Rep Power: 0

Hi there guys. Great forum btw.

We want a new Honda Civic, but everywhere we go the dealers don't want to give us a good deal unless we finance with Honda. We have financing with our bank and don't want to finance with Honda.

Why are they pushing Honda financing so much?
Is Honda financing trustworthy, and do you end up paying more in the long run?

Also, what is a good price to pay for a new Honda Civic LX 2013?

I do apologize in advance if I have broken any forum rules by asking these questions.

 
Rep Power: 244

You get a better rate by financing through Honda because it cuts out the middle man (the bank). I currently finance through Acura and have had no problems. They were able to get me the best rate possible. Honda prefers if you use them because they don't have to deal with any other parties. It allows you to get a better interest rate because they can afford to take a bigger hit then most banks. I bought my Acura used but because it was certified Honda let me finance through them which helps me out and them because they know it passed QC from a dealer. If it wasn't certified I would have had to use a bank.

 
Rep Power: 519

Once you have a loan secured at the institution of your choosing, you can talk with the dealer as though you will simply write a check for the agreed amount of purchase. They will get a lump sum for the total, right?

They don't ever need to know about your finances or financial arrangements IMO (unless they are doing your financing).

For all they need to know, you have cash available and can pay right now.

I have done exactly this with a new car and 2 new bikes. I already knew what I wanted and had the loan money in my checking account before I made the deal.
Talk up a deal, stroke a check.

If they don't want to sell you a car, I would think some other dealer will be glad to.

-----------------------------------------------------

What is the current APR offered by Honda Financial on a new car? Can you get that same rate?
http://automobiles.honda.com/current-offers.aspx
I see as low as 0.9% here on Civics.
What APR are you getting from your bank?

My guess (not a guess) is a lot of money is made off of financing people through the dealer channels.
Your deal when they finance you APPEARS better because they will make all sorts of money from it no matter what.
Guess how dealers make their money. (It's not from selling new cars at invoice price LOL)
Guess how the F&I guys make their money.




/NOT a salesman
//I hate salesmaggots.

 
Rep Power: 205

^^ I was thinking that too

I've bought 2 vehicles (privately) in the past 3 years and used some bank financing. Nobody needed to know that but me and I dealt with both sellers (cash).

I don't know how things work in the US though....since it seems the entire country is bankrupt.

I discussed a car loan with my bank at one point and their rate was 8%.....when I picked my jaw up off the ground I asked why...and they simple said they weren't in the business of car loans and I could get a better deal from a car dealer. This is a polite way of saying cars are a bad investment from a banks point of view.

 
Rep Power: 244

Won't you need a lien to secure a loan from the bank (car title) in order for them to give you the money? If there is no lien it would not be a secured loan which would be risky for the bank and a higher rate.

 
Rep Power: 205

When you're an adult like me the bank just gives you a line of credit and you can spend it on whatever you want. If I wanted to use my line of credit to fly to Vegas and do hookers and blow the bank wouldn't have anything to say about it.

....you hit on the reason why banks don't finance cars though. If you are using the car as security...the value of the car is ALWAYS going down so that's a bad investment from a bank's point of view.

 
Rep Power: 519

My experience was that a bank wouldn't finance 100% of a vehicle, they want a significant amount of downpayment from yourself.

I suppose this is so if you default, they can still recoup their part of the investment?

 
Rep Power: 244

So if OP has a substantial down payment for his new car then that would be an option, but if not then Honda financing or saving up a nice down payment would be his best options. I would be surprised if he found a bank that would give him 100% without a title. 0.9% is pretty hard to beat.

I let my financial advisor (wife) handle the money, she is better at it.