If you are shopping for a vehicle, you’re already aware of the higher prices and lack of inventory available. Needless to say, the current auto market requires quick decisions and leaves little room for negotiation.
At Members Trust, we’ve always encouraged members to get pre-approved for their loan before visiting the dealership to demonstrate that you are a serious and qualified buyer and to help in your negotiations. However, now we are hearing from members that dealerships are refusing to accept financing from an outside lender!
As you know, dealerships make extra money at the buyer’s expense by arranging the financing through their lenders – adding to the annual percentage rate, so they get a cut. They also make money off the extra packages they sell, many of which are non-negotiable right now. Since the pandemic supply chain issues have decreased inventory, automakers and dealerships are experiencing some losses so now they aren’t just encouraging their lenders, they are requiring it!
Can dealerships do this? Is this legal? There is no law preventing this, but the Office of Consumer Credit Commissioner (OCCC) is “concerned about the practice” and would like to hear from impacted consumers so they can investigate. You can contact the OCCC’s Consumer Assistance staff:
You’re Not Stuck with Dealer Financing
If you’ve recently financed a vehicle with a dealership, we may be able to help you save money by refinancing. Auto refinancing replaces your existing car loan with a new loan at a different interest rate and possibly a different term. These loans are secured against your vehicle car and paid off in fixed monthly payments typically over several years.
When Should You Refinance?
Most people refinance to save money, but this goal can mean different things to different people. If you keep the term the same and are eligible for a lower interest rate, you could save money each month and possibly thousands over the life of the loan. You can also choose to extend your term to get your monthly payments even lower, but keep in mind this could cause you to pay more money in interest over the life of the loan.
Take a quick moment to estimate your monthly payment with our auto refinance calculator to see if you can save money by refinancing with us.
Things to Know About Refinancing
Of course, you want to know how much you can save before you start the process. When you apply to refinance, we will look at several factors to see if refinancing is a good option for you. We will look at:
- Your credit score.
- The make, model, trim, and mileage of your vehicle.
- The value of your vehicle compared to what you owe.
- How many payments you have left on your loan?
- How recent is your current loan?
Contact us to discuss your refinancing options to see if we can help you save money. If it isn’t going to be a good deal for you, we will let you know that too. Visit our auto refinancing page to run the numbers or apply today for a quick evaluation.