Countdown to purchase -- 6 months .. advice please!

[Anonymous]

Here's a bit of oddity. I have not gotten pre-approved for a loan because I just assumed (like what was discussed here) that an approval would expire in a month or two's time.

Well, I made a big step and stopped by the Subaru dealership. They said I would need to get approved for the loan before I could place an order for the car (which remember, won't be here until November). They said when the loan is approved, and I put down a $500 refundable deposit they will place the order for the car. Then when the car arrives, they will call up the loan company and "re-approve" the loan.

Well, my concern is the hard inquiry now, and again in November. This will be considered 2 seperate hits, because they aren't within a close period. Not only that, but I feel like there is a chance my score may go up from where it is right now.

Finally, I wanted to stop by my credit union to get approved before walking into the dealership so that I could avoid the (up-to) 2% hidden markup of whatever loan I am approved for. I feel like I am putting myself at a huge disadvantage because when the car is delivered they will have me over the coals.

How should I proceed?

[FrugalRican]

Is this a car that is going to be in that high of a demand that you couldn't wait until November and then go to a CU followed by the dealer?

[HoldingOntoHope]

Crashprime - I can fully understand the dealer wanting to make sure you can be approved for credit within their network before placing a special order for the car. And also a lot can change between now and November in your credit world so it is impossible for them to say that the approval is guaranteed until then.

That being said, it does not mean that you have to accept the dealer financing when the car is delivered. They should be able to give you at least a couple weeks notice before the special order arrives and you could secure your own financing at that time through whichever lender you choose. As to the inquiry, yes you will have one now and at least one then. But that is the small price you will have to pay for a special order versus buying what's on the lot. Good luck in your purchase.

[Anonymous]

I know nobody can really predict the future with 100% accuracy, but what kind of credit score penalty will 1 auto loan hard inquiry typically have on an overall score, and how long does it take to gain those points back?

TU ~720

only ~4-years reporting on file

3-years of ontimes from an auto loan

only derogatory mark is a 30day late on a store card 1yr5mo ago.

[HoldingOntoHope]

The hard inquiry is typically only a few points and depending on how many are already on that bureau may not be any points at all. General consensus seems to be that a first inquiry with none in the last 12 months is 3-5 points. A second has no effect. Third may be a few additional and really none beyond that. The points lost are typically recovered in 4-6 months. The biggest factor is what else is going on in your credit between those months. New accounts or increased utilization or especially the appearance of a negative item or late pay would be the main concerns.