I was 99% ready to close on a 2019 GT w/rwd. But no....

[MrSmoofy]

If they have pulled his credit assuming so they are dinging the hell out of it already. I paid and used MyFico.com to get all of my scores and showed them and made them make me a deal before I allowed them to pull my credit. They did exactly that, and after I got the deal I wanted I took it to another dealer to try to get it beat, while at the other dealer they called with another point off my interest rate. I ended up going back to them. Then after it was all done the bank sent me a letter lowering my interest another .5 claiming there was special financing going on.

Basically what I'm saying you have to know how to play their games to get the best deal don't let them make you do a lot of work if they want to sell you a care they will make it happen otherwise find someone who wants to.

 

[Roarbomb]

I just went in and told them I wanted 0.9% and that’s what I ended up with.

 

[Peeso33]

Here are the offers for a base GT with a Houston zip code:

 

[Dr_jitsu]

Good stuff, thanks guys.

 

[RUFFSTUFF]

The deal was done. Am I in the wrong for wanting a lower interest rate? I was at the bank trying to wire him money. All he had to do was give me one more day. I was meeting with my wife at 11 tomorrow, then immediately wiring the money. $14k is not chump change. The deal was done. He did all that work and now is losing the sale. I am sorry, but you are completely wrong here.

I am now looking at the Ferguson deals.

If you were at the bank why didn't you just get a check and go to the dealer?

 

[Rob M]

I'm not, but this is also common knowledge when you are buying vehicle to some. Which is why we are trying to help.

This dude has posted many red flags. The dealer is giving him a "high interest incentive". I'm not a loan officer, but I'll be damned if I let somebody fall for that bullshit

Average new auto loan rate in May 2019 per USNews.com was 7.08%. 750+ was 4.38%. The 7.75% loan plus $2700 incentive, depending on the term, is likely an effective rate of just 4% which is better than any bank or credit union would do. Not sure why you think the dealer's offer is BS. The advantage to taking a loan with such an incentive is attractive if you have any intent to pay off the vehicle early. Since the OP claims to have no debt other than a mortgage, and increasing earnings, it might make sense for him to consider. But to expect Kia to give him $2700 plus a rate reserved for higher FICO score borrowers probably isn't realistic.

In a way this is like the lease buyout tactic - the money factor on a Kia lease is high, but you can get the cash and do the buyout.
I see that there are a couple posts above suggesting a lease and early buyout, however, this is not likely viable since the OP appears to live in TX and would be subject to double taxation.

 

[RUFFSTUFF]

I'm still at a loss for this whole thread. If you wanted the car so bad, you could have put down $100 deposit, gotten the rest your money and got the car the next day (as you say). It looks like the dealer thinks you don't have the money and if you are looking at 7.75% interest, there is probably a reason for that. Kia's (KMF) standard rate was 3.9% last time I checked.

Furthermore, if you run a finance calculator with your numbers I bet you will find out that with a 3.75% difference in interest, you will actually save money by skipping the rebate to get the lower (4%) interest on a $40k car.

 

[Callum]

Average new auto loan rate in May 2019 per USNews.com was 7.08%. 750+ was 4.38%. The 7.75% loan plus $2700 incentive, depending on the term, is likely an effective rate of just 4% which is better than any bank or credit union would do. Not sure why you think the dealer's offer is BS. The advantage to taking a loan with such an incentive is attractive if you have any intent to pay off the vehicle early. Since the OP claims to have no debt other than a mortgage, and increasing earnings, it might make sense for him to consider. But to expect Kia to give him $2700 plus a rate reserved for higher FICO score borrowers probably isn't realistic.

In a way this is like the lease buyout tactic - the money factor on a Kia lease is high, but you can get the cash and do the buyout.
I see that there are a couple posts above suggesting a lease and early buyout, however, this is not likely viable since the OP appears to live in TX and would be subject to double taxation.

You have some great points. It ultimately reads, for me atleast, the dealer knows what they are up to but is telling the OP the terms with a twist to make it seem like a great deal.

KMF has always had horrible rates, but why not seek out a branch on a 36-48mo loan with a lower interest rate? Seems like if you have $14,000 burning a hole in your pocket, you can afford the higher payments. I'm a believer of not giving the bank that much money (interest that is)

 

[Dr_jitsu]

Correct, guys. The $2700 offsets the high interest rate, especially if I pay it off early. A reasonable rate would be 4.25%. Therefore, I am paying 3.5% too much, but as stated, the $2.7k covers that.

Price will be $34,122 + TT&L. That price includes delivery. I would like the stereo and sunroof of the GT1 or GT2, but I can live w/ the base GT as the only "must have" are the 6 banger and brembo brakes.

 

[RUFFSTUFF]

Apparently I missed the credit score post... Aha.

 

[Dr_jitsu]

I'm still at a loss for this whole thread. If you wanted the car so bad, you could have put down $100 deposit, gotten the rest your money and got the car the next day (as you say). It looks like the dealer thinks you don't have the money and if you are looking at 7.75% interest, there is probably a reason for that. Kia's (KMF) standard rate was 3.9% last time I checked.

Furthermore, if you run a finance calculator with your numbers I bet you will find out that with a 3.75% difference in interest, you will actually save money by skipping the rebate to get the lower (4%) interest on a $40k car.

I can explain it to you, but I can't understand it for you. I also explained that I never put myself in the position of "wanting a car so bad." I am not emotionally tied to any particular car, I am just analyzing prices.

 

[Callum]

I can explain it to you, but I can't understand it for you.

If it makes sense in your head and you are comfortable with the deal. Get it. They are great cars. I think we few people (myself included) are confused about how the deal is structured. If you are good, then your good!

 

[Dr_jitsu]

I am talking with some local dealers and they are giving me the run around on prices. I simply approached them because they were recommended by this forum. If a better offer does not come through I will put the money down on the base GT I have been posting about.

 

[Dr_jitsu]

Thank you, everyone, for the help. It bears repeating that I am paying $34,122 + TT&L for a red GT delivered. How would you rate a GT1 or GT2 at $39-40k in comparison? As stated, I primarily want the stereo and sunroof from the top levels. I don't care about any other tech. It is the motor and drivability that motivates me to get this car.

 

[MisterMac]

I don't get this whole discussion and the responses. Are you guys under the impression that the dealer has control on the interest rate at KMF? Do you think he will be able to go elsewhere and get a lower interest rate that will offset the KMF $2700 discount? I don't get it. A 650 credit score is fair credit and you have not idea on the debt to income ratio and other factors I discussed above. Is the price of the car too high?

To the OP, do you feel that you can get a lower interest rate through another finance company? Enough to offset the $2700 discount? Did you already commit to the the deal you are telling about us? If so, they may have given up as this is the interest rate that KMF is dictating.

I would heed the warning on the hard inquires on your credit score, they will lower the score if you wait and the new inquiries show as separate ones.

ALERT!!

Yes, the dealer has control of the interest rate. Kia will quote the lowest rate they will finance the contract at. Then the dealer has the ability to mark-up/increase the rate to you. If you agree, the dealer can win HUGE.

Kia Finance will pay the dealership up to 70% of the increased life-of-loan interest in a cash check to the dealer.

The Math:

Kia Finance quotes 4.75% which would equal $4,515 in interest on $36,000 loan at 60 months.

If you take 7.75%, the interest is $8,194 for the same term.

The dealer gets paid $8,194-$4,515=$3,680*.70=$2,576.

This is how many dealers, especially internet dealers like Carvana, make tons of money. Not by marking up the price of the vehicle, but by selling the loan contract.

The way we win as buyers is to find the great price, take the 7.75% rate and then refinance immediately somewhere else at a lower rate. A credit union is an ideal course of action. You get the rebate for financing with KMF, but ultimately the lower rate on refinance and the dealer gets what they have coming to them.

If you complete the refinance within 90 or 120 days, KMF will take the $2,576 back from the dealer. Sweet revenge.....

 

[MisterMac]

I find it amusing how many people here are expressing expertise about what interest rate is good and what is bad for the OP without seeing a credit app and knowing all the factors lenders use to determine risk.

Are you guys finance officers?

Well, I make about $150,000,000 in auto loans each year through dealerships, so yes, you could say I am finance officer.

 

[DaJackson]

Furthermore, if you run a finance calculator with your numbers I bet you will find out that with a 3.75% difference in interest, you will actually save money by skipping the rebate to get the lower (4%) interest on a $40k car.

He’s financing a 40k car but only borrowing 19k because of his insurance down payment. Makes the interest less impactful.

 

[RUFFSTUFF]

He’s financing a 40k car but only borrowing 19k because of his insurance down payment. Makes the interest less impactful.

Concur.

 

[Dr_jitsu]

West Side Kia, close to me, has a 2019 red GT2 rwd on sale for for $41765 they advertised a GT1 for $36k, but do not have one in stock. The GT is $34k.

 

[Lawrence Williams]

West Side Kia, close to me, has a 2019 red GT2 rwd on sale for for $41765 they advertised a GT1 for $36k, but do not have one in stock. The GT is $34k.

For the 7k, the GT2 is worth it!