Auto Loans

[hussain99]

I'm getting a car on finance.

Here's how my profile look like:

Income $85,000

FICO EQ: 640

Inquiries: 6

Length of credit history: 10 months

Just a few days ago my FICO was 694 but I got short of cash somehow and left a balance of $900 on one of the cards. As a result of that, my score just dropped to 640 today.

Now when the dealer would run my credit today, I won't be able to get a good interest rate. However, if I could somehow get a month, I can clear all my balances & bring my score up again to high 600's. I'm not sure if the dealer would be able to hold the car for so long since its a special pricing going on these days on this car.

What do people normally do in these situations?

[blackie1]

Well, usually they wait, which is what you are going to have to do!!

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hussain99 wrote:

I'm getting a car on finance.

Here's how my profile look like:

Income $85,000

FICO EQ: 640

Inquiries: 6

Length of credit history: 10 months

Just a few days ago my FICO was 694 but I got short of cash somehow and left a balance of $900 on one of the cards. As a result of that, my score just dropped to 640 today.

Now when the dealer would run my credit today, I won't be able to get a good interest rate. However, if I could somehow get a month, I can clear all my balances & bring my score up again to high 600's. I'm not sure if the dealer would be able to hold the car for so long since its a special pricing going on these days on this car.

What do people normally do in these situations?

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[tooleman694]

Buy the car, then refi in a couple months.

[maiden_girl]

I'd wait. There will be others. With your short credit history...your FICO wouldn't matter anyway to the lender. Your Apr will still be high.

[Jutz]

Some card companies might be able to report your balances mid cycle based on an escalation request.  Might want to look into that.  There will always be incentives for auto sales, but not waiting at most 30 days for possibly savings hundreds a year seems kind of crazy.

[Revelate]

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Jutz wrote:

Some card companies might be able to report your balances mid cycle based on an escalation request.  Might want to look into that.  There will always be incentives for auto sales, but not waiting at most 30 days for possibly savings hundreds a year seems kind of crazy.

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Depends on the dealer I think; buying in December in "last year's" model is often a non-trivial savings right off the top, I don't know if those deals are still there mid-January in all cases... though in general I would agree with you if you can afford to wait for a month, do so.

Also it very much depends on the borrower's profile, 640 Auto Enhanced from several well known lenders is nowhere close to 20%; 640 Classic first time buyer, maybe as an example... but lenders are really favorable right now, and that includes the big dealer lenders too.  If it were me and I was buying from a brand-name dealership, and I was planning on dealer financing anyway, I'd at least consider buying in December regardless of the 50 point swing... which theoretically won't be 50 points (probably smaller) difference on Auto Enhanced anyway given the relative weights.

[hussain99]

Ended up financing the car on 14% APR

I told their CSR its very high but he said I'm financing for the first time so I'll be getting a high APR almost everywhere. He also suggested me to refinance after sometime.

Is refinancing easy? What should be my best strategy? Should I get it from the Bank I mostly deal with, CUs?

[maiden_girl]

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hussain99 wrote:
Ended up financing the car on 14% APR

I told their CSR its very high but he said I'm financing for the first time so I'll be getting a high APR almost everywhere. He also suggested me to refinance after sometime.

Is refinancing easy? What should be my best strategy? Should I get it from the Bank I mostly deal with, CUs?

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The dealer could have done better. I financed for the first time like a week ago and my rate was no where near that high. You need to definitely refinance that in maybe a few months.

[Revelate]

Your scores are substantially higher maiden_girl; that's a non-trivial difference in rate which can be obtained from anywhere.

Hussain: yes refinancing is very easy, and I do recommend CU's for it.  

[maiden_girl]

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Revelate wrote:

Your scores are substantially higher maiden_girl; that's a non-trivial difference in rate which can be obtained from anywhere.

Hussain: yes refinancing is very easy, and I do recommend CU's for it.  

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Alot of dealers have first time buyer programs, college graduate, and military discounts. I assumed the OP would qualify for at least one of the discounts. The dealers can always do better. They actually can call the bank up and negotiate with them on rate and payment. I always feel like the dealer could do more if they truly want to earn your business.