Just wanted to see what kind of rates Honda was offering to folks with good credit. I'm trying to debate between using Honda financing and alternate lenders.

Thanks!

 

honda financing : 6.99%, my credit union 5.6% --

 

i walked out with 6.09%

 

2.99% on trucks and suvs and 5.99% on cars. we thought it was too high so we paid for the whole car

 

credit union 5.5%

 

I'm with quangalang -Just save up and pay in cash - then you pay no interest at all! IMO any loan other than a mortgage is a bad idea. (and even mortgages are a necessary evil)

 

Thanks for the great responses -- Hate to be the voice of opposition on "pay the whole thing with cash", but you can earn more money on interest by keeping your cash and using it wisely. Why not make your money work for you?


On a $17,750 loan at 7% interest, you pay $350/month in payments for 60 months. That means, you end up paying $21000 for the car. For $17,750 in Florida, you can get the car (Sport AT), the sales tax and the title transfer all in the loan.

I'm purposefully putting a high interest rate on the auto loan and a lower than average CD rate in with this.

Putting that same $17,750 in the bank for 5 years in a 5% CD (and you can get up to 6% right now, depending on where you shop, plus the Fed is going to keep raising rates, so get one with a "Bump Option" so you can get higher rates going in) and you end up with $22,791 or so.

I don't know about you, but I'd rather end up $1800 ahead at the end of the 5 years, plus not be minus $18,000 up front. Taking that $1800 off the price of the car, since both piles of cash were even in the beginning, means you just walked away with a Sport AT fit, tax, title, registration, in Florida for $16000. Slick deal :-)

Sporty

 

Another possible advantage of financing the vehicle rather than paying cash is in the unfortunate event that your new Fit gets totalled. If you have paid cash and insurance only gives you the blue book value, you are likely out a few thousand dollars since we all know new cars lose that amount of value the minute you drive them off the lot.

However, if you finance the purchase and buy gap insurance and then get totalled you will get all of your money back--everything you still owe on the vehicle, even if it is thousands more than the blue book would have paid. Of course, you will be out whatever you paid for the gap insurance, but it is likely to be less than the difference between blue book and what you still owe on the loan.

Yes, you will have paid some interest on the loan but sportmat's points are very valid--take that money and invest it wisely and you will most certainly come out ahead.

Also, if you do have an unrelated emergency, you will have cash on hand. If it is tied up in a CD you will lose some of the interest but it is less painful than not having any cash at all and having to rack up lots of credit card debt or get a high-interest unsecured loan.

Oh, btw, I financed my Fit thru my credit union at 5%.

 

Mathmatically - that CAN in rare situations work...just like the idea of a mortgage being beneficial....

But in reality, very few (I mean VERY) few people EVER put 100% (if any) of that cash they don't pay up front into an investment. Most people blow it on wine, women, and song (or I/H/E)

 

:-) Or they blow it on cars.


Stick it in a CD, out of sight, out of mind.