Best Auto Loan Rates? DCU, NASA FCU, CapOne, Other CU?

[Anonymous]

Hi everyone,

I am planning to get an Auto Loan next summer '17. 

Does anyone have any suggestions as to which company I should start a relationship with the intention of applying for an auto loan in 7 months? And if so, should I opt for a savings, checkings, CC, or PLOC to start the relationship? If it helps, baddies include 2 CC chargeoffs (paid, closed, $0), 1 REPO, and 1 LOC chargeoff, all 3 years old (s/p divorce). Current cards and limits are in my sig

Will be considering $10k for a Used Toyota Prius if that matters

Thanks for any help  

[Dalmus]

The repo will probably be the biggest factor in what kind of loan you'd qualify for.  Lenders care more abotu how you paid back previous auto loans than almost anything else (within reason, of course).

How much are you looking to provide in cash yourself?  The more you provide, the better a lender will like you.

CapOne is fairly lenient, and they even have a prequalification tool on their website.  Sometimes they'll only cover 80 or 90% of the value of the vehicle, though.

[Anonymous]

---

@Dalmus wrote:

The repo will probably be the biggest factor in what kind of loan you'd qualify for.  Lenders care more abotu how you paid back previous auto loans than almost anything else (within reason, of course).

How much are you looking to provide in cash yourself?  The more you provide, the better a lender will like you.

CapOne is fairly lenient, and they even have a prequalification tool on their website.  Sometimes they'll only cover 80 or 90% of the value of the vehicle, though.

---

Thanks for the reply. Yeah that repo is a bad stain on my report (ex took the car and stopped paying, didn't find out until 1yr after).

I'm planning to put $2,000 down at the time. So I guess the total loan would be around $10,000 (including the 13% for tax, title, fees?

I did do some reading about CapOne, If I were to check my prequalification would that affect me if I didn't act on it right now? And any thoughts about joining a company that would appreciate 6 months of history before potentially apping for an auto loan with them?

Thanks a lot for your help

[Dalmus]

 Capital One (the only online lender I've ever done a car loan with) generally doesn't care if you're currently a customer or not.  When I refianaced my car loan through them, I didn't have a credit card or anything with them.  The only downside of CapOne Auto is that they want you to work with "preferred dealers."  Which, is MOST dealers out there, but something to be aware of.

 If I remember correctly, if you complete the prequal process (which includes some verifcation after the online portion), the prequal is good for 45 days.

 There's a thread in the Credit Cards forum where a car salesman is answering questions.  I think $2K down on a $12K car is a good amount (more is better, as always), but maybe you can ask the question there?

 13% tax?  Ouch!  And I always complain that my sales tax here in Milwaukee is high at 5.6%!

[iced]

I found DCU's rates to be reasonable, but I should warn that I think their rates may be going up. I used to get spammed by them all the time for a 1.74% pre-approval but now it's 2.49% preapproval (the amount they're offering pre-approved has gone up, however). Even then, the rates were about the best I found outside of manufacturer promotional APRs.

I haven't interacted with any other CUs but it can provide a good baseline reference in your search. You can also check the auto approval thread to see what rates people are getting from various places and build out your own matrix. Of course, score will impact things so I would look for approvals that stated a score in the 650 ballpark for your case.

[surferchris]

---

@iced wrote:

I found DCU's rates to be reasonable, but I should warn that I think their rates may be going up. I used to get spammed by them all the time for a 1.74% pre-approval but now it's 2.49% preapproval (the amount they're offering pre-approved has gone up, however). Even then, the rates were about the best I found outside of manufacturer promotional APRs.

I haven't interacted with any other CUs but it can provide a good baseline reference in your search. You can also check the auto approval thread to see what rates people are getting from various places and build out your own matrix. Of course, score will impact things so I would look for approvals that stated a score in the 650 ballpark for your case.

---

Agreed.  I would definitely look into joining a credit union.  They can give you an idea of what you need to do to get approved ahead of time.

[pipeguy]

I currently have 2 loans with DCU, 1 year old "used car" settled 12/31/14 @ 1.49% and a new car settled 2/10/16 at 1.74%, the difference being the .25 percent "baseline" fed rate that changed earlier this year. Federal Reserve is strongly leaning towards another increase in December 2016 which will probably be another 1/4 point (.25%) so you can expect credit card and auto loan rates to go up another .25%. 

I should mention that DCU's best rates are dependant on having a direct deposit set up (free checking or savings) which does not have to be your complete paycheck, probably could use an auto monthly tansfer to qualify. I get paid once a month, my wife bi-weekly (26 times a year) about 75% of her check is direct deposited into DCU - none of my primary or secondary income is direct deposited to DCU, yet we qualify for their best rates based on direct deposit. 

You should check with DCU as far as interest rates because you scores are well below their top-tier lowest rates, which if I remember correctly are Fico 5 Equifax rates - in my case are 50 points or so below my Fico 8 Equifax scores - it's either 730 or 740 for their best rate, slightly more for the next tier 685-725 (est range). 

Most credit unions will allow you to apply for a loan or card and if "approved" then join - most will also give you a 4-6 week preapproval to allow you to shop for a vehicle. DCU is easy to deal with by phone or message, NASA is pretty worthless IMO, PenFed is good if you get in their good graces, NFCU seems to be well "loved" around here but I have no personal experience with them. Lots of different CU's out there - best option IMO is a CU over a bank or dedicated lender like Ford/Ally/Chrysler/Honda/etc, but sometimes manufacturers offer the best rates and open their loans to less than perfect credit to help move inventory. 

Anything you can do to improve your scores will help you a bunch in getting approved, and getting the best rates. My experience says start with CU's and in my case I'd start with DCU.  Keep in mind that even if you get a sub-par rate through say Cap-1, you can always refi with a CU in 6-12 months after your scores improve.