Cap 1 auto navigator - First time financing questions

[Anonymous]

Hello,

Looking to finance my first car, and had some questions. 

Some info:

- I did the soft pull prequalification with cap 1 auto navigator. Got approved for up to 44k, although I'm looking for cars 25k and under. 

- Fico 8's: EQ: 694. TU: 754. EX: 674.

- I plan about a 4k down payment cash.

- The APR's they are showing when window shopping with my Cap1 prequalification seems to typically be between 3.5% - 4.38%.

- I have 1 collection account that reports to EQ and EX. Original debt is from 2016. So 5 years old. But sold to a CA last year. It is for an old tmobile bill and it is $370. I have low utilization on my credit cards because I practice AZEO. I only have one card reporting a balance, and the monthly minimum is $25.

Questions:

1. How accurate are these prequalification numbers? 

2. If indeed they ARE fairly accurate numbers, are the APR's they are quoting me (3.5% - 4.38%) decent?

3. I've lurked on here and people say Cap1 pulls all 3 credit bureaus. Is that true? And which model? Do they use middle score?

4. On the prequalification letter, there is a section that says items to bring to the dealer. It says to bring drivers license and proof of insurance. I'm assuming the prequalification was able to verify my income through The Work Number and that's why they aren't saying to bring proof of income. Am I assuming right?

5. I have consistent work history. I think they go back 2 years? No gaps. HOWEVER, I just started my current employment in May of this year. Will that be a red flag?

6. Will my collection account be a red flag? Will it affect my DTI? Even if I pay the $370, it will still be on my report, is it worth paying before I get a car?

Thank you in advance! 😊

[jcooks]

I purchased my current car back in 2016 with Cap One for a brand new car.  I had horrible credit and was approved with a co-signer for 6.6%.  Just recently my GF and my parents lost their vehicles during Hurricane Ida here in NJ due to flooding.  I helped them both find financing and a vehicle.  My GF got a 2017 Lexus RX350 with a 2.65% APR with a fico score of around 800.  My parents are retired (shared a vehicle) and we decided I had better rates than my father.  I got Penfed to approve me at the lowest rates with a ~760 score for a brand new vehicle.  For 72 months, their APR is 2.39% APR.  I could have gotten much less, but with the markup of vehicles due to the chip shortage, they wanted to maintain a certain payment per month that they were comfortable with.

I don't quite remember which CR they pulled as mine was done about 6 years ago and my GF doesn't even care as she's simple with her credit.  

If you are not in a time crunch to get a vehicle immediately, getting your scores higher would definitely get better rates.  I would recommend paying it off and letting it report as paid off and it should help your scores.  Might be very minimal affect on the rates that you've gotten and may take some time to reflect.

My recommendation with buying a used vehicle with Cap One, don't think you have to settle for the price listed.  For my GF's used Lexus, the dealer had it listed for 33.5k plus taxes and fees, I called them and asked if they could do it for 34k out the door paying cash (as essentially you have your own financing).  They agreed and we went down to see the vehicle.  There were issues with all 4 rims dinged up BADLY.  Also, there were some body issues that we knocked down the price of the vehicle to be about 33K along with them refinishing all 4 rims.  All parties were happy (except my GF went to pick up the vehicle last night and they gave her the vehicle nice and cleaned but with 1/4 tank of gas after promising a full tank).  Quickly resolved, but she's a stickler for the little things.

As for the process, you just need the reference number to your pre-approval and get the price as low as you can.  Once you agree upon a price, just plug in those figures in the navigator and it will tell you your exact payment per month.  Since I wasn't familiar with the dealer fees, etc, I just went to Other Adjustments and I put Tax, Title & License as $0 and put the OTD price to 34k and clicked save.  I just wanted to know the total that I would finance as it doesn't matter how much goes to either the vehicle itself, registration, tax, etc.  And that gave me a baseline and just haggled with OTD pricing.  Once the figures are to your liking, sign the paperwork and give them the Reference number.  Make sure that you're shopping with a dealer that is listed on the Capital One Auto Navigator website.  Not all dealers deal with them.  I also made sure to tell the dealers to not shotgun her credit and just strictly use Cap One.  Some dealers may shotgun your credit to try to match the rate to get more in their pockets.  

[4sallypat]

1. How accurate are these prequalification numbers? 

Yes, the total amount and interest range is fairly accurate - final numbers depends on the dealer you choose.

Different dealers participating with Cap 1 Auto Navigator sets their own numbers depending on your down, credit profile, and range of rates they can assign to you.

2. If indeed they ARE fairly accurate numbers, are the APR's they are quoting me (3.5% - 4.38%) decent?

Rates will be determined when you have the dealer pull your credit (HP) and if you insist on Cap 1, then they will have to give you an accurate rate thru them (dealer can't mark up rate).  Any other lender the dealer pulls for you to make them more profit you will end up paying more (interest rate add on) by the dealer so beware.

Rates seem to be good for what you were quoted and your profile.

3. I've lurked on here and people say Cap1 pulls all 3 credit bureaus. Is that true? And which model? Do they use middle score?

When you go into the dealer, for Cap 1 they will do an all 3 bureau pull. Unfreeze/unlock your 3 CRA before you go to the dealer.

4. On the prequalification letter, there is a section that says items to bring to the dealer. It says to bring drivers license and proof of insurance. I'm assuming the prequalification was able to verify my income through The Work Number and that's why they aren't saying to bring proof of income. Am I assuming right?

Proof of income isn't necessary as your credit reports will indicate your employment.

5. I have consistent work history. I think they go back 2 years? No gaps. HOWEVER, I just started my current employment in May of this year. Will that be a red flag?

Again, proof of income or work history is not needed for a car loan.  Car loans are secured instruments so banks tend to approve as long as your credit profile shows your work history.

6. Will my collection account be a red flag? Will it affect my DTI? Even if I pay the $370, it will still be on my report, is it worth paying before I get a car?

Your rate may be on the higher side when the dealer pulls your credit and submits it to Cap 1.

Paying off before you get the car only makes sense if you wait 30-60 days for it to report.

Otherwise, just leave it alone if you are getting the car now.

[Anonymous]

Intersting thing just happened with Cap One Auto Navigator. I was approved for $55K but it had expired. I reapplied and was denied even thought my score are now higher than when I first applied. Not sure what happened.

[Loquat]

@Anonymous It happens that way sometimes.  It could be that CapOne has changed their underwriting criteria and for some reason you're not meeting the new requirements.  This is just a guess but it would be something similar or something completely different.  Have you given any thoughts to credit union financing?

[Anonymous]

I received a letter from Capital One stating that "There are too many new installment accounts" as the reason why I was denied pre-qualification.  I recently leased a new Volvo XC90 to replace an exisiting lease so and that was the only "new" installment account.

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@Loquat wrote:

@Anonymous It happens that way sometimes.  It could be that CapOne has changed their underwriting criteria and for some reason you're not meeting the new requirements.  This is just a guess but it would be something similar or something completely different.  Have you given any thoughts to credit union financing?

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