Capital One preapproved auto loan - good idea?

[Anonymous]

I received a letter from Capital One saying I'm preapproved for an auto loan from a local dealer. The timing is great, my old car is on her last wheel and I really do need a new one. But I've never taken out an auto loan before, and don't know what I'll be up against. Are Capital One preapproved loans good, or are there any pitfalls? I'm assuming I received the offer because my credit isn't the best in the world.

Today's FICO:
Experion 683
Equifax 666
TransUnion 668

I have a student loan with an outstanding debt of about 10k, and around 2k in revolving credit debt. According to MyFico, I would qualify for a 9.48 interest rate on a new car.

Should I go for the Cap One preapproved, or would my FICO possibly qualify me for another loan? Btw, I'm self employed and have been for 7 years. I can produce tax returns, though I do my own taxes, they are not prepared by an accountant. Will that matter? Thanks, I appreciate any advice

Message Edited by GingerSue on 08-28-2007 02:18 PM

[cgmiller63]

I had a Cap One Blank Check Auto Loan when I purchased my car in 2004.  I did not end up using the Blank Check as the dealer gave me a better rate.  I like to have a preapproved loan when I purchase a vehicle, it gives you more leverage. 

[Anonymous]

Thanks for the reply

I don't have a blank check loan. I received a letter in the mail stating I'm preapproved by Capital One, and I have to go to one certain dealer.

Unfortunately, I won't know what interest rate they will charge until I go to the dealer. I'm guessing that I won't have as much leverage. Will the dealer set the interest rate? I've read about dealer scams where they claim your credit is worse than it really is, and set higher rates than what you really qualify for. Or will they call Cap One for the rate?

[cgmiller63]

I'm not sure I would go to the dealers until I know what the interest rate is.Can you call Cap One and find out? You should also find out how much you were approved for. Also, this dealer may feel like this is a "done deal" and jack up the vehicle price.  If you are really interesting in buying a new car, I'd go to my local credit union. They have the best rates and you could go to any dealer. 

[Anonymous]

If you are looking NEW -
I would wait 30 days - the dealers/manufactures are "getting ready to drop their shorts" to move inventory-

[Anonymous]

lucky you! I have AMEX cards, the BOA AMEX and DELTA, CITI platinum, WAMU platinum. all at around $2,500 limit. My scores are:

TU-689

EQ-657

EX-633

I was declined by CAP one auto for a mere $10,000 car loan. i don't really need it. Just thought it would look good on my credit report. They claim short credit history , overall number of accounts and no previous car loan.

Consider yourself lucky and use it.

Good luck.

[Anonymous]

That's wierd montana bc Im only 19 and my oldest account is 1 1/2 yr old and the rest have been opened 2 months or so and cap one gave me blank check person to person loan for 8K(what I asked for)2 weeks ago and never even made me send anything as in proof of income or anything my scores were all 700+ but not alot of history.

[Anonymous]

FYI -- You can turn any of your pre-approved letters into Blank Checks, all you have to do is call them and ask them to upgrade your loan offer. I did that with mine and they overnighted the check.

[sh9730]

My blank check rate was MUCH LOWER than the dealer could get me when I went in....I have 2 other credit cards with them so that might have made a difference, but that blank check process was a breeze too!  Still with them on it a year later (even after 400 mailers to refinance it with others!)

[pattycake]

I would go with a local CU. My son was approved for a Capital One loan but the interest rate with the CU was about 2% lower, so he went with them.