Self-Employed Auto Loan Advice? Who to Choose?

[Anonymous]

Hi there,

   I'm planning to purchase a car in the 20-26k range soon, and will have a trade-in worth $6000, and could throw in a 2-3k deposit on top of that.  (so I guess the actual loan would be closer to 17-20k)

I currently have no HP's on my credit, and am trying to minimilize how many could be added as a result of a car loan.  I also plan to get a new credit card soon (looking at Amex).

My scores are currently the 720-730 range, but should be closer to 740 by the end of this month or so.  No baddies, excellent payment history - but short AAoA because of old accounts falling off.  (2-3 yr average) 

Question 1:  I am a freelance contractor, and am trying to figure out who I should use for financing.  I am pre-qualified with Capital One, but I'm worried that they'll give me three HP's across all bureaus and I'm not sure what they'd require as POI.  (I could provide 1099s, bank statements and a letter from the company I am contracted through.)  Are there any financers that aren't very strict with POI?

Question 2:  Should I apply for the Amex before applying for a car loan, or vice versa?  I'd like to use the Amex for holiday purchases.

Question 3:  Another alternative is to wait a few more months since my scores might be closer to 790+ (quickly paying down debt!), but there might be less car incentives if I wait until after the new year.  Would 50 points make much of a difference?

Thanks so much! 

[Sandman771]

With those scores many banks won't ask for POI goign through a dealer, especially with the amount of equity you are bringing to the table. Of course the dealer will try to make some money on the financing. If you have a local credit union that you are a memeber of then I'd go to them and see about getting a pre-approval through them and go pick your car fax the buyers order to them and they'll deposit the check in your account and you can just write the dealer a check for the whoel amount to be financed. Just an option. 

I say this knowing that with those scores I'd get you financed without POI. lol

[Anonymous]

I'm considering local credit unions, or maybe Penfed.  I'm just being really greedy with my HPs.    

I'm wary of going through a dealership since I know they love to pull willy-nilly, and that they might try to plunk down an additional 1-2% on the finance rate.  

Or maybe that's my best option if I'm self-employed?

[fltireguy]

CapOne will probably only do 1 HP. Auto loans are different from CCs as far as the triple pulls... They shouldn’t ask for POI.

Looking for a good lender that’s pretty generous? I’d say PenFed. I sincerely doubt you’ll need POI. Might as well grab a CC with your auto loan as well, since the HP will be good for at least 30 Days - with your scores you should be good for a nice fat SL.

And the dealer... sure. If you want HP’s blasted out like birdshot...LOL

[Appleman]

If you are trying to control HPs, I believe PenFed is the answer. We know that they have recently gone to FICO 09 for the score they utilize and I believe they are still utilizing one HP on Equifax for Membership, a Credit Card, a PLOC and an Auto Loan. They will likely require POI but I believe people have been able to provide Tax returns to support income.

Honestly, I would call them up and ask them about what they require, I have had good luck talking with the CSRs.

[Anonymous]

I’m self-employed and got my first car loan last month. At 18 with just 6 months credit history, Capital One’s pre-qual wouldn’t work for me but my dad recently got a fantastic loan + rate through them.

I went through the dealer and Chrysler Capital ended up approving me last month for $26k finances. I put down $5k cash, so the car was worth $31k total. First and only FICO score, from Discover, was 706 for me.

I doubt you’ll have any problems

[Anonymous]

Hmm...  maybe I will try for Penfed.  The main reason I wanted to try for Amex is because they're finally showing pre-quals for me, and I wouldn't mind the 6% cashback.  Maybe I'll try for both Penfed and Amex since I don't really need Cap1 any more, and BoA has never given me a CLI.    

I did try a pre-approval with Cap1 - I'm approved for up to 40k, at about 3.24% apr...  but that could be 0% apr at the dealership.  (60 month financing promo.)

I wonder if they could pull my credit through their own agency for just the one HP instead of shopping it out to other lenders if I went through the dealership?  

fltireguy - your comment about the birdshot made me laugh.  No kidding!  

[Anonymous]

Whoa, nice job, tothephonebooth!!  I don't think I even knew what a credit card was when I was 18...  many, many years ago.  

I was self-employed at 18 too.