I'm a couple of weeks away from F I N A L L Y buying my tc, and was wondering how financing works. I know i don't have to use toyota financing, but is it cheaper if i do? i don't belong to a credit union, but are there other bank/loan agencies out there that i can go through? if so, what's the process for paying the dealership? does the bank or loan agency give me a check? at what point do i give the dealership the money? sorry for so many questions, but i'm trying to get the best loan rate i can. thx in advance.

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I'll try to give you a crash course here. Basically whoever you finance the car with owns it until you have fully paid off the loan. Whether that is Toyota Finance, your own personal bank or credit union, or some other lender, you will pay them monthly and they charge you a certain amount of money (interest) to give you the priviledge of borrowing the money.

The interest rate you are given is based on many factors, including your credit score and the amount of credit you have previously. If you're a new borrower, it's tough (if not impossible) to get a super low interest rate, The interest can be based on how long you're borrowing the money as well, since a shorter term loan is less risky for the lender because you're paying them faster. I know many people on the board got a 5.9% interest rate with Toyota Finance, your credit union may be lower.

Being a new borrower, don't let the dealer try to add on extra fees for you borrowing from an outside lender. It's sometimes a shady tactic they use because whoever lends you the money is out to make money, that's why they charge interest.

Hope that helps a little. If not, check out this site:

http://www.bankrate.com/brm/green/auto/basics-intro.asp

 

Another thing to keep in mind is that Toyota financing for Scion vehicles is different from Toyotas themselves. Some dealers may offer 0% financing for Toyotas, but Scions have fixed rates. Currently its around 5.7% and up. Like jaydub said, the rate you get depends on how good your credit is. No credit = bad credit. If you know someone with good credit, have them co-sign.

You can of course take out an auto-loan from a credit union or bank, but keep in mind that Scion has a college grad rebate (if that applies to you) available through their financing plan only. Hope this info helps.

 

thx a lot guys for both pieces of advice. that site helped me quite a bit jay. i have a friend that is the finance mgr at the toyota dealership in town. maybe he can help me a bit as well. the fact that i saw the exact fm '06 tc shinin' yesterday makes me want it even more now.