Help! Went for to get my first car and they ran my credit 6 times??!!

[iNathanDrake]

I recently got my pre approval for 22,000 to finance a car. I went to my local nissan dealership and got a car. I ALREADY HAD MY LOAN from Capital one. This was yesterday. Today I go onto creditkarma and i see that I have 6 new hard inquires with Chase, TD Auto, and a few other places. I don't understand, why is this? If I already had my load with capital one, WHY THE HELL are you checking if chase will give me a loan? Or TD BANK?!?! Can they do that? What can I do this is ridiculous this is going to impact my score horribly. 

[pipeguy]

Very common occurance - dealers tend to "shotgun" your credit seeing where they can get your paper bought. Good news is if they are coded correctly it'll only count as a single inquiry. Live and learn that if you have your loan in hand you can insist that they do NOT run your credit, even thought you'll hear BS like its required by the patriot act (it isn't they just have to ID you).

You can freeze your reports before you go to a dealer and you can try to insist that they remove the inquries due to no permissable purpose since you informed them that you already had a loan (you did didnt you?).  You can even take it a step further with a BBB & CFPB complaint, but don't expect it'll work since its your word against theirs that you didn't "allow" them to try to beat your rate. 

I purchased a new car in Feb of his year, told them I had my own financing (1.99% through DCU) and stated up front do NOT run my credit - the Finance manager offered me .99% for 72 months, I said no thanks and they did not run my credit.

Don't know if you purchased GAP insurance through the dealer but if you did CANCEL IT and buy it through your insurance company - not only will it be cheaper, but you'll cut their profit margin on your sale - bit of payback. 

[iNathanDrake]

I absolutely told them I already had my loan. I didn't think they would go and run my credit knowing that I already had my own loan. It was my firsty time buying a used car, or any car for that matter. I'm going to go in today after work cause I'm supposed to sign for the car today and finalize everything. However they presented me a paper with the cost of the vehicles after fees and plates and everything, and what it would cost aftr the loan period. That's all I signed was agreeing to that price. Dealing with that dealership has been a nightmare and I really wish I could go back in time and just not go there.. 

[StartingOver10]

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@iNathanDrake wrote:

I absolutely told them I already had my loan. I didn't think they would go and run my credit knowing that I already had my own loan. It was my firsty time buying a used car, or any car for that matter. I'm going to go in today after work cause I'm supposed to sign for the car today and finalize everything. However they presented me a paper with the cost of the vehicles after fees and plates and everything, and what it would cost aftr the loan period. That's all I signed was agreeing to that price. Dealing with that dealership has been a nightmare and I really wish I could go back in time and just not go there.. 

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^^^Be extremely careful here.  The dealership is trying to put you on another loan. They use two different contracts - one when you are financing through them and another when you are buying cash. When you come in with outside financing it is a cash deal to the dealership.  There is no way they should be showing you the cost of the vehicle after the loan period (APR info) unless you are financing through them. Did you sign a contract with them....sounds like you did.  Call Capital One and have them explain their process to you so you know for sure that is what you are getting.  I see red flags here....

[Anonymous]

Using a Capital One prequal at a dealer does indeed generate a RIC (Retail Installment Contract) from the dealer, with APR and total finance amounts, etc. on it.  More often than not, it is a very long sheet of paper, and usually the yellow copy is the one they will ultimately give the buyer.

A Capital One prequal is not a loan - it is a promise to give you a loan.  To finish the transaction, the selling dealer must run your credit and pick up the Capital One deal, then use that one to fill in your contract.  Capital One has already decided to finance you, but they won't let the final paperwork be done without doing a hard pull.  Dealers routinely also pull other lenders at the same time, to see if they can beat your rate.  They did this with me in March - I told them they could try and beat my Capital One prequal if they wanted to, and I got a total of 23 inquiries on my reports on that day.  Almost all have since fallen off, and only 9 remain - but they are all coded as "auto lending" inquiries, and as a result have had zero effect on my FICO scores.  All three of my scores have actually gone up about 20 points in the April cycle, because I paid down a lot of debt and got a couple of CLIs in there that lowered my utilization way down, so even with the new loan reporting now the net effect is positive, not negative.  No points were lost for the inquiries, just had to deal with a slew of alerts from credit monitoring telling me I had them appearing.  On the up side, my dealer did beat Capital One by almost 2 points.

To the OP - before you go into a fit of fighting to get these removed, I'd say wait one cycle and see what the actual net effect is.  If they are coded correctly, they should not impact your score much, if at all.  Since you did in fact enter a new loan, having one HP (the combined scoring effect of all of the auto lending ones together is 1) is to be expected by anyone reviewing your file.

[Anonymous]

Great explanation hmw_75

[StartingOver10]

hmw_75, that was a very good response.  I have had many credit union loans and they are done the way that I described in my post  (cash contract, not financed through the dealership).  I have never had a Cap One financed purchase so was unaware that the buyer/borrower is put through all of those inq's for other loans at the same time and a financed contract is used through the dealership.  IMO it seems to defeat one of the main purposes of getting outside financing, but that is JMO. 

[TRC_WA]

The inquiries aren't the end of the world... I had the same shotgun crap go on when I bought my  Challenger in Jan 2015...  18 credit pulls split between 2 dealerships spread across the 3 CRA's.

At the time I had a 6 yr old Ch 13 reporting with a 703 auto FICO and was intent on getting my car with $0 down.  The first dealership after pulling my credit said that I had to put $10k down to make a deal....

... I laughed and drove a few towns over and got the same car for $0 down.

Upon getting the denial letters in the mail a few weeks later almost every one said something like "not enough installment experience at this amount" or something to that effect... due to this loan being double what my previous highest auto loan was.

At any rate, after all those inquiries all I lost was 1 EQ point... none on TU or EX.

They fall off in another 7 months... no harm no foul.

[RonM21]

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@StartingOver10 wrote:

hmw_75, that was a very good response.  I have had many credit union loans and they are done the way that I described in my post  (cash contract, not financed through the dealership).  I have never had a Cap One financed purchase so was unaware that the buyer/borrower is put through all of those inq's for other loans at the same time and a financed contract is used through the dealership.  IMO it seems to defeat one of the main purposes of getting outside financing, but that is JMO. 

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Same here. I was unaware of all of this.  I'll be looking for a new vehicle early next year and was nthinking of using one of my CU's. I'll probably stay with that thought after reading this. Sounds like a lot to deal with.

[iNathanDrake]

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@Anonymous wrote:

Using a Capital One prequal at a dealer does indeed generate a RIC (Retail Installment Contract) from the dealer, with APR and total finance amounts, etc. on it.  More often than not, it is a very long sheet of paper, and usually the yellow copy is the one they will ultimately give the buyer.

A Capital One prequal is not a loan - it is a promise to give you a loan.  To finish the transaction, the selling dealer must run your credit and pick up the Capital One deal, then use that one to fill in your contract.  Capital One has already decided to finance you, but they won't let the final paperwork be done without doing a hard pull.  Dealers routinely also pull other lenders at the same time, to see if they can beat your rate.  They did this with me in March - I told them they could try and beat my Capital One prequal if they wanted to, and I got a total of 23 inquiries on my reports on that day.  Almost all have since fallen off, and only 9 remain - but they are all coded as "auto lending" inquiries, and as a result have had zero effect on my FICO scores.  All three of my scores have actually gone up about 20 points in the April cycle, because I paid down a lot of debt and got a couple of CLIs in there that lowered my utilization way down, so even with the new loan reporting now the net effect is positive, not negative.  No points were lost for the inquiries, just had to deal with a slew of alerts from credit monitoring telling me I had them appearing.  On the up side, my dealer did beat Capital One by almost 2 points.

To the OP - before you go into a fit of fighting to get these removed, I'd say wait one cycle and see what the actual net effect is.  If they are coded correctly, they should not impact your score much, if at all.  Since you did in fact enter a new loan, having one HP (the combined scoring effect of all of the auto lending ones together is 1) is to be expected by anyone reviewing your file.

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Thank you very much for your really informative response. Like honestly, reading all of that made me feel alot better. I went to the dealer yesterday without any fits and just asked if everything was ready yet to sign for the car. He said it still wasnt ready and that he would call me (however he told me to come in yesterday so I did and he still wasnt ready). So he told me to have a seat, I already wasted enough time on monday with these guys so after about 5 mins I decided to get up and leave with the car again. I called captial one from the car and explained to them the situation. They apologized for all the pulls and said unfortunately its rather common and that she wishes I woulda called them first as she could have forwarned me. I told her that if there's nothing I can do at this point, all I want is for the car to be signed over to me by the dealership, so that I could just deal directly with capital one. I don't want anything to do with that dealership anymore -.- 

She said that on her records I'm already in an approved loan state, the loan is mine, the dealer just has to send the information over to them and then capital one can confirm the loan and thats done. I don't know whats taking the dealer so long but I'm just going to let it be until he contacts me.

I do have 2 questions however- 

1. I am in possesion of the car, I drove it to work yesterday and today (only had it since monday night). However the car isnt technically mine yet? What harm can come of that? What if they try to charge me for the miles I've put on it? 

2. Is it possible to change the car or cancel it or just flat out say I don't like dealing with you guys, I'm no longer interested in the car?

What do you think is the best thing to do? What would you guys advise? Thanks!