topic Re: Auto Loan Debate in Auto Loans

Auto Loan Debate

Anonymous — Wed, 18 Aug 2010 06:58:40 GMT

I'm currently debating trading in my car (which is above water) and trying to see if I can obtain financing with a better rate. Originally in October of last year I had to buy a car ASAP. I also had to rebuild my credit - I was at 601(EQ) and 597(TU). My EX FAKO was around 560 at the time. I put $3000 down and was able to obtain a $10K loan from UACC. They gave me a 24% APR and I knew I was being robbed with their APR but I did what I had to do.

Fast forward to today. As of last week I scored at 659(EQ) and 654(TU). I've been paying close to double the monthly payment since I first received the loan and have on occasion even almost tripled it. Noticed UACC had been applying a lot of that money to interest in the first two months, since then I've requested that they only apply payments to the principal.

Current Loan:

Terms 36 Months

Original Balance: $10200

Current Balance: ~$5800

Car's Retail Value: $11,120

Trade-In Value: ("Good" condition) $6,575
Private Party: ("Good" condition) $8,570

I'm thinking I'll probably be rebucketed in another month or two, when I get past 660. But I've only begun to establish myself in the past year. Never had a late payment, my only derog is on EX. TU and EQ are both clean and clear. Currently the only items being reported to the CRAs are my single CC and the auto loan. CC limit of $400 balance is $20. AAoA of both is roughly 10 months.

I'm looking to either trade in or sell my car private party and obtaining a loan for a new car. I'm hoping to aim for 25-30K on the loan.

My question: What's the likelyhood of being approved right now? Or should I wait for another few months so the accounts age and then apply?

Re: Auto Loan Debate

Creditaddict — Wed, 18 Aug 2010 21:39:47 GMT

I don't see why you wouldn't be approved and if you go with someone like Toyota, Mazda, Ford I believe all of them have switched to tier 1,2, 3 credit for special financing... with toyota tier 3 is a 650 TU auto enhanced fico.

Re: Auto Loan Debate

nes — Thu, 19 Aug 2010 21:32:36 GMT

Tier 3 with Mazda/chase is 680(i work there), that should get u 0%

Re: Auto Loan Debate

nes — Fri, 20 Aug 2010 00:23:11 GMT

Tier 3 with Mazda/chase is 680(i work there), that should get u 0%

Re: Auto Loan Debate

Anonymous — Fri, 20 Aug 2010 04:05:35 GMT

0% down ? 0% apr at tier 3 doesn't sound right

Re: Auto Loan Debate

Creditaddict — Fri, 20 Aug 2010 04:07:24 GMT

Might help to put money down, but the 0% is right, tier 3 is 650 with Toyota

Re: Auto Loan Debate

Anonymous — Fri, 20 Aug 2010 04:13:25 GMT

0% apr for tier 3 at Toyota?

Re: Auto Loan Debate

Creditaddict — Fri, 20 Aug 2010 04:17:46 GMT

yes. I was trying to lease a prius and they told me they needed to pull a 650 from either EQ or TU (they will use the highest score) to qualify for the lease special they were having a few months ago of $199 2k down, now i think it's $239 no money down

Re: Auto Loan Debate

creditchild — Mon, 30 Aug 2010 20:18:22 GMT

hey introvert, with your history i would be smart about your next car purchase. like i explained

to another person here, the place to get a auto loan with these days and times would be a credit union.

they have way better rates,and in your case you would most likely get whatever you want.

i just came out of the same situation you are in now. then to make things better, you wouldn't probably

have to put down anything. so just be smart about it. and weigh your options. we have start being

smart the way we use our credit and spend out money. as you found a while back you really got screwed

on the last car loan, so just be careful, your in good positon now. GOOD LUCK!!!!!

Re: Auto Loan Debate

Anonymous — Fri, 01 Oct 2010 22:36:32 GMT

Update: Went to Mazda, negociated on price on a new 2010 Speed3. (I don't remember the exact price, was something like $22000 fully loaded.) They ran my credit, EX Auto enhanced: 625. Didn't have my trade-in at the time, so she said she wanted to wait until I brought it in.

Went back the next day. The Finance manager came at me with 2K less than KBB trade-in value for my car. I declined and offered $1,000 cash down to obtain a 2nd loan and said I'd take care of the existing loan by selling my car private party. She then came up with a spiel about car's history and basically wanting more cash up front from me as well as my car. I told her that I knew my scores are higher on EQ/TU. She then told me she'd already run my TU score and that it was 675.

Told her I'd stick to $1,000 cash down. She said she'd try Mazda Auto Finance and that she'd call me with status. That was a week ago, she never called.

Re: Auto Loan Debate

Anonymous — Sun, 03 Oct 2010 05:02:51 GMT

Thoughts on this thread:

1- If you were in a Bad Credit situation only a year ago, Even though you have improved your score I cannot see that all negatives/evidence have been purged from your bureau history which can easily be hindering you in the financing stages.

2- A second owner on a car rarely means the car is considered "good" condition. There are probably chips, scratches and dents you do not see casually. Rest assured they are there. rest assured if the dealership goes to sell it the potential customers will see them and dicker over them.

3- There is no Kelly Blue Book store in Tacoma where all Kelly Blue Book prices are met and kept. KBB is a "Guide" from which market variables influence the values much more. Try to sell a convertable in January in Cleveland and see how close to Kelly you can get. Also the place you are trying to trade the car in can influence the trade in value. A Ford dealership may be able to give you a better trade in on a F-250 Diesel then a Mercedes dealership.

If the Finance manager came to you with 2K less then you expected and you are still modeling your transaction on that 2K, that may be a huge obstical in your way. Could there be leeway? yes but I doubt 2K. If she is valuing the car at less then she will need more cash from you to make the difference.

4-Private party sales in General will net you more then a trade in, but you are doing the work cleaning, showing and selling the car. And also, you may have to wait until the old car tradeline shows paid in full before you can get a new trade line established, so in short you will be out a car as you ve sold it to the other person and you are waiting for the credit report to show clear.

5- What was wrong with your car's history? In this time of Carfax any accident or event that shows will dock the resale value and of course change the trade in value.

6- Rarely do I see someone go from a bad credit car transaction to an excellent on all fronts transaction for their next one. You may have to accept that you may not get the exact deal you want.

Re: Auto Loan Debate

Anonymous — Sun, 03 Oct 2010 07:07:27 GMT

1. I only have one paid collection on EQ, which was paid off in 2008. Still trying to GW that one off. TU has 3 paid collections, one of which should be disappearing soon. Still GW'ing the other two. EX has a collection that I'm working on getting removed. Aside from that there isn't much left to be done aside from slowly rebuilding and keeping the course. My problem right now is lack of history.

2. I was expecting to be lowballed, but it's obvious she's trying to get me to roll over some negative equity.

3. I'm not firm on KBB value by any means. I'm just using it as a loose guideline. I merely presented it as a trade-in to see what they'd offer, I have always planned to sell it private party.

4. As I have well documented service/maintenance records, audio and performance mods it would best be suited for private party sale. I'm not looking for a quick sale, but I am positive an enthusiast will pay much more than what she offered.

5. They were a bit leery of the catback exhaust and cold air intake and given that it's meant for "spirited drivers", could not have faith in the previous owner.

6. I originally planned to refinance the loan in a year, given that 24% is pretty terrible. Well, after a year, refinancing a 2003 doesn't seem like a wise financial decision so I decided to take a look into upgrading. Nothing that happened was unexpected. I'll just continue to improve the score and offer more cash down next time, say in another 4-5 months.

Re: Auto Loan Debate

Anonymous — Sun, 03 Oct 2010 20:35:49 GMT

@Anonymous wrote:
1. I only have one paid collection on EQ, which was paid off in 2008. Still trying to GW that one off. TU has 3 paid collections, one of which should be disappearing soon. Still GW'ing the other two. EX has a collection that I'm working on getting removed. Aside from that there isn't much left to be done aside from slowly rebuilding and keeping the course. My problem right now is lack of history. Lack of history is a huge problem, car loans are NOT driven by scores alone..

2. I was expecting to be lowballed, but it's obvious she's trying to get me to roll over some negative equity. I truly do not think you rvehicle is worth at all near what you think it should be.

3. I'm not firm on KBB value by any means. I'm just using it as a loose guideline. I merely presented it as a trade-in to see what they'd offer, I have always planned to sell it private party.

4. As I have well documented service/maintenance records, audio and performance mods it would best be suited for private party sale. I'm not looking for a quick sale, but I am positive an enthusiast will pay much more than what she offered.

5. They were a bit leery of the catback exhaust and cold air intake and given that it's meant for "spirited drivers", could not have faith in the previous owner.
Performance Modifications and Expensive stereos detract from a cars trade in value and resale value. You may have spent 2K on the stereo, but when the dealership is trying to sell the car as a car, the lack of trunk due to the speakers and the stereo does not seem to impress 99% of buyers. The buyers it does impress rarely have the financial standing to finance a loan. i remember a guy telling me how much he spent on the stereo and we told him he was welcome to remove it and install the old stock one- a grandfather coming in buying a car for his neice was not going to see the value in that.
Performance mods void most warranties, and potentially make the car unwarrrantyable on sale. They also leave a buyer wondering if the car is being hurt or helped by the install, and where they will get the car serviced at. There is also the ugly thought that the extras they do not really want on the car may require seperate service of their own.

Again HIGHLY LIMITING the potential pool of buyers. Dealerships do not take on trade ins as projects, they want the fastest turn around possible as the vehicle depreciates every month it remains unsold.

++++Any vehicle with that kind of modification is not able to be competently rated by KBB in any form.

6. I originally planned to refinance the loan in a year, given that 24% is pretty terrible. Well, after a year, refinancing a 2003 doesn't seem like a wise financial decision so I decided to take a look into upgrading. Nothing that happened was unexpected. I'll just continue to improve the score and offer more cash down next time, say in another 4-5 months.

Your best bet would be to pay the vehicle off completely, Private party sale it, and try to get into a new car at that time.