I'm not looking to buy in the near future but I'd still like some advice/questions answered about the car buying/financing process. I have purchased a car before but I purchased it outright (not sure if I'll ever be able to do that again but it was a wonderful experience while it lasted). I'm looking at my next vehicle to be a certified pre-owned BMW around $37K-$40K with a trade in KBB value of around $25K for my current vehicle due to me owning it outright.
What kind of deals would I be eligible for in terms of financing? Would you advise using a CU or the dealership's financing? I have pretty good credit for a 23 year old (scores in mid-700s, excellent credit history, no baddies, etc.), although it has dropped a bit recently due to buying a home and beginning to use CCs again post-closing to buy some things (i.e. furniture) for my new home. I'd just like to hear what you guys have to say. Thanks in advance for the advice.
Starting Score: 760Also, even though I've never financed a car before, would I have an auto enhanced FICO score?
@JM-AM wrote:
@frogfan12 wrote:I'm not looking to buy in the near future but I'd still like some advice/questions answered about the car buying/financing process. I have purchased a car before but I purchased it outright (not sure if I'll ever be able to do that again but it was a wonderful experience while it lasted). I'm looking at my next vehicle to be a certified pre-owned BMW around $37K-$40K with a trade in KBB value of around $25K for my current vehicle due to me owning it outright.
What kind of deals would I be eligible for in terms of financing? Would you advise using a CU or the dealership's financing? I have pretty good credit for a 23 year old (scores in mid-700s, excellent credit history, no baddies, etc.), although it has dropped a bit recently due to buying a home and beginning to use CCs again post-closing to buy some things (i.e. furniture) for my new home. I'd just like to hear what you guys have to say. Thanks in advance for the advice.
No one can pre determine if and what type of deal you may be eligle for financing. If you were purchasing now and others have recently purchased the same type of vehicle it may be possible to give you opinions on their experiences.
When you are ready to purchase you can look up any dealer financing option specials such as 0% financing. With CU it is usually best to apply when you are given high rates at dealerships..
With no auto financed you will not have an auto enhanced score. With your present credit scores it souldn't be an issue for any type of approval. Only thing that may be factored in is your employment (work for someone, or self employed) and gross income. Depending on your DTI and how long employed or self employed may play a big part of the decision process.
OP should still have an auto-enhanced, right? I was under the impression that the auto-enhanced FICO was based on your regular FICO but with an additional "overlay" that weighted auto loan history more heavily.
I purchased my first car last year and prior to that I had never had any type of auto loan. The only accounts showing were revolving credit cards, and a student loan that was still in deferment. The car dealership gave me a credit score disclosure document showing they had pulled scores of 782 and 744 for EX and TU, with the score range being from 250-900. While I won't know what my EX FICO was at the time, I do know that my TU FICO was a 741 just a few days prior to me going to the dealership, which is pretty close to the dealer-pulled 744.
So I would venture to say that lack of payment history on a prior auto-loan should not hurt OP's chances that much, if at all. I would just recommend that before you have the dealer pull credit, make sure your reports are in pristine condition - have as few accounts reporting a balance as possible, paydown balances so that <10% util reports, etc. (I'm pretty sure the reason my EX auto-enhanced FICO was so much higher than my TU auto-enchanced was because my EX report had fewer accounts reporting a balance. I had not planned ahead as well as I could have and I guess TU needed a few more days to pickup the updated balances.)