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Auto loans Credit Tiers?

Frequent Contributor

Auto loans Credit Tiers?

How many credit Tiers are there pertaining to auto loans also what are the differences between them bottom line how and what effects do they have on consumers when applying for credit. Thanks in advance
7 REPLIES
Frequent Contributor

Re: Auto loans Credit Tiers?

I think the number of tiers depends on the finance company. Additionally, there are websites that publish the tiers. I swear I've seen the Toyota tiers posted here in the forums.
 
ETA: Here's the thread. It's MV's post that has an example of the tiers.


Message Edited by islandchild82 on 06-20-2008 10:08 AM
New Contributor

Re: Auto loans Credit Tiers?

These are the ones that were printed in a book I have on financial planning. (Haha, I should have read the book when it was first given to me... sigh) They are the same ones that are in the Suze Orman book I bought.

720-850
690-719
660-689
620-659
590-619
500-589

As for what rates to expect, it really depends on whether you will be financing through a bank, credit union, or the dealer, or etc. The dealers can usually beat anyone's rate on new car purchases because they have often have promo rates, but don't expect to qualify for the promo unless you are in the top tier. On used cars, you should definitely shop around for rates. I'm pulling this from my Suze Orman thingie, but it seems pretty accurate, based on the rates I was offered recently.

720-850 : 6.0%-6.5%
690-719 : 7.25% - 7.75%
660-689 : 8.75%- 9.5%
620-659 : 10.75% - 11.5%
590-619 : 14.25% - 15.5%
500-589 : 15.0% - 16.0%

These look close to the kind of rates you could expect to get from a bank or other lender. The dealer may be able to get you better financing. It also seems like you can get a better rate if you put more money down up front. I think they like 20% down or more.

Message Edited by catzcradle on 06-21-2008 03:01 PM
- Catz
12/01/09 TU 759 EQ 756

10/01/08 TU 697 EQ 659
07/05/08 TU 693 EQ 663 EX 711
06/01/08 TU 657 EQ 610 EX 670
Valued Contributor

Re: Auto loans Credit Tiers?

You can get better rates then what was posted....of the highest credit tier 5.99% for 72 months is possible and the rate gets lower for shorter loan terms....
Mortgage Lenders Mid-Score 778 I AM A HOMEOWNER!!!!! 30 Year 5% Fixed Rate, closed on 3/18/09
Established Member

Re: Auto loans Credit Tiers?

I am currently trying to lease a truck from Volvo.  I think they are using Chase financial for their lease financing.  I was told tier 1 is 730 and above.  They wouldn't tell me my credit score but I was listed as tier 2.  Last time I check my credit score it was 723.  The dealer, however, got Chase to bump me up to tier 1 financing.
Valued Contributor

Re: Auto loans Credit Tiers?

Sounds to me like him telling you that you qualified for Tier 2, but he got you up to 1 is just a way to make it sound like he is doing you a favor.

I could understand if he said Tier 1 was 760........but most every dealer uses 720 and above as the top tier.
Mortgage Lenders Mid-Score 778 I AM A HOMEOWNER!!!!! 30 Year 5% Fixed Rate, closed on 3/18/09
Frequent Contributor

Re: Auto loans Credit Tiers?

Good morning guys thanks for your replies finally I have a better perspective about the different credit Tier"s associated with auto loans. As always thanks so much have a great day everyone.
New Contributor

Re: Auto loans Credit Tiers?



1111mel wrote:
You can get better rates then what was posted....of the highest credit tier 5.99% for 72 months is possible and the rate gets lower for shorter loan terms....




Well, those are the approximate rates for 60 month lease in my zip code anyway. I'd say it depends a bit on where you live too. The map on Bankrate.com shows my state as having some of the higher interest rates. Smiley Sad
- Catz
12/01/09 TU 759 EQ 756

10/01/08 TU 697 EQ 659
07/05/08 TU 693 EQ 663 EX 711
06/01/08 TU 657 EQ 610 EX 670