and better financing.

[W37V]

Originally Posted by Habs11

Hate to be "that guy" but if you need 72 months or more to afford a car you are not looking for the right car. Heck anything over 48 months doesn't fly with me unless rates are so low it makes sense to extend it.

These all factor into a higher rate:
Lower credit score
Older car
Longer term

Sometimes it's not about affordability, but about finance 101 (general rule):
Make all your payables as long as possible and your receivables as short as possible.

[AlpineX]

Originally Posted by W37V

Sometimes it's not about affordability, but about finance 101 (general rule):
Make all your payables as long as possible and your receivables as short as possible.

Maybe that's a fine strategy for a new or nearly new car that you are keeping 10 years or more. Otherwise you are at risk to have a real hard time getting out of a car when you want or need to. Negative equity in cars can be very ugly.

Additionally, I gravitate toward shorter terms to limit the interest and to obtain lowest rate.

[FenixMike]

I have to agree with both of you... personally I calculate what the interest will cost me for the duration of the loan against how much I'm saving with smaller payments. The one thing I do is I always put tax/title/license down, as well as any negative equity... but I look for the smallest payment I can get without sacrificing a large loss in interest, and then I typically pay more than the payment each month. More often than not, it's 60 or 72 months for me, with 72 months usually costing $200-300 more at the end of the loan, but saving $75-100 a month. That being said, I've yet to ever carry a loan to the end of the term, and I'm usually a few months ahead on payments.

[gqgambler]

Originally Posted by FenixMike

I have to agree with both of you... personally I calculate what the interest will cost me for the duration of the loan against how much I'm saving with smaller payments. The one thing I do is I always put tax/title/license down, as well as any negative equity... but I look for the smallest payment I can get without sacrificing a large loss in interest, and then I typically pay more than the payment each month. More often than not, it's 60 or 72 months for me, with 72 months usually costing $200-300 more at the end of the loan, but saving $75-100 a month. That being said, I've yet to ever carry a loan to the end of the term, and I'm usually a few months ahead on payments.

FenixMike hit the nail on the head. Remember there is no prepayment penalty for paying ahead or early. Just make sure extra money goes towards the principle. Many times I've done 60 or 72 months to get the lower payment and still paid off early in 4 years or less. I've done this especially when interest rates are below what I could earn investing the money for the future. I've even refinanced to take advantage of better rates or lower payments, and still paid off early from the original purchase terms. Unlike homes, there are often no refinance cost for doing a car loan so it cost you nothing. In one case I refinanced with my home owners insurance company and got gap coverage included on the load for free.

If it was about affordable, you shouldn't even buy a car. You should keep the existing car as long and reasonable as you can; extending the overall cost and investment in the car. And while many love leasing to get a new car every few years it's a complete waste of money on the consumer end; that's why the car manufacturers love and make money doing it.

[W37V]

Originally Posted by AlpineX

1. Maybe that's a fine strategy for a new or nearly new car that you are keeping 10 years or more.

2. Otherwise you are at risk to have a real hard time getting out of a car when you want or need to.

3. Negative equity in cars can be very ugly.

4. Additionally, I gravitate toward shorter terms to limit the interest and to obtain lowest rate.

Not everyone will agree with this, but it is my opinion. Also, what logic says that we should do, does not mean our heart follows.

1. Doing this on new very expensive car is almost very silly. New cars take largest depreciation hit ~25-50% within few years. Long term loan on used vehicle (unless you overpaid), will at least keep with with depreciation rate. Currently, our cars depreciate at rate of $500-700 per month (which is coincidentally the payment on about 35k, loan (which is almost what most older models are worth now.)

2. Getting out of the car is easy, but getting rid of the loan is difficult. (I know what you meant and I agree).

3.. Depends on #1. If you over paid, got new, didn't keep car long enough, or buy equity, yes you might be upside down on the car loan. Negative equity roll over is a trap that is very hard to get out of. Some dealerships use this information in order to get buyers to finance more expensive cars. For example... you have $2000 in negative equity on Accord LX and want a new Accord LX. Dealership might condition you to (over) buy by forcing you to get Accord EX-L or Pilot EXL (or whatever the top model is now). They consider this doing you a "favor". This scenario is even worse if you are buying a used car, since used car might not be as reliable and you might need to trade it in sooner than expected. Military, elderly, poor, and those with poor judgement are especially vulnerable to this.

4. Lower interest might not necessarily mean that you are saving money. It all depends on situation. If the rate difference between 48 month and 60 month term is .25%, then it's almost insignificant. Depending on the loan amount, the cost difference might be few hundred. However, if you have another loan that has high rate, you should use "savings" to make a payment on the high interest loan and truly save money.

There is bunch more, but I am just too lazy to type right now.

[AWF10M5]

IR are definitely not what they used to be. I have two of my cars at 1.9% which NO ONE can even offer anymore.

The norm I have seen is now anywhere from 3.5-6.0% which is crazy but then again look at whats happening in the usa government.

[deiselpwr]

5-6 plus seems to be the new norm. I miss the old days or 1.9 or 2.9

[parkstr8]

I did a purchase on my new 18 - got 3.9 for 72. I never keep a car longer than 24-30 months so I guess it doesn't really matter...lol

[FenixMike]

Originally Posted by AWF10M5

IR are definitely not what they used to be. I have two of my cars at 1.9% which NO ONE can even offer anymore.

The norm I have seen is now anywhere from 3.5-6.0% which is crazy but then again look at whats happening in the usa government.

The economy is strong... thats why interest rates are going up. They were artificially lowered to stimulate growth while the economy was slow, and since the last two years have been growing astronomically, the FED is "resetting" the market by returning them to where they should be.

[daytonaviolet]

Today's used car rates with my credit union. Rates Effective 3/8/2019. Not bad right?

Used Auto (2009 or newer)
Up to 125% of Blue Book
Maximum 125,000 miles 0 to 48 None 3.54%

Used Auto (2009 or newer)
Up to 125% of Blue Book
Maximum 125,000 miles 49 to 66 months None 3.64%

Used Auto (2009 or newer)
Up to 125% of Blue Book
Maximum 125,000 miles 67 to 72 months $10,000 For 72 Month Term 3.94%

Used Auto (2009 or newer)
Up to 125% of Blue Book
Maximum 125,000 miles 73 to 84 months $20,000 For 84 Month Term 4.74%

[luv135i]

Penfed has these rates for any used car. Doesn't matter the year or mileage unless you want 72months then it has to be 2014+
3.99/48
4.29/60
4.49/72
Rates are lower for new cars.

[X6carts]

Bmw did 0% finance on my X6, that was what made it affordable for me.
About £200 a month in interest saved over a 4 year period (pcp) and they threw in a £7500 deposit contribution. Another £12k in discounts off RRP and a GFV of £31k after 48 months.
That's before we go off the Brexit cliff!!
I'll never have another chance to get a car like this at this kind of money.