10-04-2010 04:11 PM - edited 10-05-2010 12:48 PM
Hello all you experts out there...I have a question for you. I put in an application at Carmax today for a 2006 Hummer H3. The cost of the car is $18,800. I am putting $2000 down.
They came back with an offer of 13 - 14% interest depending on the term of the loan. My credit score is 670. I had another dealer ran my SS# and he thought I should be able to get around 6% with that score. Of course, he didn't do the full application.
I've owned my own home for about 1.5 years and have been at the same job for 14 years. My annual income last year was 79K. Can anyone tell me why my interest rate would still be that high?
Here's another thing I thought of today. I asked Carmax to run the loan to not include my trade-in. I owe about $4900 on that loan and don't think I'll get that much for the trade in (2003 Dodge Durango). They tend to rip you off when you trade in so I thought I'd try to sell it outright). Could that be the reason for the higher interest rate? Two car loans?
10-04-2010 04:41 PM
try an alternate lender?
honestly though I think the problem is the vehicle.
1-Since Hummers are discontinued they have lost resale value, therefore they may not be the best choice of a collateralised loan and therefore you may be paying a penalty rate.
2-A cars mileage or age does influnce the interest rate given and wether or not the vehicle will get financed.
Either way I think a 6% on a used car that old is somewhat wishing
10-04-2010 05:34 PM
I'll shop around. I really didn't expect the 6%, more like 8...definitely not 14%. The discontinued car I can kind of understand but not really. My debt ratio is 38%. I know that's not optimal, but it seems to be within the guidelines.
What are the good online lenders?
10-04-2010 05:56 PM
Shop around. That is way to high. I bought 2 cars about 6 months ago with a 681 for the first and got 8 and next car was a toyota and got that 0 promo. I think the dealers trying to make some extra money.
10-05-2010 12:50 AM
Whoa 14% is extremely high. My vehicle is currently at 5.99% and I think is pretty high already. Shop wisely, with your score probably you'll get somewhere between 6-10%.
10-05-2010 04:02 AM
Yes definitely shop around. I just bought a 2008 Lexus Is350 about a month ago with an interest rate of 7.25% with a credit score of 677. 7.25% was still high for me, but I can't complain with a sub-par credit score. This car loan will help build my credit into the 700 range, something I haven't seen in almost 7 years.
10-05-2010 07:13 AM
I would recommend to try your local CU.
10-05-2010 03:34 PM
yes along with the other poster that mentioned it, Hummer does not hold value at all at that price sounds awful. My friend bought an 06 Hummer Loaded 2 years ago for 18k... How are they considering this car still worth 18 in 2010.
and for a loan, I would check with your local bank, if you can walk into a dealership with a check in hand they might work harder to beat the rate.
10-05-2010 06:22 PM
I got the approved at 8 percent with a prior loan owing 8k on it and I kept that loan so it was my second loan. I actually thought I would have to trade that car in and told the finance guy but he ran it and it came back approved with the existing loan. So I would try another bank or a CU. It does seem high.
Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.