Subaru Ascent Forum banner
1 - 20 of 35 Posts

·
Registered
Joined
·
27 Posts
Discussion Starter · #1 ·
Hi everyone,

It is great to be here! I have learnt a lot in this forum, and am about to pull the trigger for my 1st Ascent and my first car in the next few days.

I have a question about mortgage that nobody seems to talk about. If you settle down on a price with a dealer, where do you get the loan from? the same dealer or from a 3rd party? Is there any dealer fee associated with it (btw I am in NJ)? I am planning for 0 down with monthly loan payment. I guess that monthly number could be a good metric for overall cost of the purchase.

Thanks,

DL
 

·
Super Moderator
2019 Ascent Touring (CWP)
Joined
·
3,843 Posts
The dealer, banks and credit unions are all sources for auto financing. I personally use a credit union. Your personal credit score is also going to factor into both your loan source and your loan cost.
 

·
Registered
Joined
·
27 Posts
Discussion Starter · #3 ·
Thank you Jim.

I am just wondering how the process is like. Let's say I am going to finance through the dealer, because Subaru now has promotional 3.49% APR and it is also convenient. Do I have to pay extra fee (e.g. bank fee, origination fee, or doc fee) for such loan?

Thank you!

DL
 

·
Registered
Joined
·
88 Posts
There typically isn't any upfront fees and keep in mind that 3.49% APR with Subaru is with "qualified credit" (i.e. you need to have "good" credit score typically). The size of your loan and your APR is going to depend on a combination of your credit score and your income. I would suggest getting a free credit report up front in case you don't know what yours is (see https://www.consumer.ftc.gov/articles/0155-free-credit-reports). I would also start with your Bank or Credit Union first to see what they can offer you (it could be a better deal than the dealer offers).

Also, keep in mind running your credit for a loan dings your credit score. That said, multiple loan applications (i.e. shopping around) in a short time typically counts as a single ding.
 

·
Registered
Joined
·
27 Posts
Discussion Starter · #5 ·
Those are very nice suggestions. Thank you! I will make sure I shop around to avoid many hard pulls of my credit report in a short time.

I hope my credit score (~800) and income should be qualified for 3.49%. The reason I am looking to dealer finance in the first place, is my local credit union could only do as good as 3.49%. So I would prefer loan from dealer finance, if there is no upfront fees.
 

·
Registered
Joined
·
1,020 Posts
It's a good idea to come into the dealer with a loan aleady in place from a bank or credit union. It will give the dealer a number which they will try to beat. Let's say you come in with a 3.49% loan in your back pocket. The dealer may counter with 3.25% +/-. If you don't come in with financing in place, then you get what they offer you, which might be decent, but could be better.

If you take the lower dealer offer, then it's a good courtesy to inform your bank/CU that you will not be using their financing. They're used to being "rejected" - It comes with their territory. It also keeps them for hounding you if you inform them that you're no longer in need of a loan.
 

·
Super Moderator
2019 Ascent Touring (CWP)
Joined
·
3,843 Posts
PenFed has 2.49% ... check other credit unions if your's doesn't have better numbers, especially if your credit score is where you say it is. You CAN do better than 3.49%
 
  • Like
Reactions: Sparkland

·
Super Moderator
2019 Ascent Touring (CWP)
Joined
·
3,843 Posts
Sounds like we needed to shop around more for an auto loan then @Jim_in_PA :-O
Actually, I think there are way too many folks who settle for dealer-obtained financing. Some of that may be from "get it done so I can drive my new car off" aspirations as there really are a lot of folks who don't plan ahead on a vehicle purchase. (For the Ascent, many of us have had to wait for factory orders so that at least helps) There are a lot of rides that are purchased "impulsively" or at least expeditiously.

I find it to be a good practice to "stay aware" of the financial marketplace for things like auto loans, credit cards, insurance, etc. Things are constantly changing. That doesn't mean constant hard research; just look into what's going on from time to time. The auto loan business is very competitive and dynamic. It's lucrative for dealers because with a semi-captive audience, they can earn a few extra shekels on a deal by placing loans. But as individuals, we all hopefully feel we have a responsibility to make sure we are getting the best financial deal available to us.

My approach has always been to try and arrange for my best available option(s) before I actually talk to a vehicle sales person. Once the deal is struck, they then have the option to match or beat. I've had it go both ways. I've mentioned previously that for our MY11 Outback Limited, the local dealer matched the 1.49% financing I had available with a bank and I let them place that loan. They made a few bucks and we got the rate. They couldn't match on our MY16 Outback Limited with Eyesight, so PenFed had that loan. Same is currently true with my Ascent...they don't currently have a better deal or a match for me based on their current crop of financial partners. So I have 2.49% with PenFed, check in hand, ready for my delivery in hopefully the next week or so. I could have lowered that to 1.49% if I wanted to play the "TrueCar" game and waist a bunch of dealers' time, but as I've mentioned previously on this subject, it wasn't worth the hassle for a few hundred dollars in interest over a three year loan. I'm paying this vehicle off quickly due to a new income source.
 

·
Registered
Joined
·
88 Posts
Actually, I think there are way too many folks who settle for dealer-obtained financing. Some of that may be from "get it done so I can drive my new car off" aspirations as there really are a lot of folks who don't plan ahead on a vehicle purchase. (For the Ascent, many of us have had to wait for factory orders so that at least helps) There are a lot of rides that are purchased "impulsively" or at least expeditiously.

I find it to be a good practice to "stay aware" of the financial marketplace for things like auto loans, credit cards, insurance, etc. Things are constantly changing. That doesn't mean constant hard research; just look into what's going on from time to time. The auto loan business is very competitive and dynamic. It's lucrative for dealers because with a semi-captive audience, they can earn a few extra shekels on a deal by placing loans. But as individuals, we all hopefully feel we have a responsibility to make sure we are getting the best financial deal available to us.

My approach has always been to try and arrange for my best available option(s) before I actually talk to a vehicle sales person. Once the deal is struck, they then have the option to match or beat. I've had it go both ways. I've mentioned previously that for our MY11 Outback Limited, the local dealer matched the 1.49% financing I had available with a bank and I let them place that loan. They made a few bucks and we got the rate. They couldn't match on our MY16 Outback Limited with Eyesight, so PenFed had that loan. Same is currently true with my Ascent...they don't currently have a better deal or a match for me based on their current crop of financial partners. So I have 2.49% with PenFed, check in hand, ready for my delivery in hopefully the next week or so. I could have lowered that to 1.49% if I wanted to play the "TrueCar" game and waist a bunch of dealers' time, but as I've mentioned previously on this subject, it wasn't worth the hassle for a few hundred dollars in interest over a three year loan. I'm paying this vehicle off quickly due to a new income source.
We planned ahead with our credit union and USAA when we first thought we had decided on a car. Didn't even try the dealer and with my near-perfect credit the best we got was 3.39%. Unfortunately, it was just over a month ago (long car shopping story) so I think applying somewhere else would hit my credit pretty hard from what I was told. I haven't been able to find a hard time-frame that it counts as "one" hard inquiry but the consensus looks to be 45 days.
 

·
Registered
Joined
·
225 Posts
Hi everyone,

It is great to be here! I have learnt a lot in this forum, and am about to pull the trigger for my 1st Ascent and my first car in the next few days.

I have a question about mortgage that nobody seems to talk about. If you settle down on a price with a dealer, where do you get the loan from? the same dealer or from a 3rd party? Is there any dealer fee associated with it (btw I am in NJ)? I am planning for 0 down with monthly loan payment. I guess that monthly number could be a good metric for overall cost of the purchase.

Thanks,

DL
We looked at my bank BOA and were told their lowest rate was 3.25% for 5 years at the time. We looked at Chase and as a preferred customer we were also told 3.25% for 5 years. When we went to the dealer we asked them to look into financing and wanted a 3 year loan. The finance guy screwed up and put it down for 5 years and with BOA they Offer 4.5%. My wife hard stopped him in his tracks. When he re-did the paper work for 3 years Chase showed as 3.25% which is what we expected so we went with it.

Our key to all this was we wanted a loan that wouldn't charge us a pre-payment penalty if we dumped more money into the loan to pay the car off early.
 

·
Registered
Joined
·
27 Posts
Discussion Starter · #12 ·
Thanks guys for your nice suggestions. Very helpful! I think it is a good idea to get pre-approval from local credit union before hand. But just need be careful that my SSN will not be hard pulled.
 

·
Super Moderator
2019 Ascent Touring (CWP)
Joined
·
3,843 Posts
We planned ahead with our credit union and USAA when we first thought we had decided on a car. Didn't even try the dealer and with my near-perfect credit the best we got was 3.39%. Unfortunately, it was just over a month ago (long car shopping story) so I think applying somewhere else would hit my credit pretty hard from what I was told. I haven't been able to find a hard time-frame that it counts as "one" hard inquiry but the consensus looks to be 45 days.
I also have a near-perfect (and in some months, perfect) credit score. I personally wouldn't worry about a brief change in that if it got a much better finance rate. If you haven't already taken delivery, you might consider trying the resource I mentioned. PenFed. $20 to "join" as a contribution to a military focused charity and $20 to fund a savings account gets you the rates if you are credit worthy.
 
  • Like
Reactions: woodcan

·
Registered
Joined
·
1,406 Posts
Hi everyone,

It is great to be here! I have learnt a lot in this forum, and am about to pull the trigger for my 1st Ascent and my first car in the next few days.

I have a question about mortgage that nobody seems to talk about. If you settle down on a price with a dealer, where do you get the loan from? the same dealer or from a 3rd party? Is there any dealer fee associated with it (btw I am in NJ)? I am planning for 0 down with monthly loan payment. I guess that monthly number could be a good metric for overall cost of the purchase.

Thanks,

DL
That's bold!!! I assume you're in your teens or early 20s, that's gonna be a challenge to get a decent loan.

I pay $705/mo for 5 years @ about 1.8%APR or so from a local Police CU.
 

·
Registered
Joined
·
27 Posts
Discussion Starter · #15 ·
Yeah other people also mentioned PenFed. But their rate for 5-year is 3.74%, even higher than Subaru's. My friend used them years ago as being an IEEE member.

I have a local credit union who can do 2.75%. That will be my backup plan.
 

·
Registered
Joined
·
27 Posts
Discussion Starter · #16 ·
That's bold!!! I assume you're in your teens or early 20s, that's gonna be a challenge to get a decent loan.

I pay $705/mo for 5 years @ about 1.8%APR or so from a local Police CU.
Thank you for the kind reminder :). I am in my 30s. To be clear I meant owning a car. I have leased Toyota before, and also learnt a lot about dealing with dealers.
 

·
Super Moderator
2019 Ascent Touring (CWP)
Joined
·
3,843 Posts
Yeah other people also mentioned PenFed. But their rate for 5-year is 3.74%, even higher than Subaru's. My friend used them years ago as being an IEEE member.

I have a local credit union who can do 2.75%. That will be my backup plan.
By all means go with the term and rate that's best for you. I'm only doing three years on the Ascent Tourinig (and never go more than four normally) so my friends at PenFed have an acceptable deal for me without my jumping through hoops. I was only using them as an example of a credit union and credit unions often have some of the best rates available for their members. Unlike years ago, pretty much anyone can join a credit union at this point.
 

·
Registered
Joined
·
156 Posts
Have Financing Locked Up Before You Buy

Since my first car purchase (a long time ago), I always get a loan approved before I shop for a car (nowadays I pay cash).

Keep in mind, if you go through Subaru, it gives the Finance Guy one more shot to sell you stuff you don't need (and don't want). "Credit Life Insurance" is one of the biggest car loan scams going.

My Finance Guy was a total jerk about pressing me to buy all sorts of crap I had told him - repeatedly - I did not want. And mine was a straight cash deal which should have taken 3-5 minutes. The worst closing on a car I have ever experienced. Subaru should be ashamed of this behavior. But, apparently they give their blessing to it.
 

·
Registered
Joined
·
1,115 Posts
Subaru doesn’t control the local dealer or their finance guy. The finance guy at most dealers are responsible for profit and they get more by selling you high price high margin items. Most are jerks as others have said. I just keep saying no to every extra and eventually they get it. I did have to walk out on a Ford dealer’s finance guy. Still don’t own a Mustang. Subaru will only know about bad experiences with finance guys if you tell them - either call or in the survey. Enough negative feedback and they may do something.
 
1 - 20 of 35 Posts
Top