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Auto loan approval odds and tips?

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xcv
Valued Member

Auto loan approval odds and tips?

I got surprised with an allocation for a car I've been waiting for, but it's coming in January, a month earlier than anticipated. The car is an MY2023, priced at MSRP ($36.5k) and is $40.6k OTD. So far I have a $1k down payment (the deposit I paid).

 

  • Income: $130k Base + $25k Stocks
  • DTI: 12% (Base Income)
  • Fico 8: 659 EQ, 676 TU, 648 EX
  • Fico Auto 8: 628 EQ, 650 TU, 611 EX
  • Credit Card Debt: $0 ($1,800 total limit)
  • Personal Loans: $3,700 (initially $5,300)
    • Will be paid off before loan, but unlikely it'll be updated before I do loan apps.
  • Student Loan Debt: < $30k
  • Past Car Loans:
    • Chase, paid off w/ 1 30 day late
    • Capital One, paid off w/o lates
    • Carmax, paid off w/o lates

 

I do have some baddies due to some life events:

  • 1x 30-day late payment w/ Chase Auto in 4/22
  • 2x 30-day lates w/ Personal Loan in 5/22 and 8/22
  • 3x30, 1x60, 1x90-day late with Capital One in 2019, but no more lates until I closed the account in mid 2022.
  • 1 CC Chargeoff & 1 VZW Chargeoff from 2017, Paid in Full

 

I'm currently trying to goodwill the accounts but haven't heard back yet.

 

A local CU and PenFed approved me in December of 2021. Chase/Subaru approved me for a similar amount then too when my scores were hovering at the low 600s, but their prequal denied me this time (no surprise). Capital One pre-qualified me for $60k back in October when my credit was objectively worse and debts higher. I plan on trying to go through my local credit unions and PenFed/NFCU among others, I just needed a baseline. My credit card pre-approvals and Discover CLIs have gotten somewhat worse since then so I'm not sure of my odds now.

 

Will I have any problems and is there anything should I expect or do going into the next month?

 

7 REPLIES 7
Shooting-For-800
Senior Contributor

Re: Auto loan approval odds and tips?

You should be ok if the car deal is a good deal.

I would save up the cash instead of paying off the personal loan in case you need it for the down payment for better terms.

You can always pay the personal loan off after t you get the car if you did not need the cash for the down payment.

GL!

 

Rebuild started in 2014  -  $100k unsecured credit in 2017  -  $500k unsecured credit in 2024.

DON'T WORK FOR CREDIT CARDS ... MAKE CREDIT CARDS WORK FOR YOU!



Message 2 of 8
xcv
Valued Member

Re: Auto loan approval odds and tips?


@Shooting-For-800 wrote:

You should be ok if the car deal is a good deal.

I would save up the cash instead of paying off the personal loan in case you need it for the down payment for better terms.

You can always pay the personal loan off after t you get the car if you did not need the cash for the down payment.

GL!

 


Luckily the dealer only had an $800 add-on after the fact but I can probably negotiate that away if I offer to finance with them, I just want to make sure that I can get offers before going in.

 

An extra down payment isn't really an issue within reason. As for the personal loan, I wanted to get it down as previously 2 months ago I got rejected during pre-quals for various things due to "too many accounts with high utilization" as I had I had 2 loans (including this one) that weren't paid off enough. So I paid off one and wanted to just eliminate the other to hopefully improve my chances, but I might let it sit though until after I apply as loans in general seem to delay final reporting.

Message 3 of 8
SweetCreditObsession
Valued Contributor

Re: Auto loan approval odds and tips?


@xcv wrote:

@Shooting-For-800 wrote:

You should be ok if the car deal is a good deal.

I would save up the cash instead of paying off the personal loan in case you need it for the down payment for better terms.

You can always pay the personal loan off after t you get the car if you did not need the cash for the down payment.

GL!

 


Luckily the dealer only had an $800 add-on after the fact but I can probably negotiate that away if I offer to finance with them, I just want to make sure that I can get offers before going in.

 

An extra down payment isn't really an issue within reason. As for the personal loan, I wanted to get it down as previously 2 months ago I got rejected during pre-quals for various things due to "too many accounts with high utilization" as I had I had 2 loans (including this one) that weren't paid off enough. So I paid off one and wanted to just eliminate the other to hopefully improve my chances, but I might let it sit though until after I apply as loans in general seem to delay final reporting.


 

The only way you might want to do to the existing loan is to pay it down to less than 9%. This could result in a slight score increase. If you pay off the loan, you could take a temporary score hit.  You don't want to cause any score drops prior to getting your new auto loan.

 

Best wishes!



(+102) | (+106) | (+151)
| TU Fico 9: ? | Exp Fico 9: ? | EQ Fico 9: ?| EQ Fico 8 Bankcard: TBA

Initial Goal: Min. 740 w/all CRAs - Met
Interim Goal: 780 w/all CRAs - Met
Current Goal(s): Min. 800 w/all CRAs
Gardening Until: ??/??/202?| Last App: 10/20/2023





Message 4 of 8
xcv
Valued Member

Re: Auto loan approval odds and tips?


@SweetCreditObsession wrote:

@xcv wrote:

@Shooting-For-800 wrote:

You should be ok if the car deal is a good deal.

I would save up the cash instead of paying off the personal loan in case you need it for the down payment for better terms.

You can always pay the personal loan off after t you get the car if you did not need the cash for the down payment.

GL!

 


Luckily the dealer only had an $800 add-on after the fact but I can probably negotiate that away if I offer to finance with them, I just want to make sure that I can get offers before going in.

 

An extra down payment isn't really an issue within reason. As for the personal loan, I wanted to get it down as previously 2 months ago I got rejected during pre-quals for various things due to "too many accounts with high utilization" as I had I had 2 loans (including this one) that weren't paid off enough. So I paid off one and wanted to just eliminate the other to hopefully improve my chances, but I might let it sit though until after I apply as loans in general seem to delay final reporting.


 

The only way you might want to do to the existing loan is to pay it down to less than 9%. This could result in a slight score increase. If you pay off the loan, you could take a temporary score hit.  You don't want to cause any score drops prior to getting your new auto loan.

 

Best wishes!


Yes that's what I decided to do instead after seeing that 9.1% rule, I'll get it down to 5%.

 

On top of that Capital One called me today and told me they're removing a 30, 60, and 90 from 2019 so that's some good news too. 

Message 5 of 8
SweetCreditObsession
Valued Contributor

Re: Auto loan approval odds and tips?

That's EXCELLENT news! Hopefully you'll see a score increase from the removal of those baddies. Please keep us posted!Cat Surprised



(+102) | (+106) | (+151)
| TU Fico 9: ? | Exp Fico 9: ? | EQ Fico 9: ?| EQ Fico 8 Bankcard: TBA

Initial Goal: Min. 740 w/all CRAs - Met
Interim Goal: 780 w/all CRAs - Met
Current Goal(s): Min. 800 w/all CRAs
Gardening Until: ??/??/202?| Last App: 10/20/2023





Message 6 of 8
xcv
Valued Member

Re: Auto loan approval odds and tips?


@SweetCreditObsession wrote:

That's EXCELLENT news! Hopefully you'll see a score increase from the removal of those baddies. Please keep us posted!Cat Surprised


Right! They initially called back and said they couldn't approve it because I didn't give specific months, so I gave them specific months and they approved it. Part of me thinks I should've just stretched the time frame to get an extra 30 day taken off but it's whatever. It's been over 2 years since it anyway and I figured the 60 and 90 were a bigger deal to get removed ultimately.

Message 7 of 8
xcv
Valued Member

Re: Auto loan approval odds and tips?

So I ended up clearing out my personal loans, and paid the $5,300 one down to $300 for 5% utilization on that. I also got my credit card utilization into the 3% range. As a result, my scores were:

 

Fico Score 8:

EQ - 683

TU - 697

EX - 670

 

Fico Auto Score 8:

EQ - 653

TU - 671

EX - 632

 

The car I wanted was $40,668 out the door, $700 markup ($36,611 MSRP). I put $1k down. So the financed amount ended up being $39,668. Unfortunately the car is a limited edition for this year above the standard trims, so the banks weren't able to verify the VIN. So they ended up basing the loan off of the lower trim at $31k. Only Alliant CU said they'd adjust loan terms after getting the window sticker.

 

Banks I applied to:

  • Navy Federal: 9.04%, full ask, 72 months.
  • Alliant CU: 10%, full MSRP, 72 months, requires TTL down payment.
  • Chase: 11.89%, full ask, 72 months.
  • Capital One: Approved for up to $55k but no clear terms since the car isn't on the site.
  • Georgia's Own: Approved it looks like, but no further info until Tuesday.
  • Digital FCU: No info.
  • PenFed: Declined
  • Delta CCU: Declined

I'm somewhat disappointed by the 9% lowest APR offer, but I'll be paying this loan off in around 7-8 months so APR is no huge killer (unless this recession actually hits... haha). I'm just glad I got approved.

 

I spoke with the dealer finance department, and they'll try to get me financed with Toyota or a competing bank, and asked me to send the NFCU docs so they could try using that as leverage for a lower APR. I'm not holding out though.

 

Message 8 of 8
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