New car purchased, try for better financing?

[Anonymous]

Hello, I'm early in my credit journey after having some old bad stuff and no credit for several years. My scores are hovering around 650 right now and Aaoa is only around 3 months. I bought a car this weekend and financed through CarMax at 8%. When I called to update my insurance, State Farm offered to see if they could do better on the interest rate and couldn't.  I decided to look around and put my info on Lending Tree. I immediately got a call from Autopay offering to try to find better financing. I know they have a fee of just under $500 but if they can save me more than that it seems like I should go ahead. I'm wondering if anyone has any advice on them or other options. I'm also open to hearing opinions on the interest rate I got given my score and thin file. 

Thank you. 

[Anonymous]

I've got two words for you, just two words - Credit Union

Your best bet to get better financing would be to check with a credit union.  Your options include checking with a local one you like and/or have a relationship with, or you could go with a national one.  My recommendations in the latter category would be:

Navy Federal

PenFed

DCU

Good luck, and don't worry too much about qualifying for any of those - we have ways to get you in

[Anonymous]

I should add a few things here. I have 2 part time jobs, only one has provable income ($18k). I do have a credit union that I use for my checking and saving account but they just approved me for a $2800 credit card, my first real card with a (sort of) decent limit so I am a little afraid to poke that bear and risk them taking it or lowering the limit. I believe they approved it on a SP based on a preapproval, I haven't seen a HP hit any of my reports from them yet. 

[Anonymous]

Under no circumstances should you pay a fee to refinance a car.  Lending tree isn't a great idea because they have become the source of these semi-scams.  I agree with the poster above that a credit union is the way to go.  DCU, Penfed and NFCU are the favorites here, I have car loans with NFCU and Penfed, both do approvals very quickly and easily.  There is no real downside to refinancing to lower the rate, my guess is you can cut that interest by about 50%.  Your only downside is your AAOA which might hold you back a little but don't let that discourage you from trying.  The upside of the effort can save you thousands over the life of the loan.

[Anonymous]

I should add that if you cannot refinance now then keep your credit clean and utlization low and try again in 6-12 months and you will likely be successful.

[Anonymous]

Thank you. I think I will go ahead nd try, all the hits should consolidate, right? If they say no, I'll try again in 6 months or a year when my accounts age and hopefully my provable income will increase. Anyone know if the recommended credit unions above will ask me to provide proof of income? 

[Anonymous]

DCU just approved me for 5.24%

i didn't expect an instant approval like that. Thank you all so much. I'm off to see if I can do any better. 

[Anonymous]

That's great.  Your doing great.  

[Anonymous]

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@Anonymous wrote:

DCU just approved me for 5.24%

i didn't expect an instant approval like that. Thank you all so much. I'm off to see if I can do any better. 

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If it's not already too late, I recommend stopping right there - DCU is fantastic to work with, and you can get that rate 0.5% lower if you setup checking with them and auto-pay the loan from that account.  While scoring is SUPPOSED to combine all auto finance pulls when you do them close together, in practice it doesn't always work that way - quit while you're ahead

[Anonymous]

Just came back to say I got nervous about exactly that. I opened a savings and checking account with DCU, I will change my DD at work to allow for auto pay.  I figured I may as well see what they say about a CC while I'm at it. They approved me for $4200. My biggest card yet, nice insulation for my util. Thank you so much.