Most New Vehicle Brokers don’t even do financing. They can either get the co-operating dealer to arrange the loan, or you get your own financing. Sharp Cars offers every conceivable type of financing for your new car. And, in most cases, we simply have you sign the financing documents while you are taking delivery of your new car.

Bear in mind that, in most cases, the finance charge is more than the dealer’s profit on the car you get! Financing choices are actually the most important decisions you will make in getting a new car.

1) Should you finance your new car, lease it, or pay cash?
If you normally trade cars every 2-5 years, and would usually finance the greater part of the purchase, you should seriously consider leasing. Besides the lower car payment on a lease, you also generally save, since you don’t pay the sales tax up front on a lease. That means that you actually borrow LESS money on the lease. However, if you normally keep a car longer than 5 years, make a large down payment, or pay it off very quickly, financing is usually your best choice. If your savings account is paying you less interest than you can get a car loan for, you may be better off to pay cash for the car. If you anticipate your return on capital will exceed the car loan rate, then borrow as much as you can on the car, and take your profit on the opportunity value of the cash you retained. We will “run” all the numbers for you, so your decision will net you the greatest savings and the lowest net payoff when you sell the car.

2) What is your credit score?
You (and we) need to know your Experian Auto-Specific score, so we know what rate and terms are available to you. Everything about financing is directly related to your score. We can’t tell you which financing deals are available to YOU without that all-important credit score. Five minutes with us on the phone is all it takes to know YOUR score! We do not charge you to get it for you, and we do not disclose it to anybody without your permission. By the way, don’t check your score too often, or it will gradually drop! Wait till you are sure you know whom you are going to do business with, and check it through that company.

3) Should you take the low interest factory financing, or the rebate?
A LOT of our clients are really excited about zero percent financing, and that’s good. But, it’s not always the best way to save on interest. You see, in most cases, you have to give up the rebate to get the special financing. Let’s say the rebate is $2,500. If you take the zero percent and give up the $2,500, rebate, how much did your financing really cost you? $2,500, right, because, by giving up the rebate, you had to over-borrow by $2,500. So, in effect, the “interest” on your zero percent loan is the $2,500 rebate you gave up. We have many other low interest programs, which you could use. Let’s say that we get you an outside credit union or bank loan in which the total interest would be $2,000. Bear in mind, you are borrowing $2,500 LESS on this loan, since you now get to take the rebate! IF you pay the loan out over the entire term, you finance $2,500 less, and your total finance charge is only $2,000, you SAVED $500.00. But, it gets better. Let’s say you pay off the loan a year early. If you had taken the zero percent loan, there would be no interest refund because there is no interest. BUT, since you originally borrowed the extra $2,500 to get the loan, your payoff is still dramatically higher. If, instead, you had taken the rebate with the low interest outside loan, and paid off early, you would get a refund of the unearned interest, ON TOP of the $2,500 you saved. In many cases, if you take our special low rate outside financing and don’t give up the rebate, your mid-loan payoff will be less. However, if the finance charge would have been larger than the rebate, the zero percent can be better, but sometimes, not if you prepay… and it gets even trickier as the rebates get bigger. PLEASE, don’t “assume” here. Let your Sharp Cars Auto Broker work through this with you, before you order your car. The correct decision could save you over $1,000. And, we suspect you just might have a better place to spend YOUR extra $1,000 than on your car financing!!

4) How long are you going to keep this car before you get rid of it? Will you have equity when you go to trade it?
If there is one pitfall that we see the most people stuck in, it’s this one. Over and over, we have people coming to us, wanting to trade in or sell a car that they still owe more on than it is worth! We feel so strongly about this that often “walk away” from a sales opportunity if it has the potential to “stick” you with the wrong payoff in the future. If we suspect this might be a future problem for you, we will figure the future payoff amount of your loan and the projected value of your car at that point. If you will still be “upside down” when you plan on selling the car, we will recommend changes in the structure of the deal or financing, so you will be able to trade out of your car when you are ready!!

5) All you need to know about prepayment costs:
It is illegal for a California lender to do an auto loan with a prepayment penalty. So, that means ANY lender or dealer you ask will tell you, “No, this loan does not have a prepayment charge.” BUT that doesn’t mean you won’t get penalized for early payoff! The “ever creative” auto finance industry has figured out LEGAL ways to ACCELERATE the way the interest is earned on your loan, so that the mid-term payoff is much higher than it should be. This scam has several names. The most common is “Pre-computed Interest”. It also masquerades under seemingly harmless names like “Periodic Time Balance Method” and “Add-on Interest”. Fortunately, there is a simple solution. Be sure the contract you sign is a “Form 553” and that it says “Simple Interest” at the very top. This means the interest is computed monthly or daily on the current balance, and not pre computed. Then, you’re safe. If the form number is anything OTHER than 553, or if it doesn’t specifically say “Simple Interest” at the top, do NOT sign it!!

6) Will you be needing to replace some other of your vehicles before your loan is paid off?
Let’s say your other car is getting older, but that you feel it has another two good years in it before you need to replace it. Let’s also say you take on a large payment on the car you are getting now, which you will still be paying two years from now when you need to replace the other car. What will you do then? That’s a concern we address when you get your car from Sharp Cars. If we don’t set up today’s deal correctly, it may “cramp your style” when you go to replace your other car, later. There are many ways to fix this, but most of them require advance planning. We can help. Call us!

7) Let Sharp Cars do a “hypothetical” deal for you before you even go shopping!.
Given enough time, you can do this on your own, but, it’s SO easy just to call your Sharp Cars broker and have us do it all for you. We can “build” any car on our advanced new vehicle pricing program, tell you all the current rebates and incentives on a given car, figure all the finance options available to you, and give you all the possible ways to get the vehicle of your choice, if you were to decide on it. And it only takes a few minutes to do this! What’s more, we can do a comparison between a couple of different makes or models, if you would like. And you don’t ever have to go to a car lot, or even leave your desk! You can add or eliminate possible car choices quickly and easily, and you get the input of an experienced “all makes and models” broker, to boot! Once you settle on a specific vehicle, we then locate an actual vehicle and get back to you with the exact final pricing. This one feature of our service can save you days of car shopping energy!

In conclusion, let us repeat that the financing decisions you make, when getting a new car, are AT LEAST as important as which car you choose and what you pay for it. And, if you decide using a New Car Broker is for you, we are unique among brokers, in that we offer a full line of bank, dealer and credit union financing, not just a good deal on the car you choose! And, we go out of our way to be sure that every aspect of your decision is the best one available to you at the time. What’s best for you is what’s best for us.