I get a loan from my bank for $5,300 an i haggle the price down to 4,000 from a used car dealership. what happens to the other $1,300? or does the bank wait to write the check intell i tell them the price of the car?
I got a bank loan for $5,300 and i haggle the car price down?
31
May
xx_satanic_mechanic_xx
May 31, 2010 at 11:41 am
Usually, the bank will fund the dealer directly. The dealer will submit to them a buyers’ order and purchase agreement. The bank cuts them a check for the total. You were pre-approved for up to $5300. If the car is valued lower, they will typically not cut you the difference. After all, they are a bank and have to protect themselves. Part of that is keeping loans in line with the value of the cars. If they were loaning $5300 on a car worth $4900, that would be doable. But if the purchase is $4000, over-advancing an extra 30% is not good business sense. And you don’t want to owe $5300 on a car worth less than $4000. Best to let the loan go through and keep financially fit
Benjamin J
May 31, 2010 at 11:48 am
Your were approved for up to $5300. The dealer will submit the final price to your bank and the bank will fund it and you will have a $4000 loan for the car. Now was the price with or without tax? That could be and extra $400 or so depending on where you live.