A tip to save money when buying your Camaro

[2Muchmark]

So you want a Camaro Now Now Now, but you can't afford to buy it and financing is expensive. Here's a tip. Don't go for dealer financing. Instead, explore options on your credit card.

What?

True! Here's how, and here's why.

First, negotiate the best cash price you can get for your car, and be prepared to put down as much cash as possible. Let's say your Camaro will cost you $27,000. Got $7,000 cash? Get ready to spend it all.

Next, call your credit card company and tell them what you want to purchase, and them how much it will cost to have a "Balance Transfer" to your personal checking account. Many credit card companies such as MBNA Mastercard will do this for you at only 4% financing, but if you ask, you can easily qualify for 1% financing. Why? Simple. They want your business and will compete to get it.

If you have a high interest credit card (18% or higher), you may not qualify. And even if you do, cancel this card - you're a sucker and are being ripped off. But if your card is a 7-9% card, you should qualify.

Your credit card company will transfer the funds to your account, and even raise your credit limit to do this, within a couple of days, all without having to sign a single thing.

There are 2 catches:

#1: The balance has to be paid back within 1 year, otherwise the rate moves from 1% up to your normal 9%.

#2: They will want to charge you a service fee of 10% of your total loan immediately. (A $20,000 balance transfer will cost you $200 for example).

When I asked my my bank manager why card companies do this, she explained it like this: Low Risk. You the customer have now acquired a new asset which pushed up your net value. Many times customers do not pay back in time so the cost of the loan reverts back to the usual 9%. The total term of the loan when considering fees, not time, is actually 10 months, 9 months, not twelve. (10% down + 10% (1% per month) + 10% on the final month.. They also get to keep you as a paying customer at a rate you can afford, instead of having to pay much higher fees to someone else which may eventually place your account with your credit card in jeopardy. It's a win-win for everyone (but still mostly for them of course).

When I bought my 2SSRS last summer I paid cash because I hate financing of any kind, but had I known this trick at the time I might have considered it.

[DangerZL1]

Good idea, but the average person can't pay off a loan within a year and you significantly lower your credit score by maxing out a credit card. I can get 4.99% from my Credit association for up to 60 months, so the savings will be minimal over using regular financing. Also, the dealer is likely to have some financing to beat the 4.99% I just mentioned. If not, their finance manager isn't going to make any money on the sale.

[rmnc3r]

I played the 0% Balance Transfer offers for a number of years - back when the Banks were still lending free money - and paid for several vehicles that way.

This purchase (Camaro) was with a hefty down payment and the balance on
my HELOC at 4% (variable). I don't see Interest rates going up soon, so the variable doesn't worry me. PLUS, since the HELOC is a 2nd Mortgage, the Interest is a Tax Write Off. The next best offer was through a FCU at 2.99%, but the interest would not be eligible for the Tax write off. AND since the car was
essentially Paid in Full, no worries about Liens or Repos.

[BackinBlackSS/RS]

Originally Posted by 2Muchmark

They will want to charge you a service fee of 10% of your total loan immediately. (A $20,000 balance transfer will cost you $200 for example).

10% of 20k is 2K not $200. That is a stiff fee. screw that.

[Moorepheus]

not picking on you, but 10% of 20,000 is 2,000, not 200...that's alot when you can consider that 4.5% over 5 years will only cost you about 2,371 in interest (22,371 total paid over 5 years)

So with what you said, you pay 1% for first year on the 20,000 + 2,000 (10% balance transfer fee), that adds up to $22,119 total paid

So, if you can get a low interest rate, your not doing too bad. I guess the choice is up to you in the end.

[PonyMan]

"A tip to save money when buying your Camaro" my tip is to never finance "Toys", and if it is your daily driver - put down at least 50%!!

[extremepcs]

Agreed. I had over 50% with my trade in and my payment is really low. I throw extra money at it each month to go towards the principal.

[BackinBlackSS/RS]

Originally Posted by PonyMan

"A tip to save money when buying your Camaro" my tip is to never finance "Toys", and if it is your daily driver - put down at least 50%!!

While this is sound advice, it is not reality. If the only people that bought cars were the ones that could do this GM, Ford, etc. would be out of business.

[THUMPER20X]

Absolutely. I dropped 12,000 on my 1SS. I pay under 600 a month including insurance for 5 years. I think my payment is like 490/month to own.

[PonyMan]

Originally Posted by BackinBlackSS/RS

While this is sound advice, it is not reality. If the only people that bought cars were the ones that could do this GM, Ford, etc. would be out of business.

Reality is that we are a nation of debtors! Best advice my Grandfather ever gave me, "pay cash, or save until you can". I have applied that advice to my families finances, have less than ten years left on the home mortgage - all else is paid for (even two boys upcoming college). I am forty-five and God willing, set to retire by the age of fifty-five. In most part, we are a society needing that “instant gratification", and most will go into debt to achieve it.

Oh! My Grandfather worked forty years for one company and retired by the age of sixty. He died at the age of eighty-seven, and "his slate was clear"!!

[HDDAN]

I tried to pay for my SS with my Amex card and the dealer said NO! They must pay a fee to the card company and it is a percentrage of the sale. I had a different problem with mine. I had a really big down payment ($28,000.00) and only wanted the loan for my credit report. Some of the banks actually turned me down because I was not borrowing enough money.

[Rockies4]

I borrowed $10,000 on a 0% interest credit card plus put down $2,500 of my own money. Cost of doing business with the credit card company was $300.

I'll have the credit card paid off by July and my car payment will be $450 a month.

That's the only way I could figure out how to move monies around to afford one.

And I absolutely love my Camaro. Best decision I've made in many a year.

Rockies4

[Gone to the bowtie side]

Originally Posted by 2Muchmark

snip

If you have a high interest credit card (18% or higher), you may not qualify. And even if you do, cancel this card - you're a sucker and are being ripped off. But if your card is a 7-9% card, you should qualify.

snip.

I used to have two credit cards with 7-9%. I did all of the right things with them (don't carry a balance, etc) except they up the rates regardless. They were both upped to 17%. "You're a great customer with awesome credit, screw you" Good luck finding a 7% anything right now, they just aren't there.

[Darth_Emma]

Or save your money then pay cash and don't finance it.