Originally Posted by vtec to vvel

My opinion:

We're in a bit of a weird spot. On one hand, due to COVID, there still is a global supply/parts/labor issue. On the other hand, the feds are trying to fight inflation and raising rates beyond belief (three 75 bps raises YTD), with a few more increases expected by the end of the year. While the feds are trying to discourage spending to bring inflation under control (which is good for a still qualified buyer, as the dealership knows there will be less potential buyers and in theory should be more likely to work with a buyer to get their business), this still doesn't help with the supply/inventory side. At least in real estate, this contributes to the inflated home prices and values, and I would imagine this would be the same concept for the auto industry with elevated car pricing and values.

In regards to the 5.9% rate, was that the bank/lender talking or a car salesperson that gave you a random number? Especially in today's climate of a rate-rising environment, what you could do is go to your local bank and see if they have an option to do a soft-pull on your credit and see what you could qualify for in terms of loan amount and rate - that way, you have an idea of where you stand and not just relying on the F&I Manager of hopefully doing their job. Just keep in mind though that the F&I Manager may be able to offer a better rate through his lender network than what your bank/lender could offer (this is the reason for the soft-pull as you don't want your score potentially decreasing). Think of it this way: if you get pre-approved through your bank, you are a $29K customer vs the dealership being a $1 million+ customer to the bank, so who's more likely to get a better deal?

I come from mortgage lending, so things may be a bit different in auto lending. When it comes to rate, no bank/lender has a magical rate, and should be relatively the same across the board. For example, if you see 4 gas stations at an intersection, there is a good chance they may offer different pricing for gas, but by a few cents difference and not by a dollar - same principle with interest rates.

I will say that I think you do have some leverage to negotiate because you are going in with a trade-in and you have the potential to the dealership to be the starting domino effect of yielding multiple deals for them because of your trade-in.