Long time lurker here and love browsing the forums for tips on rebuilding my credit!
I am looking to purchase or lease a new car in the next month or so and curious on my approval odds for the special 0% financing deals. I have never financed a car on my own before as I am still driving the car my dad cosigned for me from 12-13 years ago. That loan is still showing up on my CR as paid in full with no late payments.
That said, my credit took a huge dump about 8 years ago when I was laid off and unemployed for about a year. I ended up with a judgement, a couple of COs, and tons of CAs reporting on my CR. Long story short, I paid off the judgement and patiently waited for all the baddies to fall off of all 3 CRs. In the last year or so, my scores have been steadidly climbing and finally broke 700! As of last month, I am happy to report that the last baddie had fallen off of EX.
Here's what I'm working with:
myFICO scores: EQ-740, TU-726, EX-744
Auto FICO 8 scores: EQ-737, TU-710, EX-724
Total CL: $38,550, UTIL: 9%
Total debt: $10,547 (credit card-$3,306; loan: $7,241)
I am working on paying down my credit card debt before I actually go in to apply for any type of auto financing. Based on my credit profile, what are my odds of being approved for Tier 1 or 2 financing with a dealer? I plan on putting down about $3,000 and I don't want to finance more than $27,000 on a new car. Also, would I be better off trying to get a loan through a CU instead of financing with a dealer? Appreciate any suggestions or comments! Thanks in advance
Given the info you provided, you'll qualify for a good rate, probably the 0% offers, but keep in mind that you usually give up a cash rebate for the 0% so it's wise to consider a lender like DCU that'll offer a 1.99% loan and you get to keep the rebate - just check the back and forth figures. A lot of times the deakers will hold out for higher over all prices and offer the 00% as a benefit, just remember that the cost of the car is different than the financing or trade in, Dealers are great at working all three to extract maximum $$$.
Good suggestion on considering rebate over 0% financing!
I also forgot to mention that my AAoA is only 3 years and change since I was rebuilding. Would I still be a good candidate for a low APR through a CU or dealer?
You'll have no problem at a CU or bank, be very VERY careful using a dealer for anything other than direct promotional financing, they tend to"shotgun" your credit report (you'll get 6-8-12 inquiries). If I were you, I'd go to DCU and get approved, you don't have to accept the final financing - you get 30-45 to make a deal. That way you have finacing in hand, pre-approved, so when the dealer says "your credit report doesn't qualify for the 00%, but we have another bank that'll go 3.99% you can say, no thanks, I'll take the rebate ...
The salesman and finance manager are NOT your friend and their job is to maximize their profit by selling you entended warranties, GAP Insurance, Undercoating, fabric protection and all kinds of over priced worthless add ons.
You might also look at TrueCar, it's a free online service and you'll know the discounted price up front. If in fact you get the 00% financing and a good price and wisely forego all the add ons (you can buy GAP from your auto insurance company or from the lender an 75% to 90% less than the dealer). You can also use the Truecar price and ask any dealer to match it (for a like vehicle) most will since there is some profit for the dealer in the deal.