According to a recent independent study by the nonprofit Center forResponsible Lending, the average rate markup at dealers in 2009 was 2.74 (^)
percent, which equates to will be very hard to know how much the dealer is marking up the rate. $714 per customer! If you’re not preapproved, it
But if you’ve gotten a preapproval, and want to simplify things by closingthe loan at the dealer and not going back to the bank or credit union, you (^)
can still do so. Just make sure the dealer is giving you the same rate as thelender was offering to you directly. The dealer will probably get paid a fee
called a “flat,” for doing the loan, you won’t pay any extra interest, and youwon’t spend extra time running around. The flat is generally one percent of (^)
the amount of the loan. The dealer gets this flat as a reward for the largeloan volume they do. Some lenders offer “super flats” of two percent to
three percent ($600-$900 on a $30,000 loan).
much as a mortgage.TIP: Interest rate doesn’t affect payment on a car loan as
On a house, a single point of interest can mean hundreds of dollars amonth on the payment. On a typical $25,000 car loan, a point of interest will (^)
change a 60-month payment by only about $11.00 per month. A $1,000price change on the same loan will affect the payment about $19.00 per (^)
month.
barry
(Barry)
#1