Want to buy a car and need financing advice

[Aprile421]

Hello there,

My car is turning 12 years old this year. I bought it used but in the same model year it was made 2005. The car is completely paid off and only has 63,000 miles on it. When I bought it it had 18,000 miles.  I live very close to things so my errand trips are usually less than 5 miles a trip unless I go to the doctor which is around 30 miles each way. The car runs great but it is showing it's age. The interior is starting to show it's age, I have had to have the AC compressor replaced and minor things like that. I think I am ready to start looking around for a newer car.

I am thinking I would like to get the same kind of deal I got when I bought my last car, used but same model year or no more than 2 years old.

I am trying to get my financing ducks in a row before I go and look.  I am interested in a Ford Fusion or some type of smaller Buick sedan.  It has been so long since I bought my last car and to be honest back then I was much younger and not as interested in getting the best financing deal with the least amount of impact to my credit. I would just bop into the dealership pick the car I liked. If they worked a payment I could afford I drove off with the car. Think about down payment? Interest Rate? Impact on my credit or the number of inquires I was going to occur? Never even crossed my mind lol. I wanted less than a $300 a month car payment and what ever you charged me didn't matter as long as it fell in that realm I was good.  

Now things have changed and I am super budget concious and worry about the impact on my credit.  I just bought a house last July which helped my credit a bit. My scores are decent as far as regular fico scores all above 720.  

My fico auto scores are 

EQ Fico Auto Score 8  693

               Auto Score 5  692

TU Auto Score 8 695

       Auto Score 4 733

EX  Auto Score 8 692

       Auto Score 2 749

I am due for the 3B update on March 29th  I am not sure if the Auto scores will go up or not since I have not had any Auto transactions in years. Is there any way for me to raise these a little more prior to my purchasing a new car?

So after that whole long winded post I am curious about how you would go about preparing for an auto loan if you were me. Should I get a pre approval from one of my banks. I have Capital One, USAA, Discover and Amex Bank accounts that offer auto loans I do not have a credit union account and sadly there aren't many in my area. The one I did look at Mid Florida I actually did not like them very much.  Should I let the dealer put out feelers for finance offers? I am pretty confident I will get approved my regular fico scores are good. I have 0 debt except my mortgage. My scores are down because after I got the mortgage I went ahead and got a handful of new cards I had been wanting but had held off until after I bought my house so my AAoA is about 2 years now.

I am looking to keep the inquiry impact on the lower side. With the mortgage and the new cards I got I am up to about 14 inquiries which I know a lot of banks don't like. I am hoping to get a loan at a decent interest rate and I honestly don't know which way to go to get it.  

Any advice you can give me would be great.

[Anonymous]

You won't have any problem getting fiananced, you have good scores so you will be fine.  I strongly believe that just about everyone will benefit from joining a good credit union like DCU, NFCU or Penfed and getting approved by them before you go shopping.  WIth your scores the interest is very low with credit unions.  When dealers arrange for loans for their customers they use that oppourtunity to mark up interest frequently, especially when its somone who doesn't have a lot of experience buying cars.  Having a preapproval in hand gives you a clear understanding of what the terms are, you may allow the dealer to try and beat the deal which will result in more HP's but that should not hurt your credit because they will all be within a few days for the same purpose.  If your buying used then most likely there are not factory sponsored finance deals (some do for CPO cars like BMW). If you decide to buy new it is possible you could get a very low sponsored rate, I think your scores are at the bottom end for some of those incentives.  I belong to NFCU, Penfed and DCU and do all of my banking and car loans through NFCU, the closest branch is over 100 miles away and I have never had the need to go there so don't feel like you need to be close to a branch to make it work.  Penfed and NFCU serve customers all over the world.

Let us know how it goes, be careful of dealer add on's, they love to try to sell you a warranty or protection plan for everything which is where they make substantial profit.  

[Anonymous]

Completely agree with all of the above. I was approved by DCU last year with a 631 EQ (per their Fico4) with 3.49% apr. They've reduced that a while percent by doing direct deposit with them and on time payments.
Getting financing before going to a dealership was great; I knew exactly how much I could get financing for and at what apr without tons of credit pulls