Auto Loan

[srivera21589]

I was trying to get a Ford focus. I never told the sales person how much I was going to put down bc I was told not to, everyone was telling me see what you can get approved for without a downpayment, although I intended on putting a downpayment of 2000/2500. Sales person calls me and tells me "You're going to need a cosigner and a 2000 dollar downpayment." So, I was a little confused being that I do have some credit. My credit score being a 607. I then found out that they were trying to only get me approved for a Ford finance auto loan, which clearly I wasn't going to get approved for on my own. So, I started speaking to another Sales rep at a Subaru and Dodge dealership, and he's been extremely helpful, doing everything he can to get me approved for the right car. He did tell me if I didn't want to put a downpayment I would need a cosigner but if I was going to do it all on my own I would need a downpyament of $2000 (which is completely understandable) for either a Subaru Impreza or a Dodge Dart (leaning more toward the Dart) He told me I have a decent credit score but the reason they want a down payment is bc I don't have a very long credit history and I do have one hiccup on my credit report . The only reason I had a hiccup was bc I was out of work and could no longer make payments on my credit card, but once I got another job I paid it all off. But since that one hiccup I have been doing extremely well with all of my payments. I still wanted to give the sales rep at Ford a chance since I had a little more knowledge bc of the sales rep at Dodge/Subaru. I go in and speak to the sales rep in person, he then tells me "Why don't you just go with a Ford Fiesta?" A car I never even mentioned I wanted. I told him absolutely not, if I'm going to get a car with Ford it is going to be a Focus. Then I told him well, how about I put a downpayment of $2000 and go with the Focus, he then proceeds to tell me well, I don't think you'll get approved to get a Focus even with a downpayment of $2000. I was getting upset and told him, "Look, I think it's absurd that I can't get the car that I want with a decent down payment. I know people with no credit, worse credit, and who have bankruptcies that have put down a downpayment of $2000 and got the car they wanted! They were not being pressured into buying a car they had no interest in buying. If I am putting money down, I should be able to get the Focus without any issues. I can go to Dodge right now and get the car I REALLY want with a $2000 dollar downpayment and not be forced into buying the car I do not want." He didn't know what to say. I feel like the people at Ford were really trying to take advantage of me bc they didn't think I was very knowledgeable. I also found out they have been forcing a lot of their customers into getting the Ford Fiesta. So, I will never step foot into another Ford dealership again bc of this. 

So, I guess my question is. If I go with the Dodge Dart, with taxes and all my loan amount should be about 20,000. Would a $2000/$2500 downpayment be a decent amount being that my credit score is a 607? 

[StartingOver10]

Do you know why your score is 607? Have you pulled your consumer reports to see what is holding it down? Do you only have one cc? It might not take all that much to increase your score to the mid-600's or so. Then you can get a CU auto loan and buy whatever you are approved for - it puts you in a more powerful position.

[srivera21589]

The only thing that is holding down my credit score is that one old College credit card I had. Where I could no longer make payments bc I was out of work but I eventually paid it all off. Is there anyway I can dispute this?? I just recently got approved for a credit card with Capital One. I mean I thought a 607 was an OK credit score to get approved for a car loan with a downpayment. The only reason Ford was being very difficult is because they didn't think I was going to put anything down, but when I told them I was they kept making excuses about me having to go with a cheaper car which is ridiculous. 

[StartingOver10]

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@srivera21589 wrote:

The only thing that is holding down my credit score is that one old College credit card I had. Where I could no longer make payments bc I was out of work but I eventually paid it all off. Is there anyway I can dispute this?? I just recently got approved for a credit card with Capital One. I mean I thought a 607 was an OK credit score to get approved for a car loan with a downpayment. The only reason Ford was being very difficult is because they didn't think I was going to put anything down, but when I told them I was they kept making excuses about me having to go with a cheaper car which is ridiculous. 

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Will this be your only cc besides the one you defaulted on and subsequently paid off?

If so, then you should see a pretty good score increase. Remember, the scoring formula rely's heavily on revolving credit (cc's) utilization. If you have no open lines but have balances showing then your utilization is over 100%.  If you have 2 to 3 credit cards and all are zero balance except one card showing less than 9% utilization, than that is the 'sweet spot' for optimizing your score quickly.

Yes, a down payment is critical when you are in recovery mode.

It is especially helpful when you haven't had a car loan before or not had one recently. That's why I said to go to a CU if possible because that puts you in a position of power when negotiating your deal. The F&I guy will try to beat your CU deal and if he can't you have the approval (which is the same as cash) in your hand. That's powerful.

Also remember the auto dealer makes more money on the financing than they do on the sale of the vehicle itself.  Don't rely on the car salesman to give you accurate info. Some know what they are doing, but many don't especially when it comes to financing. I'm a Realtor and the worst credit reports I've ever seen belong to (in general) car salesmen and auto F&I people, so don't let them intimidate you. Naturally this doesn't mean all car salesman or F&I people, but you would be surprised at how many have awful credit.  

Let your new credit line report. Then check your score. I bet your score improves substantially if you keep the utilization low.

[srivera21589]

He was making me think I wouldn't be able to get any car I want with a $2000 downpayment. When a $2000 downpayment should be a nice amount down on a $20,000 loan. I am definitely going to go into my Credit Union and negotiate with them. Definitely going to put a minimum of $2000 down, so that should definitely help. I am also going to wait til the end of the month to do so, so I can let my credit card payments process and show up on my report.

Thank you so much! You've definitely been helpful and have given me hope