Toyota Approval at Dealership ... Concerns

[Eddie24CO]

Hello Everyone.. 

I want to run something but you all. My credit is not bad, in fact it has improved a lot since 2008. My current credit score is 659 pulled from TU and 634 on EX. 

I wanted to buy a new Toyota.. so I went into a dealership and got a great deal.

5 yr 10.5% interest rate, no money down and my trade which they gave me $6,000 for and $5500 rolling over from my previous auto loan. 

Now my previous auto loan was 24.9% APR through Drive time, so before you all say 10.5% APR is horrible, for me, its wonderful.

Payments are affordable ... etc.

Anyway come to find out they didn't approve me yet, I have to wait until Friday "until the guy who has major pull with TFS is back"

The manager of the delaership stated to me in an email "If I cannot get the deal approved, I will not charge you $50.00 per day or .50 cents per mile.  I will also wave the $499 restocking fee.  The hold up with the loan is the head buyer for TFS is gone until Thursday or Friday.  I need his approval to get the advance we need.  I am very sorry for the delay and the inconvenience this is causing you"

What is the likelikehood of getting this loan actually approved?

3 finance managers have said that they are confident in it, and my response was is that I am confident that i may win the poweball but its not certain until it's a done deal.. 

Thoughts? 

AM i really worrying for nothing? I have heard horror stories of people being financed like this and then having to bring the car back and it just creates a whole different headache.

[Eddie24CO]

I forgot to mention that I currently have the NEW car with me right now

It's a 2012 Prius C

MSRP $22,600 with GAP insurance and extended warranty for a loan of $24,000 that includes the $5550 negative equity roll over from the previous loan.

No Co-Signer, No $ down.

[Anonymous]

I'm no expert mind you, but I recall this being a classic (and shady) technique used by dealerships... The idea being that you've already showed the car off to all of your friends, and when you come back, they say, "Well, turns out your APR is going to have to be X, or the loan amount will have to be X..." etc. You don't want to risk embarasment, so you say, "yes."

Again, I could absolutely be wrong, but when you go back in, be prepared for some bad news (but probably not a flat, "We can't do this.")

[Watchmann]

3 finance managers have told you 'no problem' yet none of these guys can get the loan approved?  Sounds fishy, dealerships don't go for days without a manager being able to get things done.  You are stuck now, but don't be surprised if they come back to you saying the only way they can approve you is with an interest rate higher than the one they quoted you.  Unfortunately you fell for the standard sales technique today, you are buying a car based on monthly payments and not the total bottom line price, including interest which is why you had such a negative equity on your trade in.  Anyway, hope for the best.

[Eddie24CO]

The only reason why I had such negative equity on my trade in is because when I bought my previous car I had no choice and I had a crappy credit score. My other car was totaled due to a hail storm and I had to purchase a car.. not much of a choice when you have to do what you have to do to get back and forth to work.

The only reason that they state is that the Purchaser is not in the office until tomorrow... and he is the one that secures the funds or whatever.

I am like 75% sure it will be approved, considering Capital One the day before Approved me for $30K loan but still just leary

[Scuba]

What dealership / what state?

[Anonymous]

I think you have every reason to worry.  As mentioned, this is a tactic that dealers will sometimes use.  You may get approved for A loan...just not THE loan that was being discussed.  When you go back to the dealership, expect different terms than what you were originally offered and prepare to be disappointed.   Hopefully, though, you can come back to this thread and tell me how wrong I was 

[Anonymous]

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@Eddie24CO wrote:

The only reason why I had such negative equity on my trade in is because when I bought my previous car I had no choice and I had a crappy credit score. My other car was totaled due to a hail storm and I had to purchase a car.. not much of a choice when you have to do what you have to do to get back and forth to work.

The only reason that they state is that the Purchaser is not in the office until tomorrow... and he is the one that secures the funds or whatever.

I am like 75% sure it will be approved, considering Capital One the day before Approved me for $30K loan but still just leary

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You will probably be approved, but there is a good chance they will say that the rate they promised couldn't happen and come back with a higher rate.  It happens a lot sadly.  It happened to me once.  I told them to go pound sand and take back the car I had driven around all weekend.  Most people aren't willing to do that and just suck it up and pay the higher rate because they have already become attached with the car.

One thing I would say is that you do have a choice.  Why did you also buy GAP insurance and an extended warranty?  Adding those kinds of things plus rolling over an old loan are ways to build huge negative equity on a loan, especially combined with no down payment.  You will be upside down on this car for years now.  These are things to avoid in the future.  Always put a down payment, don't buy extras that just drive the loan amount up.  GAP insurance and warranties can always be purchased way cheaper not through the dealership.

On a side note, I'm really curious so I had to ask.  How did a hail storm total your old car?  My car has been through a couple hail storms before and just had some small dents/scratches to show for it.  Did it get wrecked while driving in the hail storm or just hit by some huge pieces of hail that totaled it?  Pretty crazy.

[Eddie24CO]

Thanks Jimbo831, and that is kinda what I figured is probally going to happen. 

My previous car that was totalled in a hail storm was due to large hail falling for 20 minutes straight. I was in Phoenix, AZ at the time and almost everyone's cars were damaged as well as their roofs on homes. It was enough damage to the roof of the car and to the sides of the car for them to claim it a total lost.

[Anonymous]

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@Eddie24CO wrote:

Thanks Jimbo831, and that is kinda what I figured is probally going to happen. 

My previous car that was totalled in a hail storm was due to large hail falling for 20 minutes straight. I was in Phoenix, AZ at the time and almost everyone's cars were damaged as well as their roofs on homes. It was enough damage to the roof of the car and to the sides of the car for them to claim it a total lost.

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Wow, that is just crazy.  Rotten luck, sorry to hear about that.