Best timing to apply for loan? Car is 6 weeks out.

[Luzzelda]

Hi all, 

I'm waiting for a 2023 Highland Hybrid - they're in high demand and production is backed up. After a month of negotiating, I put a deposit on one that had already been allocated to my dealer and is going into production early Feb.  ETA of arrival is early to mid-March. 

So my dilemma - NFCU says if I apply now, they'll guarantee the rate given for 3 mo. But I think most other places only guarantee for 30 days, and it's likely my car won't be ready by then.  Forbes is suggesting interest rates will go up again Feb 1st.  

Is it worth applying for credit prior to Feb 1st to try to lock in a lower rate? My FICO Auto 2 is 745 and FICO Auto 8 is 775.  I'm worried that if I apply now and the rate is meh, maybe the HP will affect the rate I'm offered next month.  My last HP was in Aug 2021 when I bought a house.  

[FLLGuy]

I can confirm Navy is solid will definitely hold your rate for 90 days after you apply.  If by 90 days you have no signed deal they'll just simply void.  

can i ask, what kind of deal did you get from Toyota?  Any incentives any details worth sharing?

[Luzzelda]

Didn't really get any incentives. They started off asking 9k$ over MSRP, so it was an uphill negotiation. Got them down to MSRP, with the add ons and color that I wanted. I was initially told 8-10 months to wait and had one dealership that refused to work with me, so this felt like a win. We haven't done financing yet but I'm not expecting anything crazy. 

I used NavyFed's car search to help bring their offer down, otherwise they let me walk when I tried to negotiate. 

[OniStringer]

I would say now is a good time. Navy Federal is pretty solid at upholding their guarantee. Definitely want to prepare before the vehicle comes so you aren't scrambling in my opinion and experience. 

[Horseshoez]

I purchased a fully tarted up TRD Sport Tacoma back in October; a week prior to the vehicle showing up at the dealership I looked into both PenFed and NFCU for a car loan and decided against both.  Why?  Because Toyota Finance was offering a rate roughly half of those two credit unions; in the end I opted for their 48-month 2.49% loan.  Yes, I know that rate isn't being offered any longer but my understanding 2.99% is still available to some buyers, and that is a point and a half lower than the best either of the credit unions offer.

[Luzzelda]

Congrats on the great rate and the cool new ride!  

I agree - my goal is to get the lowest interest rate as well.  My question is more about whether using a hard pull to try to get a low rate *before* the anticipated federal rate increase on February 1st is worth the risk of that pull dropping my score before a second hard pull at the dealer during pick up.  

I think I'll risk it.  Toyota's year end rate was 3.99% and I'm not looking at 48 mo to finance, so I doubt they'll be offering me a 3%.  If I don't, and end up with a rate over 4.5%, I'll be kicking myself 

[fury1995]

---

@Luzzelda wrote:

Congrats on the great rate and the cool new ride!  

I agree - my goal is to get the lowest interest rate as well.  My question is more about whether using a hard pull to try to get a low rate *before* the anticipated federal rate increase on February 1st is worth the risk of that pull dropping my score before a second hard pull at the dealer during pick up.  

I think I'll risk it.  Toyota's year end rate was 3.99% and I'm not looking at 48 mo to finance, so I doubt they'll be offering me a 3%.  If I don't, and end up with a rate over 4.5%, I'll be kicking myself 

---

You're coming up on 6 weeks! Is the car in yet? Also, how did the your auto loan application go?

We need an update! Rate, terms?

[Luzzelda]

I applied through NFCU and PennFed prior to the rate increase and was offered 61,000 at 5% and 5.5% (60 months). The car came in last week. Toyota pulled Equifax, got a 778 Fico-Auto and offered 5.99%.  They also offered 5000K trade in for my Subaru. They were pretty upfront that they usually can't beat NavyFed, but I'm glad I gave it a try to see the best offer. 

I went with NavyFed, sold the Subaru to CarMax for 8,000K and put it as a pay down to principal. The fed only increased by 0.25% so I'm not sure how much my interest rate actually would have changed if I'd waited, but it was good to walk in knowing I had a good offer for them to try to beat. 

[fury1995]

---

@Luzzelda wrote:

I applied through NFCU and PennFed prior to the rate increase and was offered 61,000 at 5% and 5.5% (60 months). The car came in last week. Toyota pulled Equifax, got a 778 Fico-Auto and offered 5.99%.  They also offered 5000K trade in for my Subaru. They were pretty upfront that they usually can't beat NavyFed, but I'm glad I gave it a try to see the best offer. 

I went with NavyFed, sold the Subaru to CarMax for 8,000K and put it as a pay down to principal. The fed only increased by 0.25% so I'm not sure how much my interest rate actually would have changed if I'd waited, but it was good to walk in knowing I had a good offer for them to try to beat. 

---

Congrats! You did well all the way around!

Navy FCU is still hard for dealers to match let alone beat and the same goes for Carmax purchase offers. Credit Unions typically are slower to react to the Fed rate changes than conventional lenders.

Carvana just started upping their offers as well to compete with Carmax (which is good news for consumers but may be terrible news for their stockholders as they nearly went bankrupt late last year doing the same.)