topic Got denied for auto loan in Auto Loans

Got denied for auto loan

Jattmoney — Wed, 24 Oct 2012 20:19:55 GMT

Hi, I am trying to get an auto loan for $14,700 + TTL, but was denied for my limited credit history. I told the sales person I am willing to put down $2,000 in order to get approved, but he said that will not help. I spoke with my older brother who does sell cars for a living, and told him all the information regarding my credit score -- my lowest is 630~ and my highest is 690~. I am willing to put down more money towards the loan (upto $3000) but the sales person said it wouldn't affect anything. My brother on the other hand said I should be easily be able to get a loan because he got someone fianced for a $25K within the same credit score and no credit history at 8% interest. I have the money to buy the car, but I want to build credit history. My other choice is going to a local credit union and applying there. However, I don't want too many hard hits on my credit history either.

My income is $3500, and my only expense is my credit card which has a limit of $2500. I rent, but my siblings pay for the rent while I save. I've been working at this current job for six months, and my previous job was for 10 months, and before that I was going to school full time. Would I be able to get a loan? I need a car for work because I drive a lot, and without a car I can't increase my income. Would I be more likely to get approved by my local bank and local credit union?

Re: Got denied for auto loan

Jattmoney — Wed, 24 Oct 2012 20:50:31 GMT

I also owe $1000 on my credit card. And the loan that was denied was by VW financial.

Re: Got denied for auto loan

davefromca — Wed, 24 Oct 2012 21:14:19 GMT

Start making calls to banks and credit unions, tell them your situation. Give them an idea of your fico score and what you can put down. That way that can at least be sure you can be approved before they run your credit.

Re: Got denied for auto loan

Jattmoney — Wed, 24 Oct 2012 22:44:23 GMT

Well I applied at a local credit union, and made an appointment to speak with a banker at my local bank. The credit union used my highest FICO score of 692, and I told them I would only finance $14K. They said the value of the car is $14.9K is the KBB value of the car. I told them that I can put more down, but she said I'll have to talk with the loan officer. So it is a waiting game now.

Re: Got denied for auto loan

Jattmoney — Thu, 25 Oct 2012 03:13:44 GMT

My application wasn't finished when I called before they closed, so I will have to wait till tomorrow for a reply from my credit union. Also going to apply at Wells Fargo because they said I was pre-approved for an auto loan a few weeks back. And I also spoke with the sales person that he should try another lender if possible, and he said he will try Capital One and Bank of America. Also, how do I become a member of PenFed? Will my chances of getting approved be good, or it just depends as well?

Re: Got denied for auto loan

FrugalRican — Thu, 25 Oct 2012 10:58:20 GMT

Have you tried looking for a car slightly less expensive than 14.9?

Your brother gave you all of those variables, but that person's financial situation might not be the same as yours. Every situation is "YMMV".

It seems that you either have no or very little income coming in so you're buying a bit "high" as of right now, which is why that dealer probably doesn't want to finance you.

Also, why are you worried about "hits" on your credit? Do you plan on buying a house anytime soon? If not, it's car shopping, you're going to get hit by Inq's regardless. Pile them all up now while you do your car shopping smartly.

Re: Got denied for auto loan

Jattmoney — Thu, 25 Oct 2012 18:18:12 GMT

$3500 per month is low income? I have no expenses beside my credit card.

Re: Got denied for auto loan

Jattmoney — Thu, 25 Oct 2012 19:45:07 GMT

This sucks. BOA, Chase, Capital One, BECU, and PenFed denied me. :smileyindifferent:

Re: Got denied for auto loan

laz98 — Thu, 25 Oct 2012 20:21:32 GMT

Jattmoney wrote:
$3500 per month is low income? I have no expenses beside my credit card.

I agree with you......that doesn't sound like low income, especially if you have almost no expenses! I think we make less than you do, together! I guess it depends where you live, though. Cost of living here is super low.

Re: Got denied for auto loan

FrugalRican — Thu, 25 Oct 2012 20:24:06 GMT

I skipped over the part where he had $3,500 income per month.

I just read the part where he said he needed a car to make more.

But how much of the $3,500 is left over after monthly expenses?

Because it sounds like if you waited a month, you could sway them a little more with extra downpayment. I'm sure if you presented more than 20%, they would be singing a different tune.

Re: Got denied for auto loan

Jattmoney — Thu, 25 Oct 2012 21:54:43 GMT

What I have left over from my income is $2500 because I usually spend $1000, but lately my expenses have been nothing. So I've saved enough to purchase the car, but I rather finance because I need credit history.

Re: Got denied for auto loan

blackie1 — Thu, 25 Oct 2012 22:28:17 GMT

With an income of 42000 dollars, 12 times 3500, a fico credit score of 692, it is incomprehensible to me why youcannot get an auto loan, It seems to me if you are upright and breathing Capital one would finance you.

Re: Got denied for auto loan

Jattmoney — Thu, 25 Oct 2012 22:59:38 GMT

That is what I assumed. My sales man said they denied me. So either he is lying (which I am thinking) because he isn't making anything for himself, or that I'm missing something.

Would I be able to call them and see if a loan was pulled for me?

Re: Got denied for auto loan

Jattmoney — Thu, 25 Oct 2012 23:45:22 GMT

Good news, got approved by Chase. They just want my pay checks, and proof of residence. However the rate is 14.24%! My brothers gf works for Chase, so he said she can try and get a lower rate. But at least I can get the car!

Re: Got denied for auto loan

blackie1 — Fri, 26 Oct 2012 00:40:37 GMT

I think if you will now take that already approved loan status into a reputable dealer, not the same one you went to previously they will now get you a better APR. With a 692 fico and very little DTI you should easily get into the 6-7 % range. Good Luck!

Re: Got denied for auto loan

Jattmoney — Fri, 26 Oct 2012 00:55:11 GMT

No, that pre-approval is from the dealer via Chase. They need some more info though, so not 100% in the clear.

Re: Got denied for auto loan

StartingOver10 — Fri, 26 Oct 2012 10:52:12 GMT

Jattmoney wrote:
Good news, got approved by Chase. They just want my pay checks, and proof of residence. However the rate is 14.24%! My brothers gf works for Chase, so he said she can try and get a lower rate. But at least I can get the car!

You have to negotiate with the finance guy - he thinks he's got you over a barrel. They all do that - start high and act like that's the best they can do. They did the same to me started off at some rate north of the one you were just quoted and I ended up with a rate of 7.14% (due to a BK in 2008).

However, based on your entire post, I would find another dealership to purchase from because this particular finance guy sounds like he is uncooperative (more than usual).

Re: Got denied for auto loan

Shogun — Fri, 26 Oct 2012 11:57:51 GMT

+1 Or tell him you think you could do better and you're going to go elsewhere. See if that lights a fire.

Re: Got denied for auto loan

Twizzle — Fri, 26 Oct 2012 13:47:59 GMT

Jattmoney wrote:
What I have left over from my income is $2500 because I usually spend $1000, but lately my expenses have been nothing. So I've saved enough to purchase the car, but I rather finance because I need credit history.

Not at that interest rate you don't.

Patience, grasshopper.

You have the $. Pay for the car with the cash, but I'd also use part of my savings and pay down your credit to less than 10% utility. Keep it there.

Meanwhile, let time work on your credit score. Add a secured personal installment loan w your CU. Add a new line of credit, perhaps a credit card w the same CU. Always let all cards report as 0, except 1. Let that report at less than 10% util. Drive the paid for car into the ground. By then you'll have perfect adequate credit and work history.

And let me add, my husband usually gets a small auto loan before the previous falls off at the 10 yr mark. This time around we didn't get one in time. There was no issue getting a good interest loan by following the above, and that was w a BK on his report. Don't let credit score fear cause you to overpay on something.

Re: Got denied for auto loan

madmann26 — Fri, 26 Oct 2012 13:50:42 GMT

Go to Chase directly? See what they say and bring that back to the finance guy and let him squirm.