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Any help for a newbie to car financing.

New Member

Any help for a newbie to car financing.

So almost 3 years ago I got a car lease through GM financial. It was for a new 2017 equinox Lt. I knew nothing about credit and my score at the time was around 620. I had negative information on my account. My monthly lease payment was around 426$ a month. Lease is up in 3 months and it is time for a new car.

I think for 426$ a month for a 3 year 36000 mile lease for a equinox 2017 was a horrible deal at the time. Car value was around 27000$ at the time new. How bad did I mess up the first time? Also it was 426 after a GM employee discount code.

So fast forward to today. My fico 8 scores are 780, 793, and 791 respectively. I still have some balance on my cards that I plan to pay down which should get my utilization from 13% to around 0%. I have no negatives on my report anymore. All good standing accounts. My lease was payed on time for the last 3 years.

What type of rates should I be looking for now? I'm so scared of getting screwed, I have worked so hard on my credit the last three years and I finally have good credit. Any tips?
Credit Score:

AAoA: 3.5 years

# of positive trade lines: 9

# of negative trade lines: 0

Income: 68000

Lenght of Employment: 2.3 years

Previous Loan Experience: 36 month lease on time payments

Debt-to-Income (DTI):

Year of Car:2019 dodge charger 392


Purchase/Refinance: either msrp around 43000

Requested loan term (XX Months):60

Down payment amount:3000


Valued Contributor

Re: Any help for a newbie to car financing.

For the maximum number of available credit score points due to utilization you want 1 card to show a small balance and all other cards at a zero balance. That is assuming you have at least 3 cards. You also want less than 8.99% total revolving utilization, and less than 29% on any single cards utilization. Your scores right now are more than enough to receive the lowest interest rate. Usually the best rates are from credit unions. I received a 1.99% interest rate for 100% financing of a used vehicle. I think the interest rates have gone up since then, but that credit unions rates are still the lowest I ever see. You also need to be careful that the lender is not considered a consumer finance company. I learned the hard way that Honda Financial is considered a consumer finance company. The mere presence on a credit report of a consumer finance account is seen as a negative on some versions of fico scores, even if it has a perfect payment history. I have never understood why that is the case, but I know that it is the case.

TU fico08=822 06/28/20
EX fico08=819 07/04/20
EQ fico08=835 07/06/20
EX fico09=834 06/03/20
EQ fico bankcard08=858 06/23/20
TU Fico Bankcard 08=859 06/23/20
EQ NG1 fico=802 05/06/20
EQ Resilience index score=59 04/26/20
Message 2 of 5
Valued Contributor

Re: Any help for a newbie to car financing.

Everyone has a different opinion.   I check all three of my credit unions about current rates and use the CU with the best.   Have them pre-approve me for a loan amount, rate and loan term I want.   When I go shopping I know everything I need to know, and am ready to pull the trigger.   Some times I let the dealer shop for a better loan but have found that most of the time the dealers loan rates are not enough better to use the dealers financing.   Kia and Capital One have come back saving about 1/4% but those are only two time over about 12 cars.   Is 1/4% worth the extra HP's?  All of my CU's will pre-approve with soft pull, so I only take a hit if I buy a car.   If I let the dealer check I sometimes have a couple of HP's. 


PS:  Check CU's auto, personal and secured loans before joining.

I have a couple of CU's that are worthless except for borrowing money but when you need a loan they are nice.


FNBO 2% Cashback Visa (20k) / Bank of the West Cashback MC (20k) / US-Bank Cash+ (15k)
FNBO Travel Elite (15k) / Citi Double Cash (20k) / US Alliance 3% (20k)
Ficos : 830 / AAoA : 9 yrs / AoOA : 24 Yrs / AoYA : 0
Message 3 of 5

Re: Any help for a newbie to car financing.

I would highly recommend going over to the Leasehackr forum if you are looking at leasing. Lease rates can be different that finance rates. 

Message 4 of 5
Regular Contributor

Re: Any help for a newbie to car financing.

This is a piece of cake...


First of all, don't even worry about paying down your credit cards. Your debt-to-income will be fine and you're also in the highest tier possible being above 750 on all three bureaus... Secondly, when negotiating the price on your new vehicle, negotiate from invoice, not from MRSP... whether you're leasing or financing, dealers have something called "dealer cash" when they sell new vehicles... this can be used to essentially reduce the amount you're financing. Do some research into rebates, incentives, consumer cash, dealer cash, etc. on your new vehicle.


Dealerships also occasionally offer 'subveen rates' i.e. 0%, 1.99% through their captive (in this case Chrysler Capital)... ask about those first, if not don't take anything above 4-5% MAX. 

Current Score (01/13/2020): EXP: 680; TU: 684; EQ: 665
Gardening as of 01/13/2020

Community America CU Cash Rewards - $10000 | Discover It Cash Back - $4000
Nordstrom Credit Card - $4000 | BMO Harris Cash Back MasterCard - $4000
Discover It Cash Back - $2000 | US Bank Cash+ Visa Signature - $2000
Target Red - $1100 | Chase Starbucks Visa - $1000
Capital One Quicksilver - $700

Total Credit: $28800
Message 5 of 5
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