Most people have the part down pat where they pick out the car that they want to purchase, which is usually based on the amount of monthly payment they can afford, and signing the deal. If the payments are affordable, they like the car, and they qualify for the loan, that is all most people need or want to know.
If the car can be driven home that day, success in purchasing the automobile has occurred. However, the entire financing process is largely misunderstood by most of the automobile buying public.
Lending institutions who service the automobile industry engage in a fiercely competitive battle in looking for business. Since the main players in placing these loans are the car dealerships and used car agencies, these entities are catered to in a big way. Consequently, the lenders will seek to entice the retailer by offering a profit to them through the financing.
The lending institution establishes a “floor rate” for what the financing will cost. The dealer is then allowed to add on a “dealer markup” which can be as much as an additional 2% to 4%. Then the dealer or used car company is paid this amount at closing which is pure profit. This, however, does not do much for the consumer, except to raise his or her payments, except it is transparent to the ultimate buyer.
However at Ignition Financial, based in Austin, Texas, the consumer is allowed to refinance his or her car note, and in many cases, the amount of the payments comes down to the point where it can get very exciting. In fact, once the math is done, many consumers will say, “Please slash my payments as much as possible.”
If a consumer were to have done business with a bank or credit union, he or she would have originally done nearly as well as the original rate quoted to the auto dealer. Unfortunately, few go that route and end up paying higher payments.
When people refinance their car loan successfully, a whole new world opens up, more cash is available and the money saved can be redirected to other loans, taxes, savings, emergencies, medical bills and an entire host of other needs.
The very experienced staff at Ignition will work with anyone who has a previous car loan, at no obligation. They will run the calculations based on the credit of the consumer and will arrive at the exact new payment required. It just makes sense, and it works.