Pin It
Favorite

What's the Deal? 

by Clint Burgess


There are what seems like a never-ending run of commercials that announce some sort of fantastic finance rate on new cars or a huge cash rebate -- sometimes even both. But is it all too good to be true, or does the consumer really make off with a good deal in the end? The truth lies in the crunching of the numbers. Right now, auto manufacturers are offering great incentives in an effort to clear out their current inventory to make room for the 2005 models.


Of course financing, refinancing and interest rates all hinge on one thing: credit. As consumers make their way through the plastic-friendly world, they acquire credit points. It's these points -- and whether our credit is considered good -- that determine if we are let in the club. The club, that is, of low interest rates and big cash rebates. To play, you have to qualify for financing.


No matter what kind of deal you're getting, the number of months that you carry your vehicle financing plays a big part, too. On average, the maturation point of an auto loan is 60 months, or five years. This number is important because it factors into your total cost for a vehicle, not just the sticker price. No matter what interest rate you get -- aside from zero -- your vehicle is costing you much more than what the sticker price says.


So the interest rate is the key element of any vehicle loan. The majority of dealerships have in-house financing and can find many ways to make a purchase work, but watch out for excessive interest rates. Many consumers finance through their personal bank, credit union or other lending agencies. When you combine these term and rate, that's where the numbers start to work for -- or against -- the consumer.


Kevin Parker, finance manager at Wendle Motors, broke the digits down for me in a plain and simple manner. "It really varies on a case by case basis," Parker says. "Some people might put more money down, or pay more on their monthly payments, and then you have to take the interest rate points into account."


Typically a good deal can be had if you look carefully at what all three factors combined are going to add up to. For example, Ford is currently offering $5,000 rebates on the Explorer SUV and the Ranger pickup. With additional rebates for military personnel and college graduates, these rebates can really add up.


"The last three out of four customers I had went with the rebates rather than a lower interest rate," says Parker. "In the long run, they still save more money and especially on the Ranger. If you have a $16,000 truck and you're getting a $5,000 rebate that you can put down, that's only about $11,000 for a brand-new truck. That's a pretty good deal."


Even if you get a good interest rate -- say, 2.9 percent -- that is still 2.9 percent you are carrying for the duration of the loan. Make you're money work for you. If it works out that you can get a good rebate, put the cash on the vehicle, bring your loan duration down and make more than the minimum payment. These are keys to getting your money's worth out of a new vehicle.


As for Parker, he says obviously the dealership is in the business of making some profit on every sale. "But we're here to get the customer the best deal," he adds, "and right now business is working out for everyone."





Publication date: 09/09/04

  • Pin It

Latest in News

  • Crash > Click > Cash
  • Crash > Click > Cash

    Lawyers and chiropractors already have your name, your address and the police report from your car accident — and they want you to hire them
    • Jul 21, 2016
  • Starting Small
  • Starting Small

    A village of tiny houses in Spokane Valley could serve as a model for fighting homelessness in the region
    • Jul 21, 2016
  • Drastic Action
  • Drastic Action

    Spokane among seven school districts sued by State Superintendent of Public Instruction; plus, trio of police-chief finalists are in town
    • Jul 21, 2016
  • More »

Comments

Subscribe to this thread:

Add a comment

Today | Thu | Fri | Sat | Sun | Mon | Tue
Bodies Human: Anatomy in Motion

Bodies Human: Anatomy in Motion @ Mobius Science Center

Tuesdays-Sundays. Continues through Dec. 31

All of today's events | Staff Picks

More by Clint Burgess

  • The Word Made Fresh

    & & by Luke Baumgarten and Clint Burgess & & & r & It's gotta be tough to do publicity for Christian rock. The evangelical idea that the secular world is the devil's domain - that it's the fiery gauntlet you have to navigate to get your eternal reward - turns
    • Sep 21, 2005
  • Summer Adventure - NW Fishing

    Fishing is a way to absorb the natural surroundings of the region we call home, to commune with the spirits of generations gone before who dropped their lines the same way we do today. Besides, it's
    • Jul 13, 2005
  • Honda Gets Tough

    As a rule, certain car companies are known for specific models and typically excel at what they do within a specific type of vehicle. For example, Dodge is known for its trucks, Toyota for its sedans, Mazda for its sports cars and so fort
    • Jul 6, 2005
  • More »

Most Commented On

  • Lane Ends Ahead

    Spokane wants to improve a mile-long section of Monroe — but that means taking away two lanes
    • Jul 7, 2016
  • Too Smart for School

    What happens when a 12-year-old prodigy tries to go to college in Spokane?
    • Jun 30, 2016
  • More »

Top Tags in
News & Comment

green zone


marijuana


Briefs


Election 2016


trail mix


Readers also liked…

  • Calling Out Snitches
  • Calling Out Snitches

    Efforts to make it harder to convict someone solely on an informant have stalled again
    • Mar 18, 2015
  • A New Voice
  • A New Voice

    The Black Lens, continues Spokane's long tradition of African-American publications
    • Jan 21, 2015

© 2016 Inlander
Website powered by Foundation