topic Re: Minimizing auto loan inquiries in Auto Loans

Minimizing auto loan inquiries

meeklo062704 — Thu, 22 Jan 2015 06:08:15 GMT

I've read all inquiries for auto loans in a 45 day period only count as one inquiry, but I've also read that it's for inquiries in a 15 day period. I plan on shopping around as I'm at that point where my fico is probably tier 3, but the auto enhanced is probably tier 2, so I want to give myself the best shot without racking up a bunch of inquiries because of a misunderstanding. What is the best way to shop around while keeping inquiries down as I only have 4 right now.

My first auto loan was a cross your fingers and hope you get approved loan because my credit was terrible. Are the online auto loan sites any good? Should I go through my bank? I'm not a credit union member, so are they out as an option? Any pointers would help out as this is uncharted territory for me.

Re: Minimizing auto loan inquiries

Anonymous — Thu, 22 Jan 2015 06:35:11 GMT

@meeklo062704 wrote:
I've read all inquiries for auto loans in a 45 day period only count as one inquiry, but I've also read that it's for inquiries in a 15 day period. I plan on shopping around as I'm at that point where my fico is probably tier 3, but the auto enhanced is probably tier 2, so I want to give myself the best shot without racking up a bunch of inquiries because of a misunderstanding. What is the best way to shop around while keeping inquiries down as I only have 4 right now.

My first auto loan was a cross your fingers and hope you get approved loan because my credit was terrible. Are the online auto loan sites any good? Should I go through my bank? I'm not a credit union member, so are they out as an option? Any pointers would help out as this is uncharted territory for me.

I'll let others suggest where to shop around but just so you understand clearly, the number of inquiries that are related to auto financing in a 2 week period count as 1 only for purposes of FICO 08 scoring. They still will show as individual inquiries on your credit report and can hurt you regardless of your FICO score. So you're doing the right thing in trying to minimize the number you get. A credit union isn't out as option because you can easily join many of them online. DCU is one that many people here have used. I would avoid any online preapproval sites because the dealer will still pull your credit once you get there.

Re: Minimizing auto loan inquiries

Revelate — Thu, 22 Jan 2015 06:56:17 GMT

2 weeks for FICO '98 scoring.

FICO 8 is actually 45 days, but since EX Risk Model v2 is one of the trifecta, and that's a 98 score, you're right; two weeks is where it should be for all recommendations.

Re: Minimizing auto loan inquiries

Anonymous — Thu, 22 Jan 2015 07:01:10 GMT

@Revelate wrote:
2 weeks for FICO '98 scoring.

FICO 8 is actually 45 days, but since EX Risk Model v2 is one of the trifecta, and that's a 98 score, you're right; two weeks is where it should be for all recommendations.

Thanks for the clarification

Re: Minimizing auto loan inquiries

meeklo062704 — Thu, 22 Jan 2015 07:43:06 GMT

Considering how far I was in the hole with credit, it's been a tough climb. I've been really good about not wasting inquiries, so I'm actually at 100% with inquiry to approval over the last year and a half. Am I better off seeing if the dealer will approve me, then start shopping if they don't? Or am I better off having something lined up for leverage when I go in?

My score is somewhere between 630-650. The auto enhanced should raise it because my wife and I paid off a 36 month loan in August with flawless payment history. We both have 2 credit cards that are all 3-7 months old, added each as authorized users. They've been paid perfectly and utilization will be below 30% after the next payment. We work at the same place with over 3 years on the job, and it comes with a free apartment so dti is low. I have a couple small medical collections that are a few hundred from paid off, and a tax lien that we are in a payment arrangement on.

My.only concern is if we'll get denied for the amount of the loan. Our first loan was around $10,000, but the new one will be around $25,000. So I'm not sure how'll it'll go. My hope is they'll see the short loan showed stability on a higher payment so they'll let it go through. I want to get a longer term for the lower payment, then refi when or scores get into the 700s.

Any pointers on how to go about the loan shopping process, or increasing approval chances would be greatly appreciated. We're almost out of the hole into a credit comfort zone, and another car loan would help out.

Re: Minimizing auto loan inquiries

StartingOver10 — Thu, 22 Jan 2015 12:19:51 GMT

If your goal is to get a good rate with minimal inquiries, then use a CU for financing. They pull once or at most twice if you include the pull for membership and you end up with a really good rate and good terms. Before you apply, make sure you speak to someone about your file being thin (only a few months for your cc's). If they need more history, then find another CU.

If you have a dealer pull your credit you will end up with a bunch of inquiries. Even if you tell the dealership to limit their inquiries, it seems they ignore the limitation or maybe don't have the capacity to only pull one. From my experience and others here you end up with a minimum of 5+ inquiries and some of these dealerships have much more than 5.

Everytime I have used a CU it was only one inquiry for the tradeline and a much better loan.

Re: Minimizing auto loan inquiries

TRC_WA — Thu, 22 Jan 2015 14:58:04 GMT

My plan was to use my home CU BECU for my auto financing... and they approved me for $25k. I attempted to recon and they wouldn't budge over $28k despite the fact I have perfect credit with them with my CC and nearly a year of payments with them ($373 payment due, $500 actual payment) since I refinanced with them in March 2014.

So I apped with Chrysler Capital and got a $47k preapproval.

When I found the car I wanted the dealership said they can get me a better rate... so I let them do it and they did... 4.99% with Columbia Credit Union here in WA. I took about 15 INQs over the last week and lost 1 point on EQ with the first... NONE after that according to myFICO.

I'll probably refinance in a year with BECU but I'm happy with the rate I got all things considered.

One thing I do want to mention is even if you go in there with a preapproval from your CU... the dealership will still pull your credit. They told me it's the law as part of the identity verification homeland security stuff after 9/11. I got the same story from both dealerships.

At any rate, I got my Challenger and I'm in the garden. The auto loan process wasn't all that difficult despite the numerous inquiries. My score wasn't affected.

Re: Minimizing auto loan inquiries

StartingOver10 — Thu, 22 Jan 2015 18:53:39 GMT

@TRC_WA wrote:
My plan was to use my home CU BECU for my auto financing... and they approved me for $25k. I attempted to recon and they wouldn't budge over $28k despite the fact I have perfect credit with them with my CC and nearly a year of payments with them ($373 payment due, $500 actual payment) since I refinanced with them in March 2014.

So I apped with Chrysler Capital and got a $47k preapproval.

When I found the car I wanted the dealership said they can get me a better rate... so I let them do it and they did... 4.99% with Columbia Credit Union here in WA. I took about 15 INQs over the last week and lost 1 point on EQ with the first... NONE after that according to myFICO.

I'll probably refinance in a year with BECU but I'm happy with the rate I got all things considered.

One thing I do want to mention is even if you go in there with a preapproval from your CU... the dealership will still pull your credit. They told me it's the law as part of the identity verification homeland security stuff after 9/11. I got the same story from both dealerships.

At any rate, I got my Challenger and I'm in the garden. The auto loan process wasn't all that difficult despite the numerous inquiries. My score wasn't affected.

^^^^^^We have had that discussion on here several times - but the dealership will tell you they have to pull your credit for the above stated reason, but there is another form they can have you fill out and sign that is NOT an authorization to pull credit and it fulfills the homeland security obligation. I forget the form, but will look for it. The whole reason they pull your credit is to get the loan - period. They make more on the back end in the F&I department than they do on the vehicle so if they can give you an excuse to pull your credit they will do it. Even if you want to pay cash. I completely understand the OFAC issue - but putting on 5+ inquiries to check against the OFAC list - no way.

Here is one of the threads discussing this issue http://ficoforums.myfico.com/t5/Auto-Loans/WTH-Patriot-act-OFAC-requires-me-to-fill-out-a-credit/m-p/2172379#M31371

Re: Minimizing auto loan inquiries

Anonymous — Thu, 22 Jan 2015 19:11:54 GMT

I worked at a dealership after 9/11 and we sold many cars to people with preapproved loans and never ran their credit. It's a BS excuse that I've never heard of until reading it here. Additionally I just purchased a car in July, walked in the dealership and told them I had my financing lined up with USAA and drove off with the car without giving them anything from USAA. They never ran my credit.

StartingOver is dead on, it's just an excuse for them to run your credit and try to secure the financing. Tell them to pound sand or you're going elsewhere.

Re: Minimizing auto loan inquiries

Anonymous — Thu, 22 Jan 2015 19:16:19 GMT

@StartingOver10 wrote:
They make more on the back end in the F&I department than they do on the vehicle so if they can give you an excuse to pull your credit they will do it. Even if you want to pay cash. I completely understand the OFAC issue - but putting on 5+ inquiries to check against the OFAC list - no way.
Here is one of the threads discussing this issue http://ficoforums.myfico.com/t5/Auto-Loans/WTH-Patriot-act-OFAC-requires-me-to-fill-out-a-credit/m-p/2172379#M31371

Well let's not go too far overboard 😀. Yes, sometimes dealerships make more in F&I then on the car itself but that's certainly not the case most of the time. With the advent of manufacturers special financing like 0% it's very hard to do that any longer. A lot of times if the customer takes advantage of the special financing dealers will make only the $50 or $100 that the manufacturers finance company gives them for processing the loan.

Re: Minimizing auto loan inquiries

antso91 — Thu, 22 Jan 2015 19:19:57 GMT

@TRC_WA wrote:
My plan was to use my home CU BECU for my auto financing... and they approved me for $25k. I attempted to recon and they wouldn't budge over $28k despite the fact I have perfect credit with them with my CC and nearly a year of payments with them ($373 payment due, $500 actual payment) since I refinanced with them in March 2014.

So I apped with Chrysler Capital and got a $47k preapproval.

When I found the car I wanted the dealership said they can get me a better rate... so I let them do it and they did... 4.99% with Columbia Credit Union here in WA. I took about 15 INQs over the last week and lost 1 point on EQ with the first... NONE after that according to myFICO.

I'll probably refinance in a year with BECU but I'm happy with the rate I got all things considered.

One thing I do want to mention is even if you go in there with a preapproval from your CU... the dealership will still pull your credit. They told me it's the law as part of the identity verification homeland security stuff after 9/11. I got the same story from both dealerships.

At any rate, I got my Challenger and I'm in the garden. The auto loan process wasn't all that difficult despite the numerous inquiries. My score wasn't affected.

Congrats on the car, I sent you a PM.

Re: Minimizing auto loan inquiries

StartingOver10 — Thu, 22 Jan 2015 19:34:29 GMT

@Anonymous wrote:
@StartingOver10 wrote:
They make more on the back end in the F&I department than they do on the vehicle so if they can give you an excuse to pull your credit they will do it. Even if you want to pay cash. I completely understand the OFAC issue - but putting on 5+ inquiries to check against the OFAC list - no way.
Here is one of the threads discussing this issue http://ficoforums.myfico.com/t5/Auto-Loans/WTH-Patriot-act-OFAC-requires-me-to-fill-out-a-credit/m-p/2172379#M31371
Well let's not go too far overboard 😀. Yes, sometimes dealerships make more in F&I then on the car itself but that's certainly not the case most of the time. With the advent of manufacturers special financing like 0% it's very hard to do that any longer. A lot of times if the customer takes advantage of the special financing dealers will make only the $50 or $100 that the manufacturers finance company gives them for processing the loan.

Actually my thinking was this: the F&I department is the one that tries to get the consumer to buy a bunch of needless extras. One of those extras would be to get the consumer to accept a higher interest rate than what the bank actually requires (premium par rate) but there are other extras. For example: GAP insurance, extended warranty, service contracts, paint and fabric protection, 'etching' etc. I consider all these 'back end' profit type items that have to be negotiated again in the F&I office (negotiated out of the contract).

But I do get your point Irish80

Re: Minimizing auto loan inquiries

TRC_WA — Thu, 22 Jan 2015 19:38:54 GMT

@StartingOver10 wrote:
@TRC_WA wrote:
refinance in a year with BECU but I'm happy with the rate I got all things considered.

One thing I do want to mention is even if you go in there with a preapproval from your CU... the dealership will still pull your credit. They told me it's the law as part of the identity verification homeland security stuff after 9/11. I got the same story from both dealerships.

At any rate, I got my Challenger and I'm in the garden. The auto loan process wasn't all that difficult despite the numerous inquiries. My score wasn't affected.

^^^^^^We have had that discussion on here several times - but the dealership will tell you they have to pull your credit for the above stated reason, but there is another form they can have you fill out and sign that is NOT an authorization to pull credit and it fulfills the homeland security obligation. I forget the form, but will look for it. The whole reason they pull your credit is to get the loan - period. They make more on the back end in the F&I department than they do on the vehicle so if they can give you an excuse to pull your credit they will do it. Even if you want to pay cash. I completely understand the OFAC issue - but putting on 5+ inquiries to check against the OFAC list - no way.
Here is one of the threads discussing this issue http://ficoforums.myfico.com/t5/Auto-Loans/WTH-Patriot-act-OFAC-requires-me-to-fill-out-a-credit/m-p/2172379#M31371

@Anonymous wrote:
I worked at a dealership after 9/11 and we sold many cars to people with preapproved loans and never ran their credit. It's a BS excuse that I've never heard of until reading it here. Additionally I just purchased a car in July, walked in the dealership and told them I had my financing lined up with USAA and drove off with the car without giving them anything from USAA. They never ran my credit.

StartingOver is dead on, it's just an excuse for them to run your credit and try to secure the financing. Tell them to pound sand or you're going elsewhere.

Thanks to you both for the info... I didn't think to question it because I assumed it was legit.

I went to 2 dealerships and including the 2 INQs I took from my own apps (BECU, Chrysler Capital) I took 18 total INQ's from my car shopping.

2 TU

5 EX

11 EQ

As said, all I lost was 1 point on EQ when the 1st INQ hit. Didn't lose any on EX or TU. They did get me a better rate... 4.99% but it may even be slightly lower than that... I'm waiting on all the paperwork from CCU.

At any rate, it's too late to complain about it but next time I'll know better... if there even is a next time. I bought my dream car and it's mine till I die or it dies.

Re: Minimizing auto loan inquiries

Anonymous — Thu, 22 Jan 2015 19:47:10 GMT

@StartingOver10 wrote:
@Anonymous wrote:
@StartingOver10 wrote:
They make more on the back end in the F&I department than they do on the vehicle so if they can give you an excuse to pull your credit they will do it. Even if you want to pay cash. I completely understand the OFAC issue - but putting on 5+ inquiries to check against the OFAC list - no way.
Here is one of the threads discussing this issue http://ficoforums.myfico.com/t5/Auto-Loans/WTH-Patriot-act-OFAC-requires-me-to-fill-out-a-credit/m-p/2172379#M31371
Well let's not go too far overboard 😀. Yes, sometimes dealerships make more in F&I then on the car itself but that's certainly not the case most of the time. With the advent of manufacturers special financing like 0% it's very hard to do that any longer. A lot of times if the customer takes advantage of the special financing dealers will make only the $50 or $100 that the manufacturers finance company gives them for processing the loan.
Actually my thinking was this: the F&I department is the one that tries to get the consumer to buy a bunch of needless extras. One of those extras would be to get the consumer to accept a higher interest rate than what the bank actually requires (premium par rate) but there are other extras. For example: GAP insurance, extended warranty, service contracts, paint and fabric protection, 'etching' etc. I consider all these 'back end' profit type items that have to be negotiated again in the F&I office (negotiated out of the contract).

But I do get your point Irish80

No doubt that has happened in the past and still does and yes those are usually under the F&I department unless they happen to employ some hot looking customer service rep to try to sell those to you.. It just doesn't happen as much any longer because of the Internet and more educated consumers. The only one of those aftermarket products I recommend is the extended warranty if you can buy it for a good price and it's the one from the manufacturer and not some third party warranty. Then the best way to go about it is to offer $100 over the cost to the dealership for the warranty and have them show you the cost. Extended warranties can be valuable depending on your driving habits. Gap insurance can be valuable if you didn't put much down but you can get it cheaper from your insurance company. The rest of the stuff you mention is crap (well etching sometimes but it's very inexpensive). People just have to be prepared and stand their ground.

Re: Minimizing auto loan inquiries

StartingOver10 — Thu, 22 Jan 2015 19:49:36 GMT

@TRC_WA wrote:
.....
Thanks to you both for the info... I didn't think to question it because I assumed it was legit.

I went to 2 dealerships and including the 2 INQs I took from my own apps (BECU, Chrysler Capital) I took 18 total INQ's from my car shopping.

2 TU
5 EX
11 EQ

As said, all I lost was 1 point on EQ when the 1st INQ hit. Didn't lose any on EX or TU. They did get me a better rate... 4.99% but it may even be slightly lower than that... I'm waiting on all the paperwork from CCU.

At any rate, it's too late to complain about it but next time I'll know better... if there even is a next time. I bought my dream car and it's mine till I die or it dies.

Congrats! I'm glad you your new car!

Re: Minimizing auto loan inquiries

TRC_WA — Thu, 22 Jan 2015 20:16:46 GMT

@Anonymous wrote:
No doubt that has happened in the past and still does and yes those are usually under the F&I department unless they happen to employ some hot looking customer service rep to try to sell those to you.. It just doesn't happen as much any longer because of the Internet and more educated consumers. The only one of those aftermarket products I recommend is the extended warranty if you can buy it for a good price and it's the one from the manufacturer and not some third party warranty. Then the best way to go about it is to offer $100 over the cost to the dealership for the warranty and have them show you the cost. Extended warranties can be valuable depending on your driving habits. Gap insurance can be valuable if you didn't put much down but you can get it cheaper from your insurance company. The rest of the stuff you mention is crap (well etching sometimes but it's very inexpensive). People just have to be prepared and stand their ground.

I went with both... I got the extended warranty mainly for the multiple computer systems in the car. It was a 3rd party warranty though... and wasn't even called a warranty. It was called an extended service plan that covered pretty much everything bumper to bumper. I know I probably paid too much but in the end it was only an extra $25 a month on my payment. I also got GAP insurance... because I put $0 down on a $40,000 car. I checked with Progressive and they were $3 a month cheaper with what they offered... (it wasn't called GAP it was called something else) I just stayed with the dealer insurance. The GAP insurance was $23 a month. If there is a better option out there by all means point me in the right direction.

I can cancel this and switch at any time I believe...

@StartingOver10 wrote:
@TRC_WA wrote:

At any rate, it's too late to complain about it but next time I'll know better... if there even is a next time. I bought my dream car and it's mine till I die or it dies.

Congrats! I'm glad you your new car!

I only have one word to describe this car...

BEAST.

Re: Minimizing auto loan inquiries

meeklo062704 — Thu, 22 Jan 2015 20:30:14 GMT

@TRC_WA wrote:
My plan was to use my home CU BECU for my auto financing... and they approved me for $25k. I attempted to recon and they wouldn't budge over $28k despite the fact I have perfect credit with them with my CC and nearly a year of payments with them ($373 payment due, $500 actual payment) since I refinanced with them in March 2014.

So I apped with Chrysler Capital and got a $47k preapproval.

When I found the car I wanted the dealership said they can get me a better rate... so I let them do it and they did... 4.99% with Columbia Credit Union here in WA. I took about 15 INQs over the last week and lost 1 point on EQ with the first... NONE after that according to myFICO.

I'll probably refinance in a year with BECU but I'm happy with the rate I got all things considered.

One thing I do want to mention is even if you go in there with a preapproval from your CU... the dealership will still pull your credit. They told me it's the law as part of the identity verification homeland security stuff after 9/11. I got the same story from both dealerships.

At any rate, I got my Challenger and I'm in the garden. The auto loan process wasn't all that difficult despite the numerous inquiries. My score wasn't affected.

My boss got his challenger a few years ago. That car is his baby. All natural cleaning supplies, unscented only. He even has a brush that he uses to clean the AC vents when he's at traffic lights. But that's why it still smells like a new car after 3 years. Congrats on yours, enjoy.

I know I can afford a $25,000-$30,000 loan payment no problem. If they don't think my credit reflects that ability, and try to give me a smaller loan, is it unheard of to pull a second loan to equal out to $25,000-$30,000? I know I'm still in that spot where I'm going to have to pay extra on certain things to get up to the credit promised land. So if that's what needs to be done, and it's not a ridiculous idea, I'm willing to do it for my car.

Re: Minimizing auto loan inquiries

Revelate — Fri, 23 Jan 2015 02:33:23 GMT

FWIW if I ever buy a new car, I will be securing financing beforehand and then letting the dealer try to beat it after we've agreed upon a price. Other than absolute inquiry count which I don't care about when it comes to auto and mortgage inquiries, there's really no reason not to let the manufacturer's lender try to beat it.

Realistically we should be rate shopping, and I'm all for letting the dealer do that for me where they have the relationships with the lenders ("how badly do you want to make this loan?"). Used car, it's hard to beat some of the CU's many of which are around 2% currently, less value of doing it then if you have excellent financing in hand already... but in that case I'll probably let my CU's compete against each other beforehand anyway .

Re: Minimizing auto loan inquiries

meeklo062704 — Fri, 23 Jan 2015 10:37:33 GMT

I'm not currently a member of a CU, I back with Chase. Are CU's better with loans to people who are already members, or do they year walk ins who are willing to join the same? I've also checked the auto approval thread and seen a lot of people say capital one financed them. I have my secured card with then. Are they worth checking out?

Re: Minimizing auto loan inquiries

Anonymous — Fri, 23 Jan 2015 10:55:22 GMT

Some can be good to walk ins, some better if you already have a relationship. ALLIANT CU sends me a pre approval something in the mail weekly for car financing. Good rates, but my lil local CU has better ones, and Im not in the market for a car and mine is paid off. Ive heard people get pre approvals upon joining alliant, dcu, navy federal, and some of the other larger national credit unions. Visit a couple of your local CUs, and if nothing else start a savings account with the one you like best. My local one is the reason I started my rebuilding and the reason I am here.