References

[Anonymous]

I was wondering if lenders always ask for references when you get approved for an auto loan? I applied for financing through the carmax website and I got a called that i was approved through american credit acceptance apr is 15.9% which high but not as high as i though it could be. I believe my credit score is now around 550. Anything the only documentation they are asking for is 4 references with different addresses. I know that does not seem like a big deal but the four people i would like to use for references are my mother, father and my two sisters. The problem is that my parents live together and my oldest sister moved back in with them and my other sister is staying with me so they don't have four different addresses  and I really don't want to ask anyone else about being a reference for me that why I was wondering if all lenders might ask for a reference if the approve me because my credit score is so low. The car  I got approved for is a 2013 nissan sentra with 22000 miles, the price is 16599 and  i was approved with a down payment of 7500.  I went a head and applied to my credit union later this afternoon after i had talked with the guy from carmax. i have not heard back from the credit union yet but even if they approve me they might ask for references to. Tonight i actually found a 2013 toyota camry with 15000 miles at a toyota dealership that was priced at $15998 which is cheaper than the sentra and i would prefer to have a camry anyway, i did apply for financing fo rthe toyota yet as i want to wait to hear back from my credit union(Charlotte Metro Credit Union). 

[Anonymous]

My guess is the credit union won't ask for references.  4 seems like a lot from Carmax but the reality is that your in subprime territory so that is why they are asking for the information.  The reality is they won't call nor will they write any of the references so I wouldn't worry about listing friends or other family, legally they cannot even talk about your credit or payments with anyone, all they can do is inquire as to how to contact you if you were to fail to pay on the loan.  If you can get financing from a credit union of course you should, even if the APR is the same because you want to should build a relationship with them.   If you have to settle for higher APR don't give up, build your scores and history and in a few months you can refinance at a lower rate.

[Anonymous]

references are pretty common in auto lending. More so for subprime or deep subprime customers, these are the first people they call when you are late on your payments, they also use this information for repos..

[StartingOver10]

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sonoma05 wrote:

references are pretty common in auto lending. More so for subprime or deep subprime customers, these are the first people they call when you are late on your payments, they also use this information for repos..

One small clarification to the above ^^^ References are only used in subprime loans.  In the 15+ vehicles I have purchased over the years I haven't ever had to provide references - nor been asked for them.  You will never see a prime lender or dealership ask for references. As pointed out, references are used for collection tactics. It is one of the first hints that the financing will be subprime.

Remember, a dealership that only does subprime type financing (like Drive Time or one of those) will put you on sub-prime financing regardless of your credit profile. That is why it is so important you research first - so you know if you can get prime financing and can skip over those dealers.

[CreditCuriosity]

References are used in prime loans as well.. Just recently leased a Lexus 711 TU 04 score..  Tier 1...  Granted I think I filled out the references (two of them) prior to them even running my credit.  This was lexus btw, I think it is just standard protocol with at least Lexus credit application.  I probably could of left them blank?  Only ran through Toyota/Lexus finanance as it was a lease as well.. So a broad statement of sub-prime is not true.  I have perfect auto payment history w/7 cars+ under my credit

I have also bought other vehicles in the past that don't ask for references, so maybe it is the dealership or car company or whether it is a lease or a purchase, etc...

To add to this even though it was a lease after doing money factor x 2400, I was financed at essentially a 3% apr...  That isn't sub-prime....

[StartingOver10]

Maybe it is the dealership. I know I have never had to provide them and I have purchased 15+ vehicles in 40 years.  I don't know why - there isn't even a space on the application from what I have seen and I have used CU's, banks and dealership financing.

Edit:  Maybe the difference is leasing??? I have never leased a vehicle. I always buy them.