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Hi,

My parents now may be purchasing a 2015 Accord LX and are wondering what are the advantages with a 36 month loan with Honda Finance vs Capital One Auto? Do most folks here always
use Honda Finance??

Thanks
 

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Honda finance can work out low APR's, but if your credit is better than average so can banks/credit unions.
Honda Financial also likes repeat customers, so there may be killer incentives on your next car purchase.
It's probably a horse apiece.
 

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I have 2 Honda's that are financed through Honda Financial. When buying my 2nd Honda they noticed that I was already a customer whom financed with them before and I got hooked up because of it.
 

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Try a local credit union if there is one by you. You may be able to get a better rate. Capital one usually has higher rates from what I have seen.
 

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Right now you're going to have a hard time finding a bank/CU that will beat the current Honda promo rate of 0.9% on that Accord. If your parents have the credit rating to qualify, I'd go with the Honda note.
 

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Crunch the numbers is all you can do.
You may be able to negotiate a better "cash purchase price" if you secure your own financing. But at the same time, your own financing will probably be at a higher interest rate. So you need to do the math to see if the cash purchase savings outweighs the higher interest rate..
 

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Let's use an example with made up numbers.

Say you can get the car for $25000 financed at 0.9% through Honda. Payments will be $704/month over 36 months.
Now let's say you can negotiate a cash purchase price of $23,500 for that same car and you secure your own financing at 3.9%. Payments will be $693/month over 36 months. In this case the cash purchase savings outweighed the higher interest rate by $396 so that would be the way to go.
 

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Say you can get the car for $25000 financed at 0.9% through Honda. Payments will be $704/month over 36 months.
Now let's say you can negotiate a cash purchase price of $23,500 for that same car and you secure your own financing at 3.9%. Payments will be $693/month over 36 months. In this case the cash purchase savings outweighed the higher interest rate by $396 so that would be the way to go.
That example would never exist in real life. No dealer would offer a lower selling price if you brought your own financing. It would be the opposite, if anything.

Dealers make money on the financing; if you bring your own financing you're taking money out of his pocket. He's not likely to give you a $1,500 bonus for doing that.
 

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That example would never exist in real life. No dealer would offer a lower selling price if you brought your own financing. It would be the opposite, if anything.

Dealers make money on the financing; if you bring your own financing you're taking money out of his pocket. He's not likely to give you a $1,500 bonus for doing that.
Works different in Canada then. Here you'll always get a better price paying cash.
For example just right now on honda.ca there is a cash purchase discount of $1500 advertised for the Si.. That is a MANUFACTURER incentive, so it doesn't come out of the dealers pocket. And then of course you'll still be able to negotiate down the dealers profit beyond that. If you finance through honda, there is NO manufacturer incentive. So you'll only be able to negotiate down the dealers profit going that route.
 

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Well, the presence of a manufacturer incentive in that mix changes everything. You didn't mention that before. :) Basically you're being given the choice of taking your subsidy on the purchase price or on the financing, but no double-dipping. In that case yeah, it'll be close to a wash. But there's not always a manufacturer cash incentive, is there?
 

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Does Honda Finance still offer $500 Flex Cash if you finance through them? They used to.

Car manufacturers heavily subsidize purchase money loans in order to offer interest rate of 0%, 0.9%, 1.9%, etc. So, typically, Honda loans would have much lower APR than third party loans (credit unions probably come the closest), with the same FICO score.

Watch out for car dealers sticking you with a third party loan (with higher interest) so that they can get a cut of the loan payments. They do that by telling you that you couldn't qualify with Honda (lie), sometimes even after you drove the car home (they will ask you to re-sign new documents with a higher rate).

Review the Truth-in-Lending Statement carefully before you sign the Financing Agreement, make sure you get the APR you were promised and the term is the same. Dealers are known to make a mistake (intentionally or not), if you know what I mean. Make sure that any third party loan can be prepaid without penalty.

Otherwise, there is little difference between Honda and third party loans.

Mick
 

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When I took out my loan for the Si, I got 0.9% for 48 months. I did shop it, and nobody else could even get close to that. The dealer showed me a page with my FICO score on it during the paperwork, so there was no possibility of any chicanery about creditworthiness.
 

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As someone that sells cars for a living, if you intend on being a Honda repeat customer, go with Honda Financial. Otherwise go with Capital One. Cap One is one of the few banks that ignores your actual credit score and bases your interest rates off of your history with them. They're a strong competitor but they won't be able to hold a candle to someone with a couple of previous loans through Honda Financial. Depending on where you live you may also want to look into finding a credit union.
 

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Recently, a friend of mine took out a car loan and got into a serious accident and is still in the hospital. It so happened that he was left disabled and will no longer be able to get out of bed, although the accident wasn't his fault. Unfortunately, Debt Collectors visit him and his parents to get the loan back. You should never take out a loan for a car, since it's a passive property that won't bring you money, but on the contrary will spend your money. In such a situation, there's no way out, and my friend has to face daily collectors that don't allow him to live normally. Turning to the police, he was refused, as they do everything according to the law. To never get into a situation like this, never take a car on credit.
 

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A huge majority of people who buy cars do it on credit. And an even huger majority don't become disabled during the course of the loan.

If you need to finance a car or you won't have a car, then finance it. Worse comes to worst, if you can't drive ever gain, they can take the car.
 

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if the accident wasn't his fault, get insurance and lawyers involved. i'm sure your friend should have enough money to do what they want in the near future. and if they can no longer drive, call the bank, tell them that they can have the car back.

as scotty said, most folks need a loan to buy a car. they ain't cheap anymore. repairs nowadays cost as much or more than the first few cars i ever purchased.
 

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Recently, a friend of mine took out a car loan and got into a serious accident and is still in the hospital. It so happened that he was left disabled and will no longer be able to get out of bed, although the accident wasn't his fault. Unfortunately, Debt Collectors visit him and his parents to get the loan back. You should never take out a loan for a car, since it's a passive property that won't bring you money, but on the contrary will spend your money. In such a situation, there's no way out....
Full coverage insurance and GAP insurance(combined) usually take care of financed vehicles.
 

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Recently, a friend of mine took out a car loan and got into a serious accident and is still in the hospital. It so happened that he was left disabled and will no longer be able to get out of bed, although the accident wasn't his fault. Unfortunately, Debt Collectors visit him and his parents to get the loan back. You should never take out a loan for a car, since it's a passive property that won't bring you money, but on the contrary will spend your money. In such a situation, there's no way out, and my friend has to face daily collectors that don't allow him to live normally. Turning to the police, he was refused, as they do everything according to the law. To never get into a situation like this, never take a car on credit.
Sorry to hear about your friend.

But that's what insurance is for. I don't think anyone should fear such scenarios to the point they won't finance/buy a car. If you can buy it cash, sweet, but if not....get the car.
 

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I financed my car through American Honda for the lease and when my lease ended I financed the purchase through them. Here I am paid off for over a year, and I would go through them again in a heartbeat.


Sent from my iPhone using Tapatalk
 

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Sorry to hear about your friend.

But that's what insurance is for. I don't think anyone should fear such scenarios to the point they won't finance/buy a car. If you can buy it cash, sweet, but if not....get the car.
Totally agree with you, but that problem with my friend come unexpectedly
 
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