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Big APR difference with Capital One and Carvana?

nhlbluesgirl
Valued Member

Big APR difference with Capital One and Carvana?

Is there always a large difference between pre-approval rates with Capital One and Carvana? My scores aren't the best (581, 582, 615 for Auto 8). I got pre-approval with Capital One for $51,000 (average APR around 10%). With Carvana, the average APR at the cars I looked at was almost 20%. That's a huge difference! I currently have a car loan with Cap. One, so maybe that's why?  What am I likely to get at a dealship?

5 REPLIES 5
Shooting-For-800
Senior Contributor

Re: Big APR difference with Capital One and Carvana?

Cap One can offer great rates...

 

I got 2.49% for 72 months a few years ago.

 

The better the car deal, the better the rate also...

Rebuild started in 2014  -  $100k unsecured credit in 2017  -  $400k unsecured credit in 2021.

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

5% Rotating - Discover                         5%-20% - Amazon & Lowes                   3-6% Groceries - NFCU & Amex Preferred
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Message 2 of 6
4sallypat
Frequent Contributor

Re: Big APR difference with Capital One and Carvana?

It's called "dealer markup" - I have noticed the same when I was looking for a used car for my new teen driver.

 

Cap 1 is usually very straightforward in quoting rates which you can take to a dealer and have them honor it without any addon rates.

 

Carvana, Vroom and Shift are all "internet dealers" just like any other car dealer and have the ability to mark up or add on additional interest rates.

 

If you have a CU relationship, I'd get my "real" rate thru them to compare.  And if the CU rate is better, I'd take that pre-approval instead of having a dealer run my credit X number of times thru their banks....

 

 

Message 3 of 6
incognitony
Regular Contributor

Re: Big APR difference with Capital One and Carvana?

Plus Carvana owns the finance company.

Message 4 of 6
Loquat
Moderator

Re: Big APR difference with Capital One and Carvana?

Most lenders cap markup to about 3% over buy rate. There are many states that also set a cap that loans can be marked up.
Message 5 of 6
FMC
Frequent Contributor

Re: Big APR difference with Capital One and Carvana?

Carvana has loan shark int rates. 

Message 6 of 6
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