Auto Loans

[Becki67]

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? 

[usmc58555]

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

[Becki67]

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? 

[mross1080]

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.

[TheCreditKid]

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%.

[JShidell]

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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.

Good luck!

JShidell

[Becki67]

What on-line lenders do you guys recommend?

[MyFicoAddict]

I would recommend to try your local CU.

[Creditaddict]

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.

[mross1080]

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.