New Contributor
ds3
Posts: 76
Registered: ‎10-02-2012
Any Hope?

I have been reading some of the posts today, and am wondering what some of you might think. My wife and I are coming out of a rough patch...she lost her job in the banking industry 5 years ago and just recently got a new job. I have a long (19 year) employment history, but a score in the 600+/- range due to collections and charge offs that are all a few years old because of the loss of income after she lost her job. We now make $130k a year, and have a combined debt to income ratio of 19% or so, which is almost entirely mortgage debt. My last auto loan was 7 years ago. What are our chances of getting a somewhat decent rate on a $35k car with 10% down? It seems to me that we are in ok shape, but I really want to avoid a ton of hard hits to find out. Any help is greatly appreciated...thanks! 

Moderator
Shogun
Posts: 12,902
Registered: ‎04-15-2011
Re: Any Hope?

The problem isn't getting the loan, it's getting the right financing.  You shouldn't have any problem getting the loan but you want it at a decent rate.  Do you belong to a CU?  They often offer the best rates on car loans.   Just a thought.  And have fun car shopping!


Starting Score: 504

July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+

Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!
New Contributor
Elcid89
Posts: 567
Registered: ‎10-04-2012
Re: Any Hope?

ds3 wrote:

I have been reading some of the posts today, and am wondering what some of you might think. My wife and I are coming out of a rough patch...she lost her job in the banking industry 5 years ago and just recently got a new job. I have a long (19 year) employment history, but a score in the 600+/- range due to collections and charge offs that are all a few years old because of the loss of income after she lost her job. We now make $130k a year, and have a combined debt to income ratio of 19% or so, which is almost entirely mortgage debt. My last auto loan was 7 years ago. What are our chances of getting a somewhat decent rate on a $35k car with 10% down? It seems to me that we are in ok shape, but I really want to avoid a ton of hard hits to find out. Any help is greatly appreciated...thanks! 


Honestly, your best hope of getting a decent rate is probably to buy down the loan. Front a larger downpayment and the lender is more likely to reduce the rate. Some captives are locking into a no tier bump policy though (VW Credit in particular), so it pays to shop around. If possible, offer to front a 10% downpayment and have the F&I guy shop it to all of his buyers. See what happens.

 

FICO 04 scores: 809 (EQ) 812 (EX) 818 (TU)

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Frequent Contributor
AZHeather
Posts: 304
Registered: ‎04-26-2012
Re: Any Hope?

If you still have collections, charge offs, etc. (and if you can hold off on buying for a bit), you may want to try to clean up as much as you possibly can with PFD and GW letters to try to maximize your score for a lower interest rate.

 

Good luck.


Starting Score: 634 EQ-FICO (4/20/12) 579 EX-FAKO (4/30/12) 629 TU-FICO (5/6/12)
Current Score: 698 EQ-FICO (11/26/12) 705 EX-(11/21/12) 698 TU-FICO (11/26/12)
Goal Score: 720 (for starters)


Take the FICO Fitness Challenge ~ In the garden until June 2013!
New Contributor
ds3
Posts: 76
Registered: ‎10-02-2012
Re: Any Hope?

Thanks for the replies. I do belong to a CU, so I'm going to hit them up at the end of the month and see what happens. I know the rate won't be great, but my CU does automatic rate drops each year based on credit scores, they offer a .75% reduction for auto pay, and I can buy the loan down almost 2 points with 10% down. If I can get close to 10%, I'll be happy. I plan to pay $1,000 a month on it regardless what the payment is to pay it off sooner, the rate will just determine how much sooner. 

Moderator
Shogun
Posts: 12,902
Registered: ‎04-15-2011
Re: Any Hope?

Sounds like an excellent plan!    Let us know how it goes.


Starting Score: 504

July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+

Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!
New Contributor
ds3
Posts: 76
Registered: ‎10-02-2012
Re: Any Hope?

So I got impatient and decided to test the waters with a dealer. First try...Experian Auto adjusted 616, offer of 20.99%...uh, no thanks. Dealer #2...Experian Auto adjusted 675, offer of 10.19%, VW Finance. Bought a 2013 Passat TDI SEL Premium...worked out well overall. Now I'll wait to hear from my CU tomorrow to see what they can do to beat it.

Moderator
Shogun
Posts: 12,902
Registered: ‎04-15-2011
Re: Any Hope?

Looks like a new car for you.  Hope CU comes through.  Good luck!


Starting Score: 504

July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+

Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!
Regular Contributor
EandK23
Posts: 178
Registered: ‎09-12-2012
Re: Any Hope?

Congrats on the new car!  

New Contributor
ds3
Posts: 76
Registered: ‎10-02-2012
Re: Any Hope?

My CU came through with 8.99% at 95% funding of MSRP. They also automatically drop the rate by .5% each year the loan is current with no lates. I am amazed at how easy it was to get financed, and thank you all for your advice.