Cap One Pre/Approvals-How does it really work?

Anonymous · ‎11-30-2017

Cap one pre-approved me at 35K; I uploaded my POI and they told me I am good to go. Went to purchase at dealer last night and told me I needed huge dp and it really is not an approval only a pre. Total financed OTD with negative was 20,800; mSRP was 20,480 on the car. Called cap one myself and they told me LTV on car works espite neg equity, dealer just needs to pull credit(which they did)and submit deal to them(which they didnt do) and I am done. Confused, how does Cap One really work. Also, dealer was not listed on auto navigator but Cap one told me they are listed in their network. Got frustrated and tired so I left.

tnvols · ‎11-30-2017

Car dealers are always going to try to squeeze you for more down payment and will shotgun your app to 10 different banks. Last year I walked in already approved by my credit union and had to fight the F&I guy on 3 different attempts to "get me a better deal" from one of his lenders. We actually got it done with just a single HP from my CU. I understand that several inquiries for the same shopping trip doesn't affect you much, it's just the principle of doing what I ask them to do and them not trying to convince me to do a bunch of crap that isn't necessary. Most car dealers have forgotten the first rule of sales, when the customer says yes then it's time to shut up and do the paperwork.

Oct 2017 Scores MyFICO FICO 8

Equifax 633
TU 582 (Suck it TU)
Experian 615

July 2018 Scores MYFICO 8
Equifax 700
TU 674
Experian 689

November 2019 Scores(24 mos post CH13 discharge) MYFICO 8
Equifax 783
TU 799
Experian 794

Anonymous · ‎11-30-2017

Sounds like something isn't right here.
When you were on the Cap-One Auto Navigator website, did you plug in the information of the vehicle you were intending on purchasing as well as the correct sales figures?

If you had just gotten a pre-approval on no specific vehicle, Cap-One will simply give you vague terms of a pre-approval. In order to find out the real terms from Capital One it depends on the book value of the vehicle, the mileage, year, sales price, down-payment, negative equity, etc.

So a pre-approval on no specific vehicle/sales structure can be VERY different than what the actual terms are.

Capital One has an internal scoring system and it is VERY LTV/down payment concious when determing interest rates.

$1,000 dollars down could net an interest rate of 9.87% while a $2,000 down payment could net an interest rate of 6.78% through Cap One.

With good credit, a car dealership shouldn't really care what kind of down payment you are providing as it doesn't make them any less or any more money typically. Now if there is a ton of inequity, or poor credit, then a down payment could affect the dealer's profit dramatically.

Anonymous · ‎11-30-2017

Sorry for the double post but forgot to answer your question regarding how the Cap-One auto Navigator program works.

Customer get's pre-approved through Cap One, and Cap One provides a list of dealers in network that are close to you, you pick out a vehicle from their inventory that you want and put in the sales price, down payment, etc etc.

You goto the dealer and the dealer will typically pull your credit after you tell them of your pre-approval. The Dealer submits the deal to Cap-One which is where Cap-One performs their hard pull. (1 hard pull from dealer, 1 hard pull from Cap-One).

Dealer recieves an approval with the interest rate determined based on the sales price, LTV ratio, miles, down payment, etc. Dealer is not allowed to "mark-up" the rate, and only recieve a dealer incentive flat based on the amount financed which has no impact on the customer.

It is a simple process, the reason why dealers will often ask you to allow them to submit to other lender's is for multiple reasons. The main reason's being they want to use a different bank that allows them to "mark-up" the rate to make more profit, or secondly, they genuinely believe they can beat Capital One's interest rate.

Anonymous · ‎11-30-2017

@Anonymous wrote:
Sounds like something isn't right here.
When you were on the Cap-One Auto Navigator website, did you plug in the information of the vehicle you were intending on purchasing as well as the correct sales figures?

If you had just gotten a pre-approval on no specific vehicle, Cap-One will simply give you vague terms of a pre-approval. In order to find out the real terms from Capital One it depends on the book value of the vehicle, the mileage, year, sales price, down-payment, negative equity, etc.

So a pre-approval on no specific vehicle/sales structure can be VERY different than what the actual terms are.

Capital One has an internal scoring system and it is VERY LTV/down payment concious when determing interest rates.
$1,000 dollars down could net an interest rate of 9.87% while a $2,000 down payment could net an interest rate of 6.78% through Cap One.
With good credit, a car dealership shouldn't really care what kind of down payment you are providing as it doesn't make them any less or any more money typically. Now if there is a ton of inequity, or poor credit, then a down payment could affect the dealer's profit dramatically.

Car is new. My poor credit, neg equity, low DP even though cap one will do it dealer probably feels not enough profit in it for them. Makes sense. Probably try a large national dealer(Autonation)one last time that may have better resources for disposing of 10 year car with 113K on it.