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Discussion Starter · #1 · (Edited)
So, I recently purchased my new 2012 LTZ a little over two weeks ago and I thought I would share my experience with my local dealer and GM Financial with you guys.

To start, my credit is not very good. In fact, it is pretty bad (540). The only good thing I had on it that probably helped out is that I paid off a car loan with America Honda Financial in 2008. Therefore, I was not even really expecting to get approved when I strolled into my local chevy dealer (after being contacted by the financial specialist following my completion of an online "bad credit car loan application" with some random website.

I was looking at a 2012 LTZ with a sticker price of a little over $25k and was intent on putting no more than $3k down. The finance specialist told me that GM Financial originally came back with a 16.9% APR and that she talked them down to 12.9% for me. Remember, I was not even expecting to get approved so of course I was more than happy.

...The only hang-up: due to my income GM Financial set my monthly payment maximum at around $470 (15% of my income); which put me out of range for the sticker price on the LTZ.

I was not willing to compromise and at threat of my walking away from the "table" the dealership came down almost $1,500 from invoice! I assume that it being the last week of the month probably had something to do with their willingness to take a loss.

BUT, I was still around $20/month (approximately $1k of the total price of the car) from staying under my 15% of income limit set by GM Financial.

I remained unwilling to compromise (would not consider putting any more money down or stepping down to a 2LT) and it looked like the deal was going to fall through altogether.....

....The next day I got a call from the finance specialist at the dealership letting me know that she "worked everything out, my payments were to be $457/month, and my car (which I had already put $1000 down on to keep it on the lot!) was ready to pick up." I told her I'd be there that day and that I didn't even want to know how she did it. As it turns out GM Financial (to keep my payments under 15% of my monthly income) came down another 2 percentage points on my APR (to 10.9%)! I know this does not sound great to most, but for me, with my credit history and the car I was getting out of, this was music to my ears.

Anyways I just thought I'd share my experience and hopefully it will give any potential car buyers the conviction to stand their ground while staring down the ties across the table at their local dealerships.

To summarize:

1) Never accept the first terms that the dealer or the financier presents... They can always do better.
2) Remember that you are the one with all the power... They want your business.
3) Going in at the end of the month puts you at an advantage... Dealers and finance companies are eager to make deals around this time.
4) DO NOT be afraid to "walk away from the table"... This helps show remind them who is in control and nine times out of ten will result in a better deal.
5) Before you go to the dealership make a decision on what model and trim vehicle you want as well as any options you are interested in (research both the sticker price and invoice price), decide how much you want to put down and what you want your monthly payments to stay under (keep in mind that as a rule of thumb for every $1k you finance you'll be looking at approximately $20/month in payments)

Chris E.
 

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Welcome! That's quite a treat. Congrats on the luck there.. lol.
 
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Good deal. Keep up on those payments and you should see your FICO start to improve in a few months. Another good thing to do, if you can swing it, is to top your payments and tell them to apply the overage to the principle - that'll knock the interest paid down quite a bit. I set up automagic payments rounded up to the next even hundred, which should get me paid off a year early.
 
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Discussion Starter · #5 ·
Good deal. Keep up on those payments and you should see your FICO start to improve in a few months. Another good thing to do, if you can swing it, is to top your payments and tell them to apply the overage to the principle - that'll knock the interest paid down quite a bit. I set up automagic payments rounded up to the next even hundred, which should get me paid off a year early.
Nice! That's definitely something to think about.... The last thing I want is to be upside-down in a few years when I'm ready to trade in... And I am surely excited about watching my FICO go up!

Chris E.
 

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I think I'll add my negative experience to this...

Like the OP, I have not perfect credit.. I believe my score was around 587 or something like that. I tried first to get a Toyota Camry from the Toyota dealer and was told they had no idea what to do to get me approved. I had a friend suggest that I try GM Financial or Ally while I was waiting on Toyota. First they went around and around with the finance officer at the dealer, made me jump through several hoops including providing the last 3 previous tax returns. I jumped through all of the hoops and about a week later was approved for my '12 1lt cruze at 10.99% with $852 down. I paid my down payment etc and signed the contracts. The finance officer showed me the pre-requisites that I had to meet to get the loan and we had everything approved and GM Financial approved the loan. The dealer gave me the keys to the car... I thought I was done... I was wrong.. A few days later GM Financial did employment verification (I was truthful about everything and hid nothing) and denied the loan because of debt to income... The finance officer called me back in to tell me what was going on but told me they couldn't take the car back, that the dealership would have to guarantee the loan with a local bank. I lucked out because they already had my trades sold and 800 miles on my car. All in all, I financed 17425 on a car with a sticker of 21031 and because of the dealership's backing my interest rate dropped to 8.99% and my payment is at 315 a month...

For what its worth, buyer beware ... If you have multiple part time jobs with several incomes, make sure to dot your i's and cross your t's with them. Apparently they have the ability to back out of a signed contract.
 

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If you're getting excited over an 11% APR on a car, you have bigger problems and should never have bought the car.

You admittedly have horrible credit, you have a credit card like interest rate, you went for the most expensive car you could rather than even an Eco which would've gotten better mileage anyway, and you're paying more for a Chevy Cruze than I did for a Pontiac GTO.

I need to frame this for people as a great example as to why America is facing the fiscal problems that it is. You should have bought a $6k beater until you get your financial house in order and got your credit to where you would qualify for the best rates, not the worst. Granted there was another guy on here who admitted to having something like an 18% rate. So grats, you're not the worst off.

Now let me put on my flame suit.
 

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This! Good to know there is hope for me. I just trashed my credit by not paying my mortgage anymore. Had a 800 rating. That's what happens when you take a risk in a free market economy and it doesn't go your way.
Fixed that for you. It wasn't the banks fault that you couldn't pay your mortgage. If you loaned a random person $10,000 and they came to you saying "Sorry. I only can give you $5,000" I highly doubt you're going to say "Ok. That's fine". Same goes for a bank except they also have a bottom line to meet.

I truly feel sorry for anyone who has been affected by this economy in that way. But that's no reason to blame companies for bad things happening.
 

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Good deal. Keep up on those payments and you should see your FICO start to improve in a few months. Another good thing to do, if you can swing it, is to top your payments and tell them to apply the overage to the principle - that'll knock the interest paid down quite a bit. I set up automagic payments rounded up to the next even hundred, which should get me paid off a year early.
Exactly what I do. I figured I could get a jump start with this loan, then once the car is paid off, I will then have a nice foundation for a home loan.
 

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If you're getting excited over an 11% APR on a car, you have bigger problems and should never have bought the car.
Cannot help but agree. I have credit cards with lower APR's than this.

Working to improve your credit pays off in the long run. A lower APR is a much better way to "save $$$ with GM Financial".
 

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Discussion Starter · #13 ·
If you're getting excited over an 11% APR on a car, you have bigger problems and should never have bought the car.

You admittedly have horrible credit, you have a credit card like interest rate, you went for the most expensive car you could rather than even an Eco which would've gotten better mileage anyway, and you're paying more for a Chevy Cruze than I did for a Pontiac GTO.

I need to frame this for people as a great example as to why America is facing the fiscal problems that it is. You should have bought a $6k beater until you get your financial house in order and got your credit to where you would qualify for the best rates, not the worst. Granted there was another guy on here who admitted to having something like an 18% rate. So grats, you're not the worst off.

Now let me put on my flame suit.
Look, there seems to be some confusion as to the reason that I wrote this post. It was not so that i could let you all know how excited I am about my interest rate or payments, though I am; but instead was meant to be a tool for potential car buyers. I think that anyone can use the principles I laid out to save some money, no matter their individual credit situation.

But, since some of you guys decided to be hyper-critical of me specific situation, I feel it necessary to explain my reasoning a little more.

I love my LTZ. For me it is worth the 457 a month that I am paying. I have practically $0 living expenses and over $3k/month in "disposable income;" so $457/month is not hurting me (I don't think I should be used as an example of "what is wrong with the American financial system"). By the time I am ready to trade in my credit will be much improved (with the help of gm financials reporting, making monthly payments on a high interest credit card designed for individuals with bad credit, a few other things, and do to the fact that many if not all of the negative things on my credit will no longer reflect). By that time i will be finished with law school and I will be able to finance a new vehicle with a more desirable interest rate.

So again, my post was meant to help people understand the power of being well informed and making a decision on what they want and can live with prior to arriving at the dealer. I believe the principles can be applied regardless of creditworthiness.

To each his own.

Chris E.
 

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Look, there seems to be some confusion as to the reason that I wrote this post. It was not so that i could let you all know how excited I am about my interest rate or payments, though I am; but instead was meant to be a tool for potential car buyers. I think that anyone can use the principles I laid out to save some money, no matter their individual credit situation.

But, since some of you guys decided to be hyper-critical of me specific situation, I feel it necessary to explain my reasoning a little more.

I love my LTZ. For me it is worth the 457 a month that I am paying. I have practically $0 living expenses and over $3k/month in "disposable income;" so $457/month is not hurting me (I don't think I should be used as an example of "what is wrong with the American financial system"). By the time I am ready to trade in my credit will be much improved (with the help of gm financials reporting, making monthly payments on a high interest credit card designed for individuals with bad credit, a few other things, and do to the fact that many if not all of the negative things on my credit will no longer reflect). By that time i will be finished with law school and I will be able to finance a new vehicle with a more desirable interest rate.

So again, my post was meant to help people understand the power of being well informed and making a decision on what they want and can live with prior to arriving at the dealer. I believe the principles can be applied regardless of creditworthiness.

To each his own.

Chris E.
I admire your honesty, don't worry :) when you pay off your car, your credit score will be 700+ (hopefully). Just keep managing yourself, and whether its because you have no credit, or bad credit, make sure you NEVER make a mistake of not paying something and you will be on your way to a mortage loan :).

Also... Keep your job.
 

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Discussion Starter · #15 ·
Cannot help but agree. I have credit cards with lower APR's than this.

Working to improve your credit pays off in the long run. A lower APR is a much better way to "save $$$ with GM Financial".
Did you even read my post?... The whole thing was about how to get a lower APR. I got the bank down 6 percentage points from their initial offer! My intention was no to tell people to go finance a car with 11% APR... Obviously that is not a good idea, generally speaking; but getting a better rate than is initially offered is.
 

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Beats me why anyone would buy a vehicle with a three year warranty with five years of payments and pushing themselves just to make those payments.

Darn vehicles depreciate faster than you can pay them off, and after that short 3 year period, you are on your own. Costs around 700 bucks just to replace a set of tires, they wear out quick, plus brakes, and exhaust systems. First thing to go is the AC system, seen people pay as much as $2,500 to get them worked on while making those steep monthly payments. Goes on their credit card.

Lovely IRS doesn't let you deduct a cent for your transportation to and from work or school. But its okay if you are a CEO and have a 47 million buck Gulfstream you use to entertain your customers. That and the maintenance, fuel, and flight crew is 100% deductible.

Even changing the clutch yourself on the Cruze with these way over priced parts costs over 550 bucks. If you pay a shop a hundred bucks an hour to do with post tax dollars, actually paying 130 bucks an hour based on your gross income. If you slap this on your credit card with minimum payments, that is more like 400 bucks an hour.

And ironically, this does not increase the value of your vehicle! But if you don't get it done, your vehicle with payments is worthless.

See the same thing with homes and a 30 year mortgage, even after one short year with some parts carrying a five year warranty, people are getting robbed. Mainly with HVAC systems with these once reliable components slapped together in China, Pure garbage! Know one that paid $8,000.00 for a new system installed and had to get a second mortgage, But before they can even pay that off, this new piece of crap will go to ****. Another with these argon filled windows, with a ten year warranty, had to get a second mortgage for $30,000 to have all those windows "professionally" replaced.

These people will never get out of debt!!

When I purchased my 04 Cavalier, paid cashed for that, started making payments to my bank account, that and the GM Card build up, paid cash for the new Cruze. But I was still getting screwed blue by our government. Earning only 1% interest, and since they are printing more bucks to increase inflation at 3.5%, my money was worth that much less at the end of the years. But I still had to pay taxes on that 1% interest! So getting screwed not once, but twice.

Just have to learn to bend over and try to enjoy it, but that just doesn't happen.

Another bad joke is that Kelly's blue book trade in value, take excellent care for your vehicle, lucky to get half that value, so you try to sell it privately. But then have people coming over to your home crying they need a vehicle and would you let them have it for ten bucks a month.

This is not the same country I was born and grew up in, the world is like a big screwdriver and you are on the tail end of it.
 

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I don't see how someone with $3k in disposable income a month has a credit score in the 500s unless you racked up a bunch of debt and never paid it off or declared bankruptcy(and if you have that kind of income, why did you need to declare bankruptcy). If you have that kind of disposable income, why would you take out a loan longer than 36 months since you could pay it off in a year if you wanted to? If you indeed have it, why not just save for 9 months and you could pay cash?

Sorry things don't line up here...you claim almost no living expenses which implies you live at home and are relatively young but you have all this money and still have a horrible credit score? Other than things that I already said, only other plausible explanation is someone new to the job market that had absolutely no credit history.

Not trying to bust your balls for the **** of it but taking out a car loan at that kind of APR is sheer lunacy. And I would expect someone with a good income to have more sense than that.
 

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Did you even read my post?... The whole thing was about how to get a lower APR. I got the bank down 6 percentage points from their initial offer! My intention was no to tell people to go finance a car with 11% APR... Obviously that is not a good idea, generally speaking; but getting a better rate than is initially offered is.
Yes, I read it. You offered one method you found, through your own financial situation, to save money by getting a lower APR. Beaker's original post, and my post, simply offered alternative and less costly methods to one obtaining a lower APR.
 

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It's a crazy world, when I went to pick up my new Cruze, dealer got in a bunch of 2011's with about 20K miles on them. Would have cost me $5,000.00 more than buying a new one. GM Card doesn't cover used vehicles, and got another 700 bucks off by paying cash.

It's crazy going into any store stating that one years worth of free interest is the same of cash. If they don't give me a much better deal by paying cash, walk out.

When you buy auto insurance, first thing they look at is your credit score to determine your rates, the lower your score, the more you pay. Ironically, the second thing they look at is your drivers' license. When I vehicle gets old, drop comprehensive can collision, willing to take the risk. If its your fault, only give you the blue book value on your car, and you find you are paying more for premiums than what your car is worth. With a loan, even though your car is a complete wreck after three years, still have to pay for collision and comprehensive insurance.

I have never claimed on comprehensive nor collision yet. But sure had claims when other people ran into me. Ironically, the full insurance coverage my our new Cruze is less than the full coverage we are still carrying on our 03 Cavalier. But that is because the Cruze has ten airbags in it, the Cavalier only has two.

Government is not a good example for going deep into debt, but when you think about it, that buck you have in the bank, that deed on your home, and that title on your vehicle is only as good as our government. If they go to pot, so will the rest of us. That is reason to be concerned.
 

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Discussion Starter · #20 ·
I don't see how someone with $3k in disposable income a month has a credit score in the 500s unless you racked up a bunch of debt and never paid it off or declared bankruptcy(and if you have that kind of income, why did you need to declare bankruptcy). If you have that kind of disposable income, why would you take out a loan longer than 36 months since you could pay it off in a year if you wanted to? If you indeed have it, why not just save for 9 months and you could pay cash?

Sorry things don't line up here...you claim almost no living expenses which implies you live at home and are relatively young but you have all this money and still have a horrible credit score? Other than things that I already said, only other plausible explanation is someone new to the job market that had absolutely no credit history.

Not trying to bust your balls for the **** of it but taking out a car loan at that kind of APR is sheer lunacy. And I would expect someone with a good income to have more sense than that.
Of course I wouldn't assume you are getting any enjoyment out of busting my balls. Some people just can't help but to be critical.

But, since you basically asked, yes I am young and yes I live at home (part of the "bomarang generation"). I graduated from UF this past December and made some really bad financial desicions while I was in school....ONE of the actions I'm taking to correct that is making good on this high risk loan from GMF (since it is not going to put me at risk financially... Not to mention that I love my car).... In a few years I'll have above prime credit... Will have likely seen a promotion by then... Be able to finance a home and a new car with low APRs... And be in a much better position all around.... So what is not to understand?

.....btw buying cars in cash does nothing for your FICO as far as I know (please someone correct me if I'm wrong... But 6 yrs ago I purchased a new '06 accord in cash and it never reflected on my FICO).... So I am actually bettering my credit situation by biting the bullet on a high APR for the next few years in hopes of placing myself in a better position down the road... Right?
 
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