Car Loan Arizona: Helpful Tips
Arizona Attorney General Terry Goddard’s office may have said it best when it issued a statement regarding dealer markups on Arizona car loans. Regardless of whether it is a Phoenix car loan, a Tucson car loan or a Tempe car loan, consumers sometimes pay hundreds or even thousands of dollars extra. Why? Because of higher auto loan interest rates charged by dealers. To be clear, most Arizona dealers are honest and forthright, but here’s how it works in a hypothetical dishonest dealership in Phoenix.
Car loan Phoenix example:
- The lender authorizes the dealer to make a loan to you at an 8% interest rate based on the prevailing rates and your credit worthiness.
- The dealer tells you you’ve been approved for an 11% Phoenix car loan. You and the dealer sign a purchase agreement to that effect.
- The 3% difference between the lender approved car loan rate and the rated charged by the dealer is called the “mark-up”. A portion of the mark-up goes to the dealer in the form of his/her auto loan "participation" from the lender.
Taking out a Phoenix car loan? Protecting yourself is easy:
Before going to the dealership. Know what interest rate to expect – Our Arizona auto loan rate calculator will help you estimate your interest rate. Also, shop around in advance. Use services like SmartCarCredit to get your profile in front of both dealers and lenders. Compare Arizona car loan quotes from multiple sources.
At the dealership. Tell the dealer in advance that you will want to know the car loan rate at which you have been approved and what, if any, markup is applied to the car loan rate that you are offered. If the rate you receive is worse that the one you were quoted elsewhere OR you do not think the dealer’s markup is acceptable, turn down the dealer’s terms and obtain financing elsewhere. Read more about working with used car dealers.
Knowing what rate you can get Arizona car loans will help you negotiate better terms with the dealer. Use your approval as leverage to get a lower rate. One SmartCarCredit client had already been approved by a lender at 15%. Hustling to sell the car, the dealer got her a much better rate at 6%. The dealer got the profit on the car. She saved a LOT OF MONEY on the financing just by being smart.
If you think that the interest rate you were charged was marked up in a discriminatory manner, or that the dealer was not truthful with you, contact the Attorney General’s Office at (602) 542-5763 in Phoenix, (520) 628-6504 in Tucson and toll free in the rest of the state at (800)352-8431.
Need help running the numbers on your Arizona car loan?
Car loan Phoenix, Tucson or Tempe: You'll want to try our Arizona Car Loans Calculator
Know your Arizona car loan payment amount: Try our Arizona Car Loans Payment Calculator
Know your Arizona car loan rate: Try our Arizona Car Loans Rate Estimator Disclosure: We developed the content for SmartCarCredit™ while working with automotive industry clients. We hope you find it helpful in making informed decisions. While we believe the information to be accurate, we do not guarantee its accuracy.
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