European Stars and Stripes (Newspaper) - November 29, 1985, Darmstadt, Hesse                                Page 10 the stars and stripes Friday november 29, 19b5 letters More answers to letter about financing a car we recently ran a letter and answer about the Price of financing a new car. We inadvertently ran Only one answer from he cafes Europe although we had received three. The letter writer said he hesitated to pay the present annual percentage rates apr offered by local credit unions and american express. He mentioned the belter rates being offered by automobile dealers in the United states. In addition to the he cafes Europe reply we also received a reply from Vernon j. Payer president. Pentagon Federal credit Union Many automobile dealers and manufacturers have offered below Market rate financing to entice buyers. The 7.7 and 8.8 percent annual percentage rate financing has understandably created a lot of inter est in new cars. But can you afford to finance a new car with a reduced Rale through a dealer since the actual Benefit to Consumers of reduced apr financing Are somewhat murky let i examine some of the partic ulars that May be involved with this Low rate dealer financing. You May end up paying More for your car by taking advantage of dealer financing Al below Maricl Rales. The reduced rate is almost always offered Only on a limited selection of models. Higher rates apply to the Mote popular models. If the Model you be decided on is not available at the Low rate you May end up with a car you really Don t want in order to get the reduced financing. You have less negotiating Power on the Price of the car if you Are using dealer financing. Even if your dream car is available for the Low apr financing the Price you pay for the car will probably be higher and you la get less for your Trade in than if you arranged for Independent financing. This is especially True if the dealer is paying a subsidy on the autos financed at the Low rate. You la most Likely pay the sticker Price rather than the lower Price offered to Cash buyers. The Low financing May have been made available through what s known As a buy Down in which the dealer arranges with a Lender to give you a Low rate loan. To persuade the Lender to make such a loan the dealer gives the Lender a Lump sum payment in Cash. In this situation the dealer recovers his payment to the Lender by raising the Price of the Auto or the Price of the car s options. Frequently the Money you can save by negotiating a lower Price on the car will More than offset the difference in the in Terest rates an example of this is shown later you May be forced to come up with a larger Down payment to get the Low rate. In some cases dealers ask for a 331/ per cent Down payment compared to a 10 or 20 percent Down payment at a credit Union. There May be a Shorter term required with the Low rate. You May have to pay it off in 12 or 24 months while credit unions extend the repayment term to 48 or 60 months. Consumers who itemize their tax re turns will have less to write off in finance charges with the lower apr financing. You May also pay More sales tax due to the inflated Price of the Auto purchased through Low rate financing. You May forfeit other benefits such As a Cash discount or a free scheduled maintenance program when you use the Low Rale dealer financing. Some dealers offer a Choice Between a ,000 or More discount on the Price of the vehicle and the reduced rate financing others offer the financing or a two year free scheduled maintenance program for the car. You May do better taking the discount or maintenance offer and arranging Tor your own financing. Watch out for Early pay off penalties with dealer financing. In some cases you will pay a substantial penalty for Early repayment of your loan. This is an important consideration if you Don t plan to keep the car the full term of the loan or if you accelerate the amount of your pay ments. The credit Union does not charge a penalty for Early loan repayment. If you want credit life insurance to pay off your loan in the event of your death it will Cost you extra with dealer financing. Pentagon Federal credit Union provides borrowers with credit life insurance to is 0,000 at no direct Cost dealers May also charge loan application fees and fees for credit checks. The credit Union does not impose such fees to borrowers. So Why Haven t other lenders followed suit and reduced Auto financing rates Simi Lar to dealer financing because we can t afford to and the Auto dealers really can t either. Be realistic. You know that car Deal ers and makers arc still making a profit what they lose on financing they make up somewhere else. For instance the 1986 american cars arrived with Price increases ranging from three to nine percent despite the fact that the manufacturers labor and material costs have declined three percent from last year and inflation has been running at less than 4 percent according to the Wall Street journal newspaper. In order to sell these new cars Auto makers will probably have to continue of Fering Low Rale financing. Although the 7.7 percent financing expired in Early october some dealers now offer 8.8 percent apr financing on selected models. To compare the costs of various financing let s look at some examples using dealer and Pentagon Federal credit Union financing. Well assume the car costs $12.000, and the buyer will make a $2,400 Down payment with dealer financing there is an option of Low rate financing or a s1,000 discount on the Price of the car. Taur Al Nancino pfc Al Nancino 77ha.p.r. I.1%�.p.r. 12.0%a.p,r. Car Pulca ii2.000 112.000 s12.000 Down payment i 2,400 s 2,400 i 2,400 Cah discount 0 01 t.000 loan amount 1 ?.0 � Cimfl i 1,400  pm 41 month 4 month 41 month monthly pay rent i 232.97 1 231.93 s 22440 total amount a Law 511,112.23 11,410.50 10.u4i7 in these examples financing through the dealer would Cost More than using the 12 percent apr Pentagon Federal credit Union loan. Not Only is their  payment smaller with the credit Union loan but you d save More than s5so Overall with the pfc loan As compared to the 8.8 percent financing. Compared to the 7.7 percent financing the pfc loan saves you Over $300. No doubt you can think of some Good uses for an extra $300 or $550 furthermore repayment is easier with a credit Union car loan using direct Deposit net pay or an allotment. It s convenient painless and easy and you won t have to write a Check every month. To make sure you re getting the Best possible Deal when you buy a new car always visit two or More dealers. Ask each for the Best Cash Price on the car you be selected and ask to see the dealer s in voice. Then borrow from the Lender who offers you the Best terms. If you re overseas you can buy a new american car through the army and air Force Exchange service. There Are several advantages when you do your car shop Ping this Way. Perhaps most importantly getting a Good Price docs not require you to possess Good negotiating skills. Car prices Are limited to nine percent above the Factor wholesale Price. In addition you Don t have to endure aggressive sales pressure. The sales agents although employees of car manufacturers must adhere to cafes regulations. All customers Are to be treated fairly without High pressure sales tactics. When you buy a car through cafes you must arrange your own financing. In Many locations there is a credit Union nearby to provide Low Cost Auto Loans. The cafes vehicle buying service pro Vides a Welcome convenience to car shop pers overseas. You can buy an in Stock car or a special order one through cafes overseas. It can be delivered overseas or to a us. Address if you have orders to re turn to the Continental United states. Just remember be a careful consumer consider from All angles any Purchase or financial commitment especially one that seems too Good to be True. It May be just that. Martha e. Hill manager. Public affairs. American express military Bank ing facilities also replies we can t argue the 7.7 percent annual percentage rate apr offered by Ameri. Can automobile manufacturers is without a doubt a More favourable rate for Auto Mobile Loans than you will find in Europe or for that matter Al most financial institutions in the states. This temporary interest rate used at an alternative to rebates was introduced by the Auto manufacturers specifically to generate car sales on certain models in a depressed Markel and in no Way represents whal actual . Interest Rales Are at the present time. The following information concerning average loan rates is extracted from in aug. 15, 1985. Federal Reserve statistical release new car Loans Al Auto finance companies Are listed at an average of 12.06 percent while at commercial Banks a 48-month new car loan is 13.6 percent. We realize that with the Ever escalating prices on today s cars every percentage Point counts when you Are considering the Purchase of a new car. The Community Bank Al present can offer Only signature Loans to help provide financing for automobile purchases. Currently our signature loan rates Are 1,25 percent per month on the unpaid balance of a loan or 15 percent apr. The introduction of new Auto Loans is under consideration and we Hope to introduce them u another Community Bank service in the near future. The percentage rate for our signature loan was established and is re evaluated annually by the department of defense in consultation with its banking contractors. All fees and interest charged by the Community Bank is designed to help offset the Cost of operating the worldwide banking program. Without this Revenue the Cost of operating the program May be considered to be prohibitive. We very much regret that Al this time we Are unable to offer a rate competitive with the special apr which was offered by american automobile manufacturers. In Ciurlik housing situation persistent source of complaints Over the last several years in Ciurlik tur key has become an increasingly nicer place to live. However one persistent source of complaints Here has been the housing Situa Tion. Enlisted members Are not permitted to live on base unless they Are Al least an e-4 with two years of service. I understand that chapter 3 of afr 90 i states enlisted personnel in pay grades e i e-2, e-3, Ana e-4 with less than two years service Are ineligible for family hous ing unless there is excess family housing or there is a hardship. What i do not under stand is Why civilian non key or essential employees Are being provided base housing when a is through e-4s arc being forced to live downtown. Paragraph 14-1 of afr 90-1 lists the circumstances in which base housing is to be provided to eligible civilian employees. The first situation is when the housing is necessary for key or essential employees or required As a condition of employment. We currently have teachers army corps of Engineer civilians and Naf employees and a court reporter living on base that i am aware of. They Are not considered key or essential and i seriously doubt base hous ing was a condition of employment. The second possibility is when appropriate and adequate housing does not exist in the local area. This is simply not the Case Here. Lastly. When housing is excess to the needs of All military personnel assigned attached to the installation or in the  this last possibility is what is trouble some. The regulation clearly requires that All military personnel be provided base housing before civilians Are eligible. That u not happening Here at in Ciurlik. Our younger airmen Are entitled to better treatment.  withheld in Ciurlik a Turkey editor s note col. Thomas n. Coode director. Housing ind Community services he Safe replies a recent Clung in air Force directives has entitled members in the Grade of e-4 to assignment to military family housing regardless of length of service. Enlisted members in the Grade of  through e-3 Are Illel not entitled to assignment of Mili tary family housing by Dod directive. The new housing recently constructed on in Ciurlik was programmed and constructed based upon the requirements of ii married members civilian and military regardless of Gride. Authorization of this construction was based upon the Inadequacy of local Bous ing for any family whether civilian or military. This was particularly True re Garding Utility systems which frequently failed and often led to contamination of Ibe Witer apply other health a safety hazards. We share the writer s concern for Bous Fough e-3 enlisted members tin Ciurlik. In 1982, Safe forwarded a request to be air staff o Eure a Bous ing entitlement for this category of Mem Ber. Thai request wms denied primarily because the housing construction in incur Lik had not been completed. Now that he construction has been complied we intend to once Iliin Pell lion the air stiff to permit he assign ment of All members to military family housing on in equal basis. We ire confident that i e will be successful his Lime re think to " her for reminding us of this important bit of unfinished Busi Ness. Pen pals i would like la put my name in your pen Mph a. My i luvs Are horseback old lip swimming motor code Riding in the country Wilt and Snow i Klong hiking Tel the Woodi and itar Wal Chang. 1 am 30 years old. Sol. Ronald Cook hhs8 ur8