Car Loan Bank advise

kenny_gua wrote: ↑ Hi, I have to buy Toyota RAV4 and price is $25000 and want to take Car loan from bank. I have checked with Toyota dealer and they offering 5.99% interest rate which is high. Is this interest rate OK? OR how much lower rate I can get get from bank. My credit is good (725 score in Equifax). Please advise.

Bank loan will be same or higher. Never heard of anyone getting a better rate through a bank vs. the dealer for a new car purchase.

Is this a used car ? I see brand new is offering around 3.5% for 48 months term.

That $25K loan @ 5.99% = $3000 in interest alone (for a 4 yr term)

The only way to get a better rate from bank is to do a reverse mortgage if you can. Did it a few years ago and the saving was signifant. However to make it worthwhile the bank have to agree to waive all the costly fee (i.e. fee for appraisal, lien registratoin and removal, mortgage closing, etc).

kenny_gua wrote: ↑ Hi, I have to buy Toyota RAV4 and price is $25000 and want to take Car loan from bank. I have checked with Toyota dealer and they offering 5.99% interest rate which is high. Is this interest rate OK? OR how much lower rate I can get get from bank. My credit is good (725 score in Equifax). Please advise.

Do you own a house? Are you paying mortgage for it and are you the registered person on the mortgage? If so, then as long as you have equity in the house you can get Heloc for a lower rate. Ask your bank financial advisor for more details.

csi123 wrote: ↑ The only way to get a better rate from bank is to do a reverse mortgage if you can. Did it a few years ago and the saving was signifant. However to make it worthwhile the bank have to agree to waive all the costly fee (i.e. fee for appraisal, lien registratoin and removal, mortgage closing, etc).

Not everyone qualifies for a reverse mortgage. You have to be at least 55+ years old. Plus, it's not a good idea to do it for a car loan. The rate isn't that much better either, as it's usually 5+%.

rate from dealer will be better i think because they do so much volume and are a little more trustworthy than us

i am with td and have an even higher credit score and was offered something like 8 or 9%
so i stuck with dealer for 4.99%

Unless a manufacturer is offering low-rate incentive loans, car loans are never cheap given the asset is depreciating (a reason why leases require not-insignificant downpayments) and not particularly secure.

CIBC offered me 5.5%.

Has anyone heard of anything cheaper than that? What about a credit union?

kenny_gua wrote: ↑ Hi, I have to buy Toyota RAV4 and price is $25000 and want to take Car loan from bank. I have checked with Toyota dealer and they offering 5.99% interest rate which is high. Is this interest rate OK? OR how much lower rate I can get get from bank. My credit is good (725 score in Equifax). Please advise.

Is that 25k the cost including taxes and fees? If so it must be. If so that interest rate is within range for a used vehicle that fits within the 1-5yr old qualifying age range for most banks.
If you want a lower rate your best solution is to apply for a secured personal line of credit at your own bank.

If you truly want a lower rate just pay off the loan early so as to reduce the COB associated with that rate.

Find a credit union or if your work is affiliated with one. They usually will offer you a better rate than what the dealership will offer you. Banks not so much.

I see base 2019 New for 27.5k with 4.99% for 64 months https://www.toyota.ca/toyota/en/build-price/rav4

thriftshopper wrote: ↑ Unless a manufacturer is offering low-rate incentive loans, car loans are never cheap given the asset is depreciating (a reason why leases require not-insignificant downpayments) and not particularly secure.

But the vehicle in question is a Toyota and normally anyone buying a Japanese car will keep it for years and years because of it's reliability.

lamboman wrote: ↑ But the vehicle in question is a Toyota and normally anyone buying a Japanese car will keep it for years and years because of it's reliability.

Still depreciates. Still can disappear. Resale value is assuming the debtor actually takes care of the vehicle. If I were a bank, I wouldn't lend more than 1/2 the new value of the car. Auto loans are highly profitable for some. Not in the same category but I knew someone who was repo man for a used car dealership. He claimed the owner(s) priced and sold their cars so that the downpayment covered the dealer's cost of the car so all interest payments were pure profit.

Some bank rates and amount they will loan will depend on the year of the vehicle. Also the dealer is always the better option. They have deals with banks due to volume.

kenny_gua wrote: ↑ Hi, I have to buy Toyota RAV4 and price is $25000 and want to take Car loan from bank. I have checked with Toyota dealer and they offering 5.99% interest rate which is high. Is this interest rate OK? OR how much lower rate I can get get from bank. My credit is good (725 score in Equifax). Please advise.

Add another 8k to 10k. You can buy a brand new RAV4 with way better interest rate. More money pay to the car itself, less money paid to interest.
Brand new car, problem free.