I got my 1st car here in US in 2008. That was a year after I came to this country. You can only imagine how hard it is to get a car without any credit history and/or driving history. And since I don't have any credit history, I would need a co-signer too. I got my first (used) car at 16.9% APR. For a $15K loan amount, that's $375/month x 60 months. That means I would pay roughly $7,500 or 50% interest. I felt that I was at the mercy of the bank. But then I thought to myself, without any credit history, I wouldn't be able to get any good deal -- and this could be the best way to work my credit history. So, I did took the car.
I paid my monthly due on time. In one year, I was able to raise my credit score to Fair just by doing that. And so, in 2009, I was able to refinance my car loan with a different bank, and I was able to lower my APR to 6.49%. Here I learned the importance of paying on time.
3 years later, I was able to get a 0% interest 60 months new auto loan. But does that really matter? What the dealer did was just divide the MSRP (Manufacturer's Suggested Retail Price) by 60 months. If I didn't know any better, I would have taken the deal immediately. Little did they know, I did my research before I went to them. I learned that that the INVOICE PRICE is the one that you should look for. I told them that the monthly payment they originally gave me was still high for me and I insisted on the price I want (based on the invoice price). They won't budge -- and neither do I.
I told the salesperson that since we can't agree on the price, then it makes no sense to talk and deal. As I stood up and was about to walk out the door, the sales manager came to me and asked me if he could help me work out a deal. I told him if he could give me the price I was asking for, then I'll get the car that day. It took him at least 20 minutes to re-compute the numbers. Finally, he came out and gave me the monthly payment that I asked for. I left that facility a happy car owner. I won my car!
