Confused about financing for new car

[jlynn275]

got approved through Cap One online, found a used car and are putting $4000 down. So we will pay the remainder with the blank check from Capital One. Do I sign the financing contract with the dealership with the terms from Cap One?

[LadyInTheRed]

I'm not familiar with how Capital One's Blank Check works, but I have a story that may be relevant. I once went into a dealer with pre-approved financing from my credit union. I was supposed to take the pre-approval letter to an approved dealer and they would write the contract with my credit union. The dealer ended up financing the car on the same terms my credit union offered. I didn't notice it until after the deal was done. I was so focused on the terms, I didn't notice that the finance contract was with the dealer, not the credit union. I suspect this happens all the time and the dealers make a lot of money off it. If you are presented with a financing contract and Capital One is not the lender, I suggest you tell them you are going to stick with Capital One unless they can offer you better terms. You just might get a better deal.

ETA: After reading at http://www.capitalone.com/autoloans/..._03_T_ALFAQNAU, I don't think you should sign any financing agreement at the dealer if you use the blank check. Fill in the amount on the check and give it to them with the dealer instructions that were included with the check. If you read the dealer instructions, I bet there is nothing there about having you sign a finance agreement. Make sure you have fulfilled all of Capital One's document requirements before going to the dealer.

[daxtell]

i recently used cap one's blank check and after i got the approval i made sure i faxed the required documents and information to them that they required before i used it. i then waited a few days for them to verify everything and i got a confirmation email and call that it was okay to use the check. i didn't want any problems at the dealership. plus you have to make sure you go to a dealership cap one allowed. after that, it was just like taking cash to pay for a car literally. and it was hassle free. your deal is with cap one so all you are doing at the dealership is agreeing on a price for a car, giving them the check and just signing the necessary paperwork like dmv title/registration, tax stuff. then you just make sure the dealer faxes to cap one the 3 documents listed on your package they mail to you and thats it. good luck! after that you just wait for the letter from cap one where they finalized your paperwork after receiving it from the dealership and telling you how to make payments.

[helpmeout]

Since you have outside financing, there should be no financing contract with the dealer. I used a Cap One blank check to buy the car that I have now. I didn't get a financing contract to sign, I got a bill of sale to sign. No mention at all of financing. I would ask your dealer why they are asking you to sign a financing contract when you are not financing through them. I would also let them know that if they can do better than what you have, you will go with their financing.

[IBroke]

Since you have outside financing, there should be no financing contract with the dealer. I used a Cap One blank check to buy the car that I have now. I didn't get a financing contract to sign, I got a bill of sale to sign. No mention at all of financing. I would ask your dealer why they are asking you to sign a financing contract when you are not financing through them. I would also let them know that if they can do better than what you have, you will go with their financing.

Yep, that's how it works.

[jb1231]

Daxtell, do you or anyone else understand the LTV (loan-to-value) thing? I got my package today and I'm just a little confused. I'm approved for up to $28,710. The car I want is new, about $20K MSRP.

[IBroke]

Daxtell, do you or anyone else understand the LTV (loan-to-value) thing? I got my package today and I'm just a little confused. I'm approved for up to $28,710. The car I want is new, about $20K MSRP.

As far as I know, the LTV-restriction protects the lender of lending too much money. The financed car is their collateral. If they have a 110% LTV limitation and the car has a VALUE of $20,000, you can't finance it for more than $22,000. Imagine you would have a car with negative equity and you would roll $8,000 of that "upside-down" amount into your new loan. You would be financing $28,000 which you would be approved for but the lender would only have a collateral with a purchase-price of about $20K. That would be too risky for them so they have a LTV-limitation.

If the value of the car you want to buy is equal, above or only slightly below the agreed-on purchase-price, you don't have to worry about the LTV.

[jb1231]

Thanks for replying. Is this less of a concern for newer vehicles then? Sorry for the dumb questions. It's been over 10 years since I last purchased a car so I'm rusty at remembering all the fine print.

[IBroke]

Thanks for replying. Is this less of a concern for newer vehicles then? Sorry for the dumb questions. It's been over 10 years since I last purchased a car so I'm rusty at remembering all the fine print.

There's no such thing as a dumb question!

You're right. Unless you are planning on rolling any negative amount from a previous vehicle into the new deal, this shouldn't be an issue. If you buy a newer car at or below MSRP, I don't think CapOne could claim you bought above value.

And pre-owned cars shouldn't be bought for more than what they are worth in the first place..

[jb1231]

Ah! Got it. Thank you so much. I was scared there for a moment. I've been without a car for over a year so I'm excited at the idea of finally having reliable transportation. Here's hoping the shopping experience goes well and without complications!

[locolady]

Ah! Got it. Thank you so much. I was scared there for a moment. I've been without a car for over a year so I'm excited at the idea of finally having reliable transportation. Here's hoping the shopping experience goes well and without complications!

I use the program by far this is easier method of buying a car by side having all cash. The 110% was a concern to me also but on a new car it's a non issue. I liked for anyone coming out of BK to try this for there car purchases. I got a secured card first then 2 month later applied for a auto loan and was approved.