After being in a car accident, Jeff Barringer needed a new car, and fast. Jeff hates car shopping though. With the help of a trusted friend, Jeff was able to score a great deal on a car he didn’t think was even in his price range and a great deal on the car loan. It goes to show that it really is the ultimate car buyer’s market right now.
We asked Jeff about his car buying experience and how his friend was able to help him get the car he really wanted.
Q: Why did you need a new car?
A: I needed a new car because I totaled mine on the freeway. I had no idea what I wanted, but I had an SUV before, so I knew I wanted an SUV or truck. I only had four days with a rental car, so finding a car was very urgent.
I researched cars on the Internet and locally in the newspaper. I absolutely hate the process of car shopping and I have a friend who has a great negotiating personality and he volunteered to help.
Q: What happened when you went to the dealership?
A: We went to a Honda dealership on a Tuesday afternoon. I was interested in the new Element or Ridgeline, but I thought the Ridgeline would be out of my price range. I did research and found that both models keep their value well. We test drove both vehicles, liked both and then left.
I let my friend do all the talking while we were there. My friend asked about pricing and options and even gave the salesperson his contact info.
Using his friend’s good negotiating skills, Jeff was able to get an amazing deal on the truck he really wanted.
At that point, I didn’t even know if I wanted a car loan or lease. Right after we left the first dealer, we called another dealer to see their price on both models for both lease and buy options. The Ridgeline had such a good deal on it at the time that it actually fell into my price range. After I found that out, it killed any other options of looking at other cars. I knew I wanted the Ridgeline.
The car loan option on the Ridgeline was a better deal than a lease on the truck. And, the offer on a 2008 model was better than a 2009. I knew I was going to keep it for a long time, so I decided to get the 2008 model.
Q: What did you do about financing?
A: A friend of mine gave me advice to get pre-approved for a car loan before going to the dealership. So after leaving the first dealership and deciding on the Ridgeline, I explored my financing options. The salesman was following up with us and we told him we were getting financing.
I went to a local credit union (Eastern Financial Credit Union) and was told I had to open an account and was met with apathy. I knew exactly what my credit score was (736) and it was in the excellent rating. I told them what my score was, and they came back with a rate of 7.7%, so I walked out.
I came back to work pissed off. I had had it with the car buying process. I wanted to just rent a car for the rest of my life.
I then went online to apply with Bank of America since I had my account with them for 19 years. I got an immediate response to my online car loan application. They gave me a good rate and the process was super easy. They also gave me an 800 number to call to see if I could get any further discounts on the car loan terms. They called me right away and gave me a lower rate of 5.7%.
Jeff’s financing alternatives for a $16,000, 48-month car loan:
- Bank of America: 48 months, 5.7%, $373.56 per month, $17,930.09 over the life of the loan, $200 application fee
- Eastern Financial Credit Union: 48 months, 7.7%, $388.56 per month, $18,650.88 over the life of the loan, credit score of 736
- Eastern Financial Credit Union (if Jeff had them check his credit with another bureau and got him over the 740 “excellent” credit threshold): 48 months, 4.49%, $364.78 per month, $17,509 over the life of the loan
- Honda Financial Services: 48 months, 6.1%, $376.49 per month, $18,071.52 over the life of the loan
Q: Now that you had pre-approved financing, what did you do next?
A: My friend then called the salesman at the Honda dealer and told him we were ready to come in. This was two days after we were there to test drive. He was about to leave for the day, but he stayed. It was about 4 p.m. on a Thursday.
The salesman met with us and did the purchase agreement. We made sure he didn’t add any extras or change the price he gave us two days ago. Then we went into the box with the finance manager.
The finance manager wanted me to sign papers without telling me what the rate was and it was actually higher. I had $8,000 to put down and I already was pre-approved for my car loan with Bank of America. I wanted to see if Honda could give me a better rate.
She was playing games and wanted to see what Honda would come back with. They came back with an APR that was 0.4% higher. So my friend said “can I speak to you” and pulled me out of the box. He did this because he was mad about how she was trying to play games and her aggressive attitude.
Bank of America had a $200 application fee for the car loan. After doing the math to see if it was cheaper to pay the application fee or go with a slightly higher rate, it ended up being $58.57 cheaper to use Honda Finance. I also chose Honda Finance because they give discounts on service, loyalty discounts and I saved money on the rental car because I would have had to extend it a few more days if I went through Bank of America.
It wasn’t worth the hassle to go through Bank of America because I would have had to do more paperwork and wouldn’t have got the car that day. Honda Finance seemed easier and I left with the Ridgeline that day.
After that, the finance manager aggressively tried to get me to buy an extended warranty. I didn’t. Honda is reliable anyways and I didn’t want to add it to my monthly car loan payments. I’m glad I didn’t buy it after because I heard that the dealership makes all its profit in the box by selling all these add-ons.
The salesman never jerked me around the whole time, but the finance manager was so forceful. I took a survey from Honda after buying the truck and told them that she was too aggressive. Now I see why they don’t let you take the salesperson in the room with you. If the salesperson is good, you should be able to bring them in the room.
Q. Do you have any advice for other car shoppers?
A: What I learned from this car buying experience is to bring someone with you because it’s intimidating. If you don’t have the negotiating personality or the time to do it, bring a friend with you who is good at it.
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