E-Loan?

[Hi Ho]

Does anyone have any experience with E-Loan? I am shopping around for an auto loan and trying to get the best deal. They have attractive rates and a simple looking process without exhorbitant fees. I looked them up on the BBB website and they are in good standing. Has anyone had any bad experiences or know anyone that has? This is just one of the several options I am looking into but I don't want to get caught up in a mess.

[mbossman2]

Not too sure about e-loan (don't know much about them) but questions I would ask:

Is the loan being held by e-loan or is it brokered out to another lender?
If so, can I find out the actual lender before I close on the loan?
Who services the loan?

remember rate is only 1 part of the borrowing equation and while E-Loan may offer you the best rate, what happens after that is just as important. I would use an E-Loan rate as part of the negotiations and, if you are buying from a dealer (or someone who can arrange financing) I would say "I have a rate of X, if you can beat it, fine, if not I'll use them" (but only after you have agreed on the price of the car - dealers will give a lower price and then make it all back and then some in the financing - don't tip your hand)

[XenaWP]

Nope, but consider joining a credit union ... they offer great rates too.

[doctorgonzo]

I've heard good things about E-Loan. But as XenaWP points out, credit unions can have great rates too, especially if you have a checking account with them too and you set up automatic payments.

[TwoRails]

Another option is to buy from a new car dealership's used car lot. You normally can negotiate for a better loan with a lower rate. The truck I'm in now I purchased that way and talked down the loan percentage to a fraction of the bank or credit union.

[Litespeed]

Have you thought about a Lease on a car? Much cheaper payments than a purchase. Plus on a car it deprecates so much it is better to lease then turn around and get another one in what ever allotted amount of time your lease is. My wife and I both lease and save about 40% on our monthly payments than if we bought. And in most cases you can lease for however long than after the lease term is up, say 4 years, negotiate to buy the car at the depreciated value. And if mileage is an issue most all have Flex lease programs.

[HAL9000]

You have to really go over fine print on a lease... while it may work great for one person, it may be the worst thing ever for the next.

[doctorgonzo]

Leasing only works if you absolutely must have a new car every couple of years. Otherwise, it is usually a huge waste of money.

If you want to get the most value out of a car, buy a used car that is 2-3 years old. A car that old has gotten over the worst of the depreciation but is still new enough that it shouldn't have huge mechanical problems. If you can get it with the original warranty so much the better. Then drive it into the ground.

[Litespeed]

Originally Posted by HAL9000 You have to really go over fine print on a lease... while it may work great for one person, it may be the worst thing ever for the next.

Could you give me an example? I haven't heard of too many negatives. And my wife is an attorney so I can assure you that the fine print was gone over too.

[Litespeed]

Originally Posted by doctorgonzo Leasing only works if you absolutely must have a new car every couple of years. Otherwise, it is usually a huge waste of money. If you want to get the most value out of a car, buy a used car that is 2-3 years old. A car that old has gotten over the worst of the depreciation but is still new enough that it shouldn't have huge mechanical problems. If you can get it with the original warranty so much the better. Then drive it into the ground.

Seems like paying for some thing that depricates is also a waste.

[doctorgonzo]

Yes, paying for something that depreciates is a waste. That's why you should buy a car that is 2-3 years old. At that point, it has lost maybe 40-50% of its value (cars depreciate the most in the first couple of years). So you can basically get a very decent car for 60% of the sticker price. If you have the original warranty, it's great.

If you lease, after your lease is up you actually own nothing. It's exactly the same as renting an apartment: you have no equity after making all of those payments. That money was essentially thrown down the toilet. Like I said, if you must have a new car every two years, leasing makes more sense: instead of constantly buying new cars and selling them two years later (taking the 40-50% hit in price due to depreciation), leasing can be better. But if you want to get the most out of a car, leasing is not the way to go.

[Litespeed]

Originally Posted by doctorgonzo Yes, paying for something that depreciates is a waste. That's why you should buy a car that is 2-3 years old. At that point, it has lost maybe 40-50% of its value (cars depreciate the most in the first couple of years). So you can basically get a very decent car for 60% of the sticker price. If you have the original warranty, it's great. If you lease, after your lease is up you actually own nothing. It's exactly the same as renting an apartment: you have no equity after making all of those payments. That money was essentially thrown down the toilet. Like I said, if you must have a new car every two years, leasing makes more sense: instead of constantly buying new cars and selling them two years later (taking the 40-50% hit in price due to depreciation), leasing can be better. But if you want to get the most out of a car, leasing is not the way to go.

Well you can have any number of year leases 3,4,or 5. But after the lease is up you can buy the car at the reamining depreciated value. So then you are buying the car for a lot less then if it was new. Then you are essentially buying a used car where you were the only owner and the whole time you where leasing you are paying a lot less.

The one down side I have found to leasing can be insurance rates tend to be slightly more.

But hey leasing isn't for every one. There are always options. I just do it because it is cheaper. And I like having a new car that is reliable and under warranty. In my younger days I would spend years paying off a car only to have an old car to show for it that had lots of miles on it and no warranty and I would be stuck fixing any thing that broke. It is now just a peice of mind for me that I don't have to worry about.

[doctorgonzo]

If you buy the car after the lease, it is almost always more expensive than if you bought it straight-out, because the buy-out price stipulated in the contract is generally higher than the actual value of the car. In fact, experts say that leasing a car and then buying it out is the worst thing you can do. Either buy it straight-out or lease it and return it.

Consumer Reports has run the numbers both ways, and if you intend on keeping the car leasing then buying is almost always more expensive.

Edit: see this article on the higher costs of leasing and buying: http://biz.yahoo.com/pfg/e16buylease/art011.html

[Litespeed]

Originally Posted by doctorgonzo If you buy the car after the lease, it is almost always more expensive than if you bought it straight-out, because the buy-out price stipulated in the contract is generally higher than the actual value of the car. In fact, experts say that leasing a car and then buying it out is the worst thing you can do. Either buy it straight-out or lease it and return it. Consumer Reports has run the numbers both ways, and if you intend on keeping the car leasing then buying is almost always more expensive. Edit: see this article on the higher costs of leasing and buying: http://biz.yahoo.com/pfg/e16buylease/art011.html

good point. I probably never looked into buying after a lease as I usually have just got some thing new. Good information though. I still think it is a nice option when comparing those monthly payments and having a warranty.

[EzyStvy]

Originally Posted by HAL9000 You have to really go over fine print on a lease... while it may work great for one person, it may be the worst thing ever for the next.

Yep...Had a friend that didn't pay attenion to the fine print. $3,500.00 in Milage Overage Charges just to turn it back in...

[HAL9000]

Originally Posted by Litespeed Could you give me an example? I haven't heard of too many negatives. And my wife is an attorney so I can assure you that the fine print was gone over too.

OK, this might be a rare example, but it's an example based on my own personal lease. It's been some time since I declared bankruptcy and in rebuilding credit, the only way I could get the loan was through a finance company at an obscenely high rate (but believe it or not, the payment and operating costs were cheaper than the operating costs of my old beater wagon that was getting replaced) and they couldn't make it a loan, it had to be a lease (don't remember right now the reason why)... now the buyout at the end was a reasonable price of $2200, but I put a LOT of miles on my car during that time frame and if I wasn't going to keep the car, my milage penalty was in the area of $6000. The car was no longer worth that much let alone the combined value of $8800.

Now this whole deal did exactly what I needed it to do, it was slightly cheaper to own, more reliable and most importantly, rebuilt my credit to a very respectable score.

Leasing just isn't cost effective in many cases if you're planning to keep the car, or worse yet, don't want to keep the car but put high miles on it. If you're trading off for a new one every few years and within limits, then yes, it's a great way to go.

I also agree on the used car... there are MUCH better deals on cars that are like new and still have warranty. I picked up my car two years old for $7000 less than its original new price, put on a whack load of miles and it still runs great.

[mbossman2]

leases, unless you are writing off the vehicle, are a waste of money. the "cap cost" or upfront money does nothing but lower your payment (basically it is prepaying the money you are "saving" off the payment). The money that you pay is just rent, nothing more. you aren't building any "equity" towards ownership. Plus, you don't get the advantage of paying off the car and driving it for 1-2-3-4 (or in my case 8) years. 8 years of no car payment.....mmmmmmm that tastes good.

then factor in the additional insurance you have to carry (basic coverage doesn't cut it and they will find out) + the mileage limits and potential overages + the requirement to fix anything that is not "wear and tear" (that is usually clearly spelled out in the lease agreement - no scatches of more than 1 inch etc) + you have to return the vehicle with X amount of tread remaining and on and on and on....

leases are bad ideas....the ONLY plus is you get to ride around town in far more car than you could normally afford if you bought....wooohooo!

Beleive me, I used to dispose of the surrendered lease vehicles for my bank....we sent more bills for scratches, tires, pitted windshields, and burned upholstry than I care to remember.

[Litespeed]

Originally Posted by mbossman2 leases, unless you are writing off the vehicle, are a waste of money. the "cap cost" or upfront money does nothing but lower your payment (basically it is prepaying the money you are "saving" off the payment). The money that you pay is just rent, nothing more. you aren't building any "equity" towards ownership. Plus, you don't get the advantage of paying off the car and driving it for 1-2-3-4 (or in my case 8) years. 8 years of no car payment.....mmmmmmm that tastes good. then factor in the additional insurance you have to carry (basic coverage doesn't cut it and they will find out) + the mileage limits and potential overages + the requirement to fix anything that is not "wear and tear" (that is usually clearly spelled out in the lease agreement - no scatches of more than 1 inch etc) + you have to return the vehicle with X amount of tread remaining and on and on and on.... leases are bad ideas....the ONLY plus is you get to ride around town in far more car than you could normally afford if you bought....wooohooo! Beleive me, I used to dispose of the surrendered lease vehicles for my bank....we sent more bills for scratches, tires, pitted windshields, and burned upholstry than I care to remember.

I never pay up front money on a lease that is instant loss. On average every $1000 you put down is only $20 of your monthly payment. I also do not appreciate the comment that "I get to ride around in a car far more than you could normally afford" comment. That is really not necessary. There are many reasons for an individual to lease and that is not one.

Like I said a lease is not for every one. I was just throwing that out there as an option for getting a car. Many of the things your are stating as negatives I have never had to deal with. I don’t really nor do too many financial advisor see a car as an area you build equity. Also I stated if mileage is a problem then you should not get a lease. Leasing was just an option as it is for many people.

[doctorgonzo]

Originally Posted by Litespeed I also do not appreciate the comment that "I get to ride around in a car far more than you could normally afford" comment. That is really not necessary.

Although it may not be true for you that you don't use leases to get cars you couldn't otherwise afford, it is true that a lot of leases, maybe even the majority, are done for this reason.

A car isn't something you build equity in. However, if you want to own a car for the lowest cost per mile, this means having the same car for 7-8-9-10+ years, and the best way to do this is to purchase a used car that is 2-3 years old and keep it until you can't drive it anymore.

Leases are a good idea if you want a new car every few years and you don't mind paying for it. It's definitely not the cheapest way to own a car though.

[XenaWP]

"Most millionaires drive domestic made vehicles, the most popular being - are you ready for this? - the Ford F-150 Pickup Truck. Three in ten millionaires drive the F-150. Another 25% drive the Ford Explorer sports utility vehicle. Caddies and Lincolns are only the third and fourth favorites, while Rolls Royces and Ferraris don't even make the top ten favorite list. And most millionaires keep their vehicles longer. Over fifty percent drive vehicles two or more years old. In fact, 36.6% of millionaires buy used cars rather than new!"

http://www.richbythirty.com/articles...renextdoor.htm

Of course, going out and buying a used F150 won't make you rich. Rather, vehicle choices reflect attitudes toward spending and investing that are conducive to building (rather than squandering) wealth.

Food for thought.

[TwoRails]

Most "ordinary" rich folk got rich by not spending money. I've known 'millionaires' and most of them were tightwads.

[mbossman2]

Originally Posted by Litespeed I also do not appreciate the comment that "I get to ride around in a car far more than you could normally afford" comment. That is really not necessary. There are many reasons for an individual to lease and that is not one.

it wasn't aimed at you personally, just the generic "you".

The basic core training for leasing includes one of the reasons to lease and that is in the top 3 reasons that people lease.

While it is true that you don't truly build equity in a car, the real financial advantages exist in the weeks, months and years after you stop paying for a vehicle.

A automotive leasing is a trap akin to the same one that credit cards are: you never stop paying, you go from car payment to car payment with no respite. Even a one year break can net someone in the area of $5000.

Auto leasing is very difficult to break out of the cycle: you have nothing with which to trade and your next purchase requires, on the average, $2000-$3000 to come even close to qualifying for the best manufacturer subsidized financing rates.

Auto leasing is set up to appear to help the lessee but in reality is really set up to benefit the manufacturer and its dealer network - they get a steady stream of vehicles from which to pick for their used car lot - in the perfect situation: they come to them, the dealer doesn't have to go and find them, buy 'em (auctions are high risk wholesale purchases) and transport them back. Even pulling 5 or 10 of those a month, can dramatically impact the dealer's bottom line. How does it impact the manufacturer? Leases are perfect for sales forecasting: they know exactly how many cars are coming to the end of term at any given time so they can forecast how many cars sales are going to come from those end of terms.

Originally Posted by TwoRails Most "ordinary" rich folk got rich by not spending money. I've known 'millionaires' and most of them were tightwads.

BINGO!

the average millionaire (according to the Millionaire Next Door) drives a 2nd hand American car that he purchases and rarely leases.

[HAL9000]

To sum that all up, when it comes to financing of ANY type, it's not set up to be in YOUR favor, but rather in favor of the business itself.

[Litespeed]

AGAIN I was throwing out an option that might be benificial to some one that might be looking for car options. These are many of your points that are good for your car buying expericnces. Quit trying to debate every darn point some one throws out there. Leasing might not be good for you or some one that is trying to become the next millionare, but it does have its positives for many people. You know some times you guys that like to debate every point are not always right and it is ok to let it go. I can't count how many threads I have read on what is wrong with my car and how much money is it going to cost. I was giving and option that has removed that kind of stress from my life and might help others.

Forget it. I think alot of times that is what forums are for debating and I don't have time for that. I am going to take a hiatus.

[HAL9000]

Originally Posted by Litespeed Forget it. I think alot of times that is what forums are for debating and I don't have time for that. I am going to take a hiatus.

Maybe that is a good idea... for some reason, you are taking this all personally when it's not directed at you. If leasing works for you, great! It's not that big of a deal.

[Hi Ho]

Thanks for all the information. I was actually at the dealer today and discovered that they have a 5.9% rate available through Mazda and that is quite a bit better than any other place I have investigated.

Leasing wouldn't work for me at all. I put 400+ miles on my car each and every week and that's if I do nothing but go to work and back. Then there is the fact that I like to run cars into the ground. I plan on keeping this car for a long time.

Yes, financing is always in the business favor but that's why they exist. The only way around that would be to pay cash for the car.

About used vehicles. I can find the car I am looking at on the used market but from what I've found I would only save around $2,000 if I bought a used (2004) model and that does not have features such as side curtain air bags and other little things that have only been added for the current model year. That is from a private seller too. Depreciation varies by make and model. This car is not depreciating quickly.

The car, by the way, is the Mazda 3 four door. It is definetely the most fun to drive car I have ever driven. It's quite an upgrade from my 1990 Civic with no A/C (major factor ) or any other options.

[mbossman2]

Originally Posted by HAL9000 To sum that all up, when it comes to financing of ANY type, it's not set up to be in YOUR favor, but rather in favor of the business itself.

that is true but as a consumer you want to balance your benefit with the company's benefit.

There are always options that do so.

HiHo, manufacturer subsidized financing is almost always better than anything available in the marketplace. The only 'gotchas' are the level of credit and down payment requirements, they can be very steep so don't assume that you will automatically qualify.

But do go in with another financing offer in hand in case they don't/can't offer you the rate you want but a higher one than you have in hand....the loan is just as much a negotiation as buying the car...

the best advice I have ever gotten on car deals:

they are and should be treated as 3 seperate and distinct deals:

The purchase of the car
The sale (trade in) of your existing vehicle
The financing.

[XenaWP]

Originally Posted by Hi Ho Thanks for all the information. I was actually at the dealer today and discovered that they have a 5.9% rate available through Mazda and that is quite a bit better than any other place I have investigated....

HiHo, make sure you do your homework and find out what the dealer cost of that vehicle is. That isn't an outrageously low interest rate, in fact its quite competitive, but often dealers put out low interest rates but charge more for the car itself (discount it less). Money costs what it costs to borrow. They aren't going to offer a 1% loan AND discount the car to within a few hundred of their cost, you know?

Still, that looks like a good rate and make sure you hold firm and get them within a few hundred of their cost. MVCP and UBS are both buying services that you may want to look into joining if you can, they get you great prices on vehicles.

[TwoRails]

Also... don't forget the power of negotiation!! I'd expect to get a lower than advertised rate at the dealer, and did. I waited until all was "said and done" and was talking to the F&I guy and he shot me the rate. I told him, sorry, but that's way too high and started to get up. He said, wait a minute.. We knocked it down some more.

[EzyStvy]

Short version - I got pre approved through credit union.

Finance person at dealership (hot lookin babe) offers a half a percent lower rate that I decline...

I go back to credit union to do paper work and tell him about the lower offer...He lowered His original offer just to get her goat since he knows her. I make out like a bandit.