Liss Maynard, a 37-year-old assistant principal from Douglasville, Georgia, wasn’t looking forward to the new year. For the past three years, she had dished out thousands of dollars getting her 1997 Chrysler Sebring to pass the state’s emissions inspection. To jump-start her year, she decided to purchase a brand-new Chevrolet Equinox.
A savvy shopper, Maynard used her father’s General Motors Employee Discount Plan to get the best price. Although the Equinox listed for $26,475, she saved more than $2,600 off of the sticker price. In addition, Maynard knew she could maximize her overall savings by shopping around to get the best interest rate on the car loan. Although GM offered a $1,000 rebate or a special advertised interest rate of 6.9% for 60 months on the Equinox, Maynard was eligible for only one of the incentives based on GM’s program rules.
So Maynard shopped around at several dealerships, went to Websites such as www.bankrate.com, and contacted her credit union. Ultimately, she found a competitive rate of 6.4% via eLoan.com, but she went with a dealership that offered her the same rate for 60 months because it allowed her to take advantage of the rebate. All told, Maynard saved more than $4,700, by getting a better rate, a manufacturer’s rebate, and taking advantage of GM’s employee discount.
According to the J.D. Power and Associates 2006 Consumer Financing Satisfaction Study, more than 42% of new car loans were funded by sources other than the automakers’ in-house finance companies, also known as “captives” in the industry. The same study revealed that the average interest rate funded by credit unions was 5.7%, while bank and in-house financing loans averaged 6.8% and 5.3%, respectively. So, as you can see, it doesn’t hurt to shop around for the best rate on your next vehicle.