Car Loan Info anyone??

I don't know about any of these, but if you belong to a credit union I recommend you talk to them. If you have copies of your reports they may talk to you without pulling one. Often credit unions will let you explain your situation and they may be more willing to work with you.

 

You are not going to get a decent interest rate from anyone with those scores. I know, because I had scores around mid 600's in 2001 and I applied through an online lender (I think it may have been household or peoplefirst). They approved me, but at 19% or something rediculous.

I agree that a credit union would be your best bet, but other than that you might need some luck to find a dealership or other lending source that will get you a rate anywhere close to decent.

If you need the car right away, you may have to eat the interest costs until your credit is good enough to refinance or get another loan at a better rate. I'm doing that next month.

 

We have low-mid 600's. Went truck shopping a couple weeks ago and the best anyone could do was 10% down and 14-18% interest. Ended up going w/ USAA for 0 down and 6.5% interest. I know that you WILL be able to find financing, but, as everyone else has said, it will be for a higher rate.

Trust me, most of us here have had high interest loans because of our scores. At 550 fico, Americredit approved me for 23% interest. Re-fi'ing it saved us 150 per month. So, worst come to worst, if you NEED a car and cant get credit union approval, you may need to pay the higher rate and refi in a year or two. We did ours 8 months after initial purchase.

 

Having sold cars for a year, I thought I would offer some input. Most dealers get a break with local banks and CU's because they send so much business. Normally, they get a .25 -.5 rate reduction. They make their money in kicking up the rate (normally 1-2 points). Keep this in mind when speaking with the finance person at the dealership (he/she makes a ton of money on kicking the rate up). Go in armed with your FICO. If you are 700+, then you will almost always qualify for those 0% mfr interest rates or the best posted rates. 620-700 means that you are prime+2-5 points, depending on the amount, down payment and your particular income. Finally, if you are below 620, you should be looking at dealing with a CU directly or one of the online operations. Remember: a finance person will always try to lower your expectations of the rate unless you are stellar (waste of time for them, they don't get paid much/have a set comission on the manufacturer special rates). Always threaten to take your business elsewhere or tell them that you "will think about it." They don't make money unless you BUY the car. I hope this helps.

 

I agree with the last poster...they make no money (extra, that is) unless you finance through them. We brought our own finanincing with us...got approval through our bank. They made nothing off of this loan...hee hee

 

Peoplefirst may be a good option to shop online, your scores are inline for the subprime side & may be low to mid teens. Keep in mind most dealers may see a different score than you. Most are setup to pull a auto-enhanced score based on ability to repay auto credit. your scores are also ok for some of the domestic captive lenders such as fmcc & Chrysler credit. If you purchase a new vehicle with a large rebate & put cash or trade equity down you can possibly qualify for special rates such as 4.9%. Just some suggestions

 

Peoplefirst may be a good option to shop online, your scores are inline for the subprime side & may be low to mid teens. Keep in mind most dealers may see a different score than you. Most are setup to pull a auto-enhanced score based on ability to repay auto credit. your scores are also ok for some of the domestic captive lenders such as fmcc & Chrysler credit. If you purchase a new vehicle with a large rebate & put cash or trade equity down you can possibly qualify for special rates such as 4.9%. Just some suggestions

 

Buying a car from a dealer can turn out to be a nightmarish experience if you don't fit their profile, & don't have good credit. The dealers ideal customer profile is a white male under 35, with a 700 + FICO score.
It is not a good idea to buy a car if your FICO score is lower than 680. First, you will not qualify for anything close to a single digit rate, let alone 0% financing. If your FICO score is below 625, you may not be able to buy a new car, & used cars will be very limited on what can be financed to you.
Forget about paying cash for a used or new vehical. Dealers hate cash paying customers, & will charge the highest price possible (Kelley Blue book + 10 - 15%), or you will pay full MSRP + options on an average new vehicle, or full MSRP + a 15% ADM (additional dealer markup) on an SUV or a popular new model. All discounts including rebates, factory to dealer, customer incentives suddenly disappear when the dealer learns that you are a 'cash paying customer'
One should concentrate on raising their FICO to over 680 so they don't get completely screwed when buying a car.

 

Who in their right mind would pay 18% , 23% or anything over 9% on a car!!!???. Don't forget you will need to pay for insurance, as well as extended warranties and other 'extras' that the F&I dept. will fight tooth & nail sell to you, packaged all in 'one convienient monthly payment'

If one so desperately needs a car, but has bad (under 650 FICO) credit, these are really your realistic options.

1) Buy from a third party, and have a mechanic do a full inspection.

2) Wait, take public transportation, keep driving what you have until your FICO qualifies you for a decent rate.

3) Get a co-signer who have the necessary fico. Note, many times you won't be able to get financing at any rate without a cosigner if your FICO is below 630.

Credit Union?? Puleeze, no credit union will approve anyone whose score isn't 650 or higher. Enough with nonsensical advice.

 

Please, next time before you try to knock someone else's advice- take your time and do your research.

If you had, you would have noticed that 2 weeks ago I posted about purchasing my new (used) car through my credit union. To clarify, I purchased a 2001 Dodge Intrepid and financed it at 9.9% for 5 years.

My scores are posted below, as you can see they fall far below what you would say is "doable".

Everyone with a low score has different factors leading to that. Fortunately, many of us with low scores also have POSITIVE auto tradelines which bear quite a bit of weight when looking to get another loan.

My low scores are due to the fact of a Chapter 7 BK from 1996, a few collection accounts from 1998-2000 and 1 unpaid chargeoff.

The remainder of my problem is student loans. They are being reported as chargeoffs, collection accounts, 120+ days past due etc etc. All it took was showing my CU my current statements from the lenders reflecting my minimum payment and the fact that satisfactory payment arrangements had been met.

The negatives will be deleted off of my report once I finish my rehab program.

So, unless you are the person that makes all the loan decisions for all the credit unions in the world (which you're not- as you would have denied me)- please refrain from accusing others of giving false information.

We can speculate as to what each lender's requirements are but none of us can truly predict whether or not someone would be approved or denied.

 

I live in NYC, Age 28 single, make close to 50K, and have one chargeoff from 2000 which is now settled in full. No other derogatory credit,

My FICO is 625. Despite the fact that I paid off my last car loan 2 years EARLY, never late, I can't get a car loan from anyone, not online, not thru a bank with 30% down, unless I am willing to finance thru the dealer at 15% for a used Honda Civic.

I have inquired at many so called credit unions. No one will consider an auto loan with a sub 680 FICO, unless I can provide a co signer with a 720 or greater FICO.

The smartest thing to do under these circumstances is wait, you know that dirty little word in todays complete credit, no cash down economy.
Anyone with any brain in their head would know that paying a double digit rate on a car makes no sense.

 

Re: Re: Car Loan Info anyone??

You paid a auto lender on time every month & paid them off early? That lender would would be begging for your business back. Your in the state of NY in a very competetive car market. If you spoke to a F&I manager who could not get you done 1 of 2 things is wrong
1. your debt ratio's are way over
or
2. your dealing with one of the weakest f&i guys ever

in either case your posts are way overboard.

 

Re: Re: Car Loan Info anyone??

Nick,

You sound pissed. I hear your frustration and just want to tell you- what you're saying isn't all nonsense.

Yes, it doesn't make good financial sense to finance cars with double digit interest rates if you can wait. Some people, sadly enough, do not have this option. They live in areas where there is no public transportation, need to get to their place of employment, have no one they can ride with and no family or friends to help them.

They can come up with around $300 towards a car as that's what's left each month after paying their bills but you and I both know a $300 car is just asking for trouble.

I am normally very anti-subprime when it comes to installment loans. Especially for those people who are in subprime for a reason and haven't changed any of their habits or behaviors that caused them to be in that situation in the first place.

I am 27 years old, female, married, live in the suburban Chicago area, make about $50,000 a year and managed to get a decent loan. Not outstanding by any means, but certainly fair.

Nick, this is going to take a bit more work on your part. Print up your reports and go talk in person to the F&I mgr at the dealers. They are giving 4.9% to people in the 500's (it has been documented here at Cnet). Make it clear that you are not subprime and will not settle for it.

Who was that other auto loan through, BTW?

Show them what an educated consumer you are. Ask them what they can do based upon the information you provide them.

It's pretty hard to get a decent rate (or an approval for that matter) at any of the online outfits. I have heard of it happening but more often not.

If you want to wait, go right ahead. Couldn't hurt. But, I think a more aggresive approach might provide your solution.

 

Re: Re: Car Loan Info anyone??

four20nik.
Was your USAA program (6.5% zero down) one of their pre-approved programs? Sounds like it, have used their program many times.
I have previously let the dealer try to match, and they can't get close.
Too catch everyone else up, USAA Banking occasionally provides pre-approved auto/RV financing to it's members, a great company to do business with.

 

Re: Re: Car Loan Info anyone??

What I have said is true, and many can relate. Attacking me, & treating car dealers like god who are out to get you the best possible rate is ridiculous.

Like I said, unless your FICO is above 650 or so, it is a very bad idea to deal with a car dealer for a new or used car.

Unless you have a co-signer, or have a very high income, you will pay double digit rates in the high teens for a used car. Usually you wouldn't even qualify at all to buy anything new even with 50% down.

And no, NYC & NY state to a lesser extent is competitive on who gets scamed the most when making a purchase. You have an army of immigrants and other recent arrivals who absolutely 'need a car'. Dealers love these types of people because many don't speak full english, are naive about the whole process, and willing to do what ever it takes to get into a car. Usually they end up with a high interest loan (due to lack of credit), that they are well upside down on for the next 5-7 years.

 

Re: Re: Re: Car Loan Info anyone??

You know what? Everything you have said here is exactly OPPOSITE of what I was told when I applied for a new truck a couple of months ago. As A matter of fact my score was 700, nothing derogatory and decent income. I was turned down, you know why? Each and every bank they shopped me through AND FMC told me "No previous auto loan history" As a matter of fact the F&I guy told me that it does not matter HOW good you're credit is, they want to see pevious auto loan history. Same goes for bad credit he told me. He said as long as you have good previous auto loan history, you're in there. He said he has seen 300 scores get in and (as in my case) 700 scores get turned down. So I went to my credit union and was pre-approved on the spot for 100% financing, no questions asked. The paperwork took LITERRALLY 5 mins to do once I bought my truck.

 

Re: Re: Re: Car Loan Info anyone??

tnobles, this brings up a problem in my case as well. DH and I have not financed a car since 1987!! We will be in the market within the next 6-12 months. Due to circumstances in my favor, i guess, my mom gave us a 2 year old car when she bought a new one, and my next door neighbor had a 1 year old for sale, and I just paid him every month. I do have a copy of an old CR with my auto loan on it, is it possible that will help at all? Just curious.

 

Re: Re: Re: Car Loan Info anyone??

{{{Same goes for bad credit he told me. He said as long as you have good previous auto loan history, you're in there. He said he has seen 300 scores get in and (as in my case) 700 scores get turned down. So I went to my credit union and was pre-approved on the spot for 100% financing, no questions asked. The paperwork took LITERRALLY 5 mins to do once I bought my truck.}}}}


Stop spewing the credit union mantra. Usually you have to meet strict entry requirements and have a FICO of 680 + to qualify.

Good previous auto loan history is a requirement for any auto loan. Any repos, multiple late payments are grounds for automatic rejection. Its like requiring that you have a good payment history with a previous landlord before you can rent or purchase another apt.

This doesn't help you, but definitely hurts you if their are any negatives.

I asked about this, since I paid off my last loan with Chrysler Financial two years early & always on time.

The loan is based on your TOTAL Fico score, & what 'tier' you fall in. 620 - 625 is fourth tier, where I have been quoted rates on a used car anywhere from 14% - 17% with at least 20% down in the NYC area.

I am sure that if I didn't have a perfect payment history on my last auto loan, I would be quoted rates of 18% + .

 

Re: Re: Re: Re: Car Loan Info anyone??

One of the banks did ask me if I had any previous auto loans that I could prove. So I guess in essence they were just asking if I could produce something showing I had at some point in time paid on a car.