car loan

[kabute13]

Which is more advisable, car loan thru bank or in-house?
1. Paper works/requirements
2. Approval and processing lead time
3. Payment method

Thanks!


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[servantguy]

Which is more advisable, car loan thru bank or in-house?
1. Paper works/requirements
2. Approval and processing lead time
3. Payment method

Thanks!


Sent from my iPad using Tapatalk

Hi,

1) If you want to pay the least overall, bank is always better. The problem is that the downpayments tend to be higher compared to in house (approx 20% minimum), and dealerships tend to deprioritize you (if the car you want is in demand, and there are 10 of you in line, the dealerships have a way of letting in house clients get the car first) because the DI (Dealer Incentive) tends to be lower when someone is a bank customer (or cash for that matter). Which brings me to:

2) In house is more expensive, but in many ways more convenient because your Sales Associate will mediate for you. They are not doing this just to be nice; part of it is because, if you compare, it's not uncommon for In House interest to be 10% more than Bank - even if the loan originates from the same bank. This is because the addons, "freebies", and the customarily higher dealer incentive, all get added to your total loan. This is also why the downpayments on "All In" promos are low. Pay less up front, pay for more incentives and stuff, and get more interest added to your loan = much more expensive, think hundreds of thousands of pesos over the life of the loan. But, since you pay more, you get prioritized when the unit you want is in demand.

Requirements-wise, they are essentially the same. Same docs needed. Same CI. Though perhaps, for in house, there may be an extra push from behind the scenes to get you approved because they (the bank AND dealership) will make more money off you.

So the question is. Is the extra convenience of in house worth paying hundreds of thousands of pesos more for?

To share my story, I sort of went half way. I went bank. Then when my SA said the line was very long for a Pearl White Fortuner V, I said "what can we do? I fly into Manila for one weekend and won't be bank for 3 more months."

She wanted me to go in house and said I would get a car right away if I did. And she showed me the math. The interest was 12% more. Meaning the car was going to be 400k more once everything is paid and done.

I said no. I asked: "what else can we do?"

I ended up paying 2% more out of pocket to match the "In House" 3% Dealer Incentive (Apparently the bank incentive is between 0.5% and 1%). And in doing the Math, I still saved more than 300K over the long run because I kept the lower bank interest.

You know what happened?

I flew into Manila Friday morning, went straight to the bank and signed the loan docs 9am , went to the dealer in the afternoon, and I was able to take a Pearl White Fortuner V out the same day.

Funny how that works huh.

Sadly, money talks, but you can still make your money talk smart...

- servantguy -

[karlpublic]

Nakuha ko na po yung Sasakyan. 21k lang declared salary ko. At wala ng ibang kinuha sakin. Ang galing lang.
IT, COE 2 valid ID, proof of billing ang requirements
Baka nagkamali sila ng approval? ))

Congrats on your soon to be new car.

Alam ko hindi naman sila mahigpit if yung price ng vehicle is mababa lang naman. Pero pag papalo na yung monthly amortization mo ng 15k+ per month, may chance na magtanong pa sila ng other source of income mo.

But it doesn't matter na since approved ka na

[karlpublic]

once you start paying the monthlies, i do not think they will decline you anymore.
what will they do? repossess the car and refund you in full?
what are they going to do with a slightly used car?

sit back and enjoy your good fortune, sir.

btw...
mirage. hatch.
nice.

Thanks! nakuha ko na yung sasakyan. Wala naman naging problema nung release, 1 day lang samin na sasakyan. Yun nga lang wala pa rehistro 2-3 weeks daw? Di tuloy magamit. :/

[pinkies]

Confused lang re: inhouse financing and bank financing. Others claimed kasi na inhouse financing pero pinapasa sa bank for approval. In my understanding pag in house financing ung dealer ang mag ffinance ng car just like toyota financial services? tama ba ako?

[servantguy]

Confused lang re: inhouse financing and bank financing. Others claimed kasi na inhouse financing pero pinapasa sa bank for approval. In my understanding pag in house financing ung dealer ang mag ffinance ng car just like toyota financial services? tama ba ako?

Hi, both are sort of true, and it depends on what your sales person means. Strictly speaking the dealer should finance your car if they have a finance arm, but depending on your approval situation, in-house can mean the dealer working with a partner bank to get you approved, which may be convenient, but can hit you with higher rates and fees compared to going straight to the bank. As an example, I went straight to UCPB, but my sales person offered me an "in house" option through ucpb as well. The in house option through ucpb had higher rates compared to direct. Imagine that. *sarcasm*

- servantguy -

[_Qwerty_]

pag in house, sa bank pa din.. kaya lang may dagdag na agent mo.. so better go straight to the bank..

Confused lang re: inhouse financing and bank financing. Others claimed kasi na inhouse financing pero pinapasa sa bank for approval. In my understanding pag in house financing ung dealer ang mag ffinance ng car just like toyota financial services? tama ba ako?

[kishAn]

Confused lang re: inhouse financing and bank financing. Others claimed kasi na inhouse financing pero pinapasa sa bank for approval. In my understanding pag in house financing ung dealer ang mag ffinance ng car just like toyota financial services? tama ba ako?

sinubmit lang ng agent mo sa partner bank nila. Usually sa mas mabilis at mas mataas magbigay ng incentives but dealer rate ang gagamitin which is more than doble ng rate ng bank if you go directly with the bank


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[pinkies]

Yun lang if direct sa bank strictly 20% ang dp plus chattel mortgage. May chance ba na mababaan ung dp?

[dr. d]

Yun lang if direct sa bank strictly 20% ang dp plus chattel mortgage. May chance ba na mababaan ung dp?

unless there is a law that specifically indicates otherwise, "napag-uusapan lahat yan".
it's a business, po!
all you need is a bank friendly enough to you.

but in my opinion, if customer has issues with the down payment, it may be an indication that said buyer will have problems with the monthlies later on.

[pinkies]

unless there is a law that specifically indicates otherwise, "napag-uusapan lahat yan".
it's a business, po!
all you need is a bank friendly enough to you.

but in my opinion, if customer has issues with the down payment, it may be an indication that said buyer will have problems with the monthlies later on.

so does it mean negative ang impact sa bank if nanghingi kami ng discount sa dp?

[dr. d]

so does it mean negative ang impact sa bank if nanghingi kami ng discount sa dp?

hindi naman. even multi-millionaires ask for discounts. only tourists do not ask for discounts.
but what every car buyer should do, before they plunk down their hard-earned money, is to honestly answer the question, "can i really afford a car?"
the banks' bodegas are full of rematado cars...

[ssaloon]

Personally, I've never experienced the car dealer/bank giving a discount on the required DP. Usually, (1) sa full unit price binibigay ang discount which will entail a lower monthly amortization, or (2) free chattel mortgage. DP will always remain at a fixed percentage of SRP.

[Rum007]

hindi naman. even multi-millionaires ask for discounts. only tourists do not ask for discounts.
but what every car buyer should do, before they plunk down their hard-earned money, is to honestly answer the question, "can i really afford a car?"
the banks' bodegas are full of rematado cars...

mga Sir tanong ko lng mas matagal b release ng unit pag bank PO sa in house financing?

[servantguy]

mga Sir tanong ko lng mas matagal b release ng unit pag bank PO sa in house financing?

It's not a written rule, but in general, yes, especially for in demand units. The dealer will prioritize "in-house" whenever they can because they will earn more out of that transaction vs. Bank PO. As an example, a bank PO might include a 1% DI (Dealer Incentive), whereas an In House transaction may include 2% or 3% DI easy.

So, say the dealer has 15 units of the car you want. And you are technically the 7th in line but use a bank PO. Don't be surprised if you magically end up further down the list in reality because of your bank PO, or conversely end up first in line if you negotiate some deal that will make the dealer some extra money (e.g. via accessories, etc).

Or you can just wait. You'll get your car eventually. But you will wait.

- servantguy -

[kai s.]

Personally, I've never experienced the car dealer/bank giving a discount on the required DP. Usually, (1) sa full unit price binibigay ang discount which will entail a lower monthly amortization, or (2) free chattel mortgage. DP will always remain at a fixed percentage of SRP.

Sakin, sa downpayment inapply yung discount.

Choice ko yun kung saan ibabawas yung 25k discount offered by my agent: Sa downpayment or sa total unit price. I decided na lang sa downpayment i-apply kasi hindi ako aabot sa minimum loan amount to qualify for my bank's free first year insurance. Free chattel pa rin naman, along with the other usual freebies.

[ssaloon]

Sakin, sa downpayment inapply yung discount.

Choice ko yun kung saan ibabawas yung 25k discount offered by my agent: Sa downpayment or sa total unit price. I decided na lang sa downpayment i-apply kasi hindi ako aabot sa minimum loan amount to qualify for my bank's free first year insurance. Free chattel pa rin naman, along with the other usual freebies.

Yup, sakin din they offered this, but I chose to have it applied sa sticker price. FWIW, my DP was above the minimum 20% usually required by the bank so I didn't have to haggle with a lower sum.

TS correct me nalang if I'm wrong kung mali intindi ko sa angle ng query mo.

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[babkalakal]

I think maski toyota financial services ka mag loan pinapasa lang din nila sa metrobank but of course on TFS terms which in the long run you end up paying more for your car.

[dr. d]

mga Sir tanong ko lng mas matagal b release ng unit pag bank PO sa in house financing?

the more layers of purchase stations, the slower the paper goes.
but yes... the usual determining factor is the human factor. "how motivated are the people, in pushing the papers to the next table?"

[dcvingkamotekid]

>CASH is KING!!!
>>BANK Loan/P.O. = Higher Downpayment / Lower Interest Rate
>>>DEALER Financing = Lower Downpayment (ALL-IN promo) / SKY HIGH interest rate