Full Throttle 5.0

The other thread asking what everyone paid below invoice got me thinking about interest rates. I financed 48 months at 3.5% with a very good credit rating. How long did you finance and at what interest rate?

bt_osu

With a fico score above 720 a person should get 1.5 - 2.5 % regardless of term. This is the going rate for the competitive banks. Ford credit and some are higher than this, so we dont use them unless they are offering special rates.

If you qualified for say 2% and the dealer charged you the 3.5% then they made the 1.5% mark up. This would represent an additional $1000-2000 in profit for them depending upon how much $ you financed. This is how some dealers can offer such low prices as they make it up elsewhere. For example if you borrowed $40,000 in the scenario above theyd make an additional almost $1400 from the interest bump.

EyeFish

1.7% for 5 years.

doolin64

My dealer financed me through Bank of America at 4.1% for 72months. I could have cared less on the rate. I was let them think they're getting that extra kick back from the bank. I refinanced with at 1.99% for 72 months with my local credit union. I've done this with the last 3 cars I purchased.

DocBach

1.74% over 72 months

Full Throttle 5.0

I'm going to do this...

Jarrett H

You financed the truck at the dealership and them later refinanced at your own bank?

DocBach

I did the same -- they said I got $1000 off if I used their dealer financing at like 4.99%, then the next day I refinanced with a credit union at 1.74%.

BadRobot61

1.75 % at the dealer for 72 months, will refinance at my Credit Union after the first payment is made.

Jarrett H

That's what I thought you guys were saying, its definitely not smart to say the least...For a 50k dollar truck, you are paying $2450 in interest at 4.9%. Plus, now you are paying your new loans interest at 1.74%. So, $2450-$1000(rebate)=1450+870(1.74%)= $2320. You saved $130 in the end.

Doolin didn't mention rebate, but we'll assume and give both figures. He financed at 4.1% and later refinanced at 1.99%. For a 50k dollar truck, $2050 is the interest at 4.1%. Refinance the loan for 1.99% is $995 in interest for a 50k dollar truck. $2050(original 4.1%)+$995(refinance 1.99%)=$3045. If he got a $1000 rebate from the dealership, you could think of it as $3045-$1000=$2045. He saved $5.

I hope those numbers are easy to understand, as I'm sure you already know, in order to refinance a loan you have to pay off the old loan and interest. That's why I added the previous left over interest to the new.

Now you could have just got your banks interest rate in the beginning, and still had the dealership match Ford's finance rebate and trade-in rebate like they did for me and about a 1000 others. My credit union did a .9% rate and the dealership also matched the two incentives by Ford. That should be $3000-$5000 in savings just at the finance level.