topic Re: Auto refinance questions in Auto Loans

Auto refinance questions

Anonymous — Wed, 06 Apr 2016 16:37:42 GMT

Hello,

I've been reading a lot on this forum and finally decided to make an account. I have had some credit troubles early on, and I'm working super hard to take care of everything. My topic is about my current auto loan though.

I currently work at a car dealership as a salesman. Coming into the job, I had been using my parents car. So obviously when the offer was brought up that I could get a brand new car at only 19 years old I went for it no questions asked. So I currently have a 2015 Nissan Sentra S that is financed through Santander at an insane interest rate of 21.12%. I took it, because I didn't have good credit (and not very much of it, other than the auto loan I have 2 credit cards) and because I really needed a car. My score was around a 560-570 when I got the loan. I had 2 late payments and a small collection of 112$ on my report.

I have only had this loan about 4 months, but in that short period of time I have continued on time payments, decreased some of my credit card debt, and also even managed to get my late payments taken off. As it stands, my credit is in the 640 range now. I actively use creditkarma just to moniter whats going on and keep my eye on things, and obviously the refinance "offers" caught my eye. "As low as 3.49% APR". Obviously I don't expect to be THAT low, but I was told even if I could get approval for something in the 10ish range, I would be saving over 100$/month just in interest.

On top of that, my big question is this. I still work at this dealership, and one of the "bonuses" of buying a new car from them is that they add an additional 250$/month onto my check, which is their way of paying a portion of my car payment. Which is slightly over half of what I pay per month. If I was able to show this to a potential lender, would it be relevant at all and help my case? And the biggest thing is, should I go for a refinance right away?

Thanks!

Re: Auto refinance questions

Cellice — Wed, 06 Apr 2016 17:24:07 GMT

Have you tried having the collection deleted? I would try to do a pay in full for deletion!

Ouch over $500/month for a Sentra. How long is the loan for?

The 640 range should get you below a 10% rate. However, pull your actual fico scores and not your credit karma scores.

Re: Auto refinance questions

Anonymous — Wed, 06 Apr 2016 17:45:01 GMT

The collection was a recent addition to my credit. Very disappointed that it's on there because it shouldn't be. I have a dispute opened with TransUnion currently which is still pending. But depending on the result of that I want to attempt a pay-for-delete among another method of removal.

My payment is currently 480/month (I purchased GAP, in addition to a maintenance package for employee pricing which I regret). The loan is/was a 72month with a 21.12% APR. I make about 1700-2000/month after taxes, and other than my car I don't have a ton of things to pay for so it's not that I have a problem with the payment, it's that I'm almost certain that like half or maybe more of my payment is going just to interest. My thoughts were if I could get a decent rate I would love to knock it down to a 60 month term.

My credit history isn't very long. I have 2 credit cards, one that's almost 2 years old and the other is about a year old. Plus my auto loan for the last 4 months. My fico (last time I looked, this was before Cap1 took my 2 late payments off) was at like a 575. If I could get in the 8-10 range I would do it no problem. Because that would drop my payment pretty significantly and my thoughts were to put away some of the savings, and use some towards the principal of the car and knock it out earlier.

Re: Auto refinance questions

jim44 — Wed, 06 Apr 2016 18:00:26 GMT

@Anonymous wrote:
Hello,

I've been reading a lot on this forum and finally decided to make an account. I have had some credit troubles early on, and I'm working super hard to take care of everything. My topic is about my current auto loan though.

I currently work at a car dealership as a salesman. Coming into the job, I had been using my parents car. So obviously when the offer was brought up that I could get a brand new car at only 19 years old I went for it no questions asked. So I currently have a 2015 Nissan Sentra S that is financed through Santander at an insane interest rate of 21.12%. I took it, because I didn't have good credit (and not very much of it, other than the auto loan I have 2 credit cards) and because I really needed a car. My score was around a 560-570 when I got the loan. I had 2 late payments and a small collection of 112$ on my report.

I have only had this loan about 4 months, but in that short period of time I have continued on time payments, decreased some of my credit card debt, and also even managed to get my late payments taken off. As it stands, my credit is in the 640 range now. I actively use creditkarma just to moniter whats going on and keep my eye on things, and obviously the refinance "offers" caught my eye. "As low as 3.49% APR". Obviously I don't expect to be THAT low, but I was told even if I could get approval for something in the 10ish range, I would be saving over 100$/month just in interest.

On top of that, my big question is this. I still work at this dealership, and one of the "bonuses" of buying a new car from them is that they add an additional 250$/month onto my check, which is their way of paying a portion of my car payment. Which is slightly over half of what I pay per month. If I was able to show this to a potential lender, would it be relevant at all and help my case? And the biggest thing is, should I go for a refinance right away?

Thanks!

Dont know what the time frame is for refi maybe 6 months of good history? Have you talked with your F&I mgr? I understand he can't do a refi for you, however he/she may be able to give you guide lines for a chance for an approval maybe at a local CU. They have great rates and some work with mid-600 CS. As far a the car payment allotment, most lenders will look at it like a bonus/extra income. If this bonus is catagorized on your paystub, it may be a plus to lenders who ask for POI. You may also have to consider a down payment if your car NADA value is below what you owe on it at this time. BTW Nice bonus... do you get any discount on new car prices themselves? Sometimes I wonder what it would be like to work for a franchised dealer and spend my lunch hours sitting in all those nice brand new cars.... that I could NEVER afford. Good luck with your refi endeavor.

Re: Auto refinance questions

Cellice — Wed, 06 Apr 2016 18:06:16 GMT

You are only 4 months into your loan. You should be able to have the addons canceled for a partial refund! This will help you lower the payment even more when you refinance.

You have a few options available right now. Refinance for a interest rates in the 10% range right now, then refinance again in a few months once your score improves even more. The other option is to cancel the addons, resolve the collections and pay down some of the principle and then refinance at a much lower rate once your score supports it. 21% is very high rate so if you can reduce it in the mean time go for it!

Some unsolicited advice: 72 months is a very long time. The amount of money you earn per month and your financial obligation can change substanially during that time. If you read some of the threads of people that ran into financial hardship on this forum you will see a common theme. Their income or financial obligations changed dramtically or without warning.

Re: Auto refinance questions

Anonymous — Wed, 06 Apr 2016 18:30:17 GMT

I talked with one of my finance guys and he thinks I should try sooner than later. My main concern is how much the interest is, and how little of my payment is actually paying off the car. My payoff is a smidge over 19 (yikes). The dealership life is alright, and I'm disappointed in myself that I did this without getting into it more (I guess that's what happens when you really need a car). I want to get some sort of a resulotion soon and try to refinance because if I were to get to 10%, it would bring my payment down like 125$/month which is crazy, or I could drop it to a 60 month term and still drop about 75 a month.

Re: Auto refinance questions

Cellice — Wed, 06 Apr 2016 19:14:41 GMT

For 72 months:

19k @ 10% is 350/month

19k @ 5% is 300/month

So reducing your interest will help a lot. It will also help to get the principle down by canceling as much of the addons as possible. How much were all the addons?

Out of curiosity go to https://lo-web-fe.capitalone.com/PreApproval/landing and see what Capital One prequalifies you for. This doesnt hard pull your credit. Its a good indicator if you can bring down the rate.

Re: Auto refinance questions

Anonymous — Wed, 06 Apr 2016 19:29:23 GMT

I would be thrilled to get it to 10 or under but I have no idea how realistic that could be.

I tried the capital one thing and even though I select no I dont have a personal code it won't let me get past it.

Re: Auto refinance questions

Anonymous — Wed, 06 Apr 2016 19:31:21 GMT

I'm not sure if this means bad news, but it seemed to work - but the message I got was that we couldn't find an offer for you

Re: Auto refinance questions

Cellice — Wed, 06 Apr 2016 20:16:44 GMT

Sorry I sent you the one that check if they already sent you an offer. Use this one https://ane.capitalone.com/landing?PFFSRCID=S-C1-12345678901-AHP-0001&referrer_id=SC-Visitor-NOTFOUND&external_id=COAF_BAU

Re: Auto refinance questions

Anonymous — Wed, 06 Apr 2016 20:59:59 GMT

Okay so I did that (it doesnt run as an inquiry does it?)

They have me "pre qualified" for a loan of 15,840$ with an APR range of 6.49%-17.41%.

Re: Auto refinance questions

Cellice — Wed, 06 Apr 2016 22:19:40 GMT

After you get the prequalify you can tell them you plan to refince, enter the vin and term etc. It will give you a more definitive APR.

Re: Auto refinance questions

Anonymous — Thu, 07 Apr 2016 00:28:43 GMT

How would I do that? The only thing I can manage to find is looking at different vehicles lol.

My refinance would be 19,000 - which is above what they have a "pre qualification" for too

Re: Auto refinance questions

Cellice — Thu, 07 Apr 2016 14:40:28 GMT

I'd say give them a call. I used the prequalify website last month and cant get back in for some reason now so I cant tell you exactly where to go. I know I was able to enter a vin and play with the terms and it showed me the payment and the interest rate.

Re: Auto refinance questions

Anonymous — Thu, 07 Apr 2016 18:55:44 GMT

(I purchased GAP, in addition to a maintenance package for employee pricing which I regret).

I would cancel the maintenance agreement ASAP. Although your F&I guy might get a little pissed when his commission gets charged back for that...

Re: Auto refinance questions

Cellice — Thu, 07 Apr 2016 19:10:32 GMT

@Anonymous wrote:
(I purchased GAP, in addition to a maintenance package for employee pricing which I regret).

I would cancel the maintenance agreement ASAP. Although your F&I guy might get a little pissed when his commission gets charged back for that...

Well he shouldnt get mad when he fed over a coworker.

Re: Auto refinance questions

Anonymous — Fri, 08 Apr 2016 18:13:58 GMT

I'm thinking I'll cancel the maintenance one, but GAP is important.

Maybe you guys have an idea on this - I have 1 collection on my account. I used the 'direct dispute' thing on creditkarma but it's taking awhile. Do I let that finish up and hope it works or do I go ahead and contact the agency and ask them to verify/ask to do a pay for delete? Thankfully it's a small 110$ collection but I would really like to get that off.

If I did, how different would my chances be at a better APR if that goes off and bumps me up? Is it worth waiting or is the difference minor enough that I should try to refinance asap?

Re: Auto refinance questions

Chris679 — Mon, 11 Apr 2016 11:13:10 GMT

Here's my advice:

Step 1: Refinance now to start saving right away

Step 2: Work on improving your credit so you can refinance again in six months with the goal being 5% or below at that point

Step 3: Start looking for a new job at a dealership where they don't let their 19 yr old coworkers buy $18000 cars @ 21% apr then upsell them on the maintenance packages.

Re: Auto refinance questions

Cellice — Mon, 11 Apr 2016 15:32:48 GMT

@Chris679 wrote:
Here's my advice:

Step 1: Refinance now to start saving right away

Step 2: Work on improving your credit so you can refinance again in six months with the goal being 5% or below at that point

@Anonymous 3: Start looking for a new job at a dealership where they don't let their 19 yr old coworkers buy $18000 cars @ 21% apr then upsell them on the maintenance packages.

Yes! I 100% agree with Step 3. I realize dealerships take advantage of customers, but doing that to your own employees is just disgusting.

Re: Auto refinance questions

jim44 — Mon, 11 Apr 2016 16:16:38 GMT

@Chris679 wrote:
Here's my advice:

Step 1: Refinance now to start saving right away

Step 2: Work on improving your credit so you can refinance again in six months with the goal being 5% or below at that point

@Anonymous 3: Start looking for a new job at a dealership where they don't let their 19 yr old coworkers buy $18000 cars @ 21% apr then upsell them on the maintenance packages.

Good advice on step 1 and 2. Isn't the purpose of this forum to provide credit and financial advice to others based on our credit experiences and not to give employment advice by questioning the OPs working environment.