Can the fine people of fitfreak.net help me out with a question?

Please don't laugh. I'm new to all of this.

If I take out an auto loan, get approved, etc. I get a new car... does that mean I have to pay the dealer the monthly car payments AND the auto loan? or do the two go together?

 

Monthly car payment goes to the loan finance company.

 

Ohhh, okay. So the monthly payments for the car would go to the bank or whatever instead of the dealership?

Kill two birds with one stone kinda?

What's the ideal amount for a loan request?

 

When you take out a loan, the finance company pays the car in full purchase price to the dealership.

You then pay the monthly auto loan payments directly to the finance company.

Ideal loan amount would be anything that will cover the full purchase price of the vehicle - your down payment/trade in.

 

If you get the loan through the dealer, they get their money from North American Honda Finance (or some other bank) to pay for the car, and you pay NA Honda a monthly payment (or some other bank).

If you get the loan through your insurance company, they hand you a check made out to the the car dealer for the amount you finance, so the dealer gets their money this way. You would get bills monthly (or a payment book) from the insurance company to make your payments to.

Either way, the title for the car (piece of paper that says you own it) is held by the finance company until the loan is paid off. Once the loan is paid off they mail you the paper so you own it "clear title" of any liens.

So don't worry, if you get a loan through your insurance company, or some other bank, you make one payment. Either way the car dealer gets the full amount right away for you to "buy" the car.

The ideal amount depends on you. If you don't have any cash or car to trade in, the ideal amount would be the full purchase price of the car (however it's difficult to get the full amount; they usually require you make a down payment in the form of cash or a trade-in). Ideally the least amount you need to buy the car is the amount to finance; this lowers your payments, and lowers the amount of interest you pay on the loan.

There's really only 1 bird, 1 stone here. It's just a different stone depending on if you get financing through the car dealer or your insurance company (or some other bank).

 

I plan on trading in my car, valued at $3400. If I do request, let's say $19,000 for the Sport, that would make the monthly payments really high I can imagine. My credit is too young to get any real deals on monthly payments.

 

Did the dealership give you that quote for your trade in value? If not, do not expect to get that much.

Also here is a link to a car payment calculator.

Auto Loan Calculator - Car Loan Calculator - Cars.com

Some dealer will try to lower the monthly payment by extending the auto loan term to 72 months instead of 60 months. By doing this, it will lower the monthly payment but you will end up paying more interest.

 

Yeah, the dealership gave me that quote.

Thanks! Gonna punch in some numbers now!

 

your monthly payments all depend on interest rate, amount of time to pay off loan and the amount you finance. More than likely if you do get financed you can expect to pay in the $300+ range on a 5 year term...dont be surprised if it gets closer to $400....

I have less than stellar credit, so my APR is high 8% I pay $300 a month....lucky for me om almost done paying the sucker off, and even luckier that these little cars hold there value!

 

I did a loan through Honda and currently making payments directly to Honda themselves. $3k down payment was required and for better interest rates my mom cosigned it.

 

I can't do that because of my parent's financial situation.

 

A 2013 Sport with automatic has a "list" price for $18,800. This includes shipping charges to the dealer, but does not include any dealer fees, add-ons, state sales tax, licensing and title fees.

The price $18,800 is negotiable. You don't have to pay this. The average price paid right now, according to websites like Edmunds.com is $17,800.

Your trade in is worth $3,400 (according to the dealer you talked to). This comes off the purchase price so $17,800-$3,400 is $14,400.

Sales tax on $14,400 (7% in metro-dade, I think) is $1,008, bringing it up to $15,408.

I don't know what license and registration/title fees are in FL, but let's say it's $300.00 so the amount you owe is $15,708 (this is just an example, it could vary thousands depending on how well you negotiate and what dealer options you buy).

Assuming you don't give them any of your cash and you finance "the full amount" you would need a loan for $15,708 to give the dealer their money.

A 5 year (typical these days) loan for $15,708 at 2.4% would result in monthly payments of $278.08.

A 5 year loan for $15,708 at 8% (based on no credit rating, maybe it's higher) would be a monthly payment of $318.50.

The lower payment over 5 years totals $16,684.80 that you would actually pay for the car (the difference from $15,708 is the interest you paid for the loan).

The higher payment over 5 years totals $19,110. So the higher interest rate cost you an additional $2425.20 over the life of the loan compared to the lower interest rate loan.

 

It's good that you are doing some research first before jumping into this.I'm not sure if you have a credit union but if so you can check out that option as well.

I was able to get a new car on my own at 18 through my credit union and it was easy.You get approved for the loan from the credit union just like a bank and then you can shop for your car.It's best not to tip your hand to the dealer just tell them you have your own financing.

They will try every trick in the book to get you to go through them even if it puts you in over your head with a note you can not afford.Make sure you can comfortably afford the payment and factor in insurance.

Man that new car smell is intoxicating lol so be careful while getting a new car is great dont be afraid to go used and build up your credit then trade in for new later.

Good luck and most of all do not let anyone talk you into any deal that you are not 100% comfortable with because you will be the one on the hook if you cant make the payments.

 

This is what I did.

 

I'm terrified of going for a used car. Sure, the dealership fixes everything, but still.

 

Here is a link to what people are actually paying for the Fit.

Honda Fit Prices Paid and Buying Experiences - Car Forums - Edmunds

The price will differ from state to state, city to city and dealership to dealership. So just use the info found on that forum to get a broad idea of what you should expect to pay. Also you might want to find out what the insurance cost will be for the Fit. I was shocked that the insurance cost for the fit sport was more than a G35 Coupe.

 

It's a Honda. Terrified is doing a bit much. Get one that's Honda Certified that has a warranty if you're concerned, my used Element was Certified and warrantied until 100k but I never ended up bringing it in for anything the whole time I had it so take that for what you will.

 

Oh, yeah I forgot about those places! LOL
I was gonna apply, but I need to be a member first
Guess I'll do that, then apply for a loan.

 

I hear ya but trust me you can find good used cars that have been maintained well with receipts for all service etc.You can have a trusted mechanic check out a used car to make sure there are no problems.

Old people with the AAA/AARP bumper stickers take good care of their cars and get them serviced regularly (jk)

again new is cool but that newness wears off pretty quick and before you know it your new car is a couple years old.

 

Id get a used GD3, you really cant go wrong with them try to find one under 75k miles. I bought mine used and so did a family member. They have both been flawless reliable. Matter of fact I just changed the original factory battery this year, battery lasted 5 years. My wifes bmw is a headache compared to the fit...