Captive Financing Question

[NeedinHelp42]

I'm curious what folks are seeing with captive financing in this environment, particularly on domestic trucks?

Our family hit a really bad patch about 6-7 years ago. My wife lost her job and then had to care for a sick parent so we were down about 50% of our income and definitely hadn't structured our life to take that hit. Instead of declaring bankruptcy we fought our way out (Not sure I'd do that again, but here we are). Though we were struggling, we needed to do some things with our auto situation due to kids and jobs and falling apart cars so we ate some bad deals in the name of taking away some reliability worry. A Honda Pilot and CRV-bought same time at the same dealer w/ a 15% and 16% interest rate respectively.

Fast forward to today and we are on solid ground-paid down a ton of debt, built up an emergency fund, etc. We are flat or a little ahead on both vehicles, which is less than ideal on 7-year old cars at those rates, but I am trying to figure out what to do going forward. I am going to try to refinance the CRV, which my wife likes and wants to keep driving at least a few more years, but with one kid off to college, we no longer need the Pilot.

My scores are all 630-640 range and income is 185k. Reports show DTI at 11%. Realistically, it's probably more like 20% because we rent. Just to get a sense I did the pre-qualify for Chrysler Capital and got $57,600 (no APR) and up to $35k with Capital One, showing 6% to 8% APR on most new stuff. 

My question is two-fold. Are we seeing dealers panic yet on 2020 cars and trucks enough to loosen up financing requirements on new stuff? And if so, any chance I qualify for 0% interest or special financing rates without putting down a big chunk of change? Mostly I'm trying to get a sense of what to expect before I pull the trigger on any hard pulls. Or, maybe we'll just refinance both cars and keep working on scores?Thanks in advance for any advice.

[sccredit]

Quite the opposite. Because factories were shut down during the pandemic there are lower than normal inventories. I'm seeing truck prices higher than I have in a very long time. However, the manufacturers are pushing subvented financing like never before. Auto lending standards as a whole have tightened recently. Are your auto scores higher than your traditional FICO's?

[NeedinHelp42]

Interesting, and good to know. Thanks.

Re: Auto Ficos, it's actually the opposite, 560-590 range. As we worked our way back there are a handful of 30-day lates. I think the last just hit 2 years. Also, we let a leased car go via repo 6+ years ago. That hits 7 years in March.

[sccredit]

IMO your better off going in with credit union financing, especially if someone like DCU doesn't pull an auto-enhanced score.

[nycsimone]

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@NeedinHelp42 wrote:

Interesting, and good to know. Thanks.

Re: Auto Ficos, it's actually the opposite, 560-590 range. As we worked our way back there are a handful of 30-day lates. I think the last just hit 2 years. Also, we let a leased car go via repo 6+ years ago. That hits 7 years in March.

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Baddies fall off at the 7 year mark from the first reported delinquency. You may be better off hanging on until next spring and then pulling the trigger. The perior around Memorial day is known to be a good time to buy a new vehicle anyways. At that point you should see your score increase another 20-30 points easily. Also if you have any credit cards get them to under 10% usage.

[Anonymous]

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@nycsimone wrote:

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@NeedinHelp42 wrote:

Interesting, and good to know. Thanks.

Re: Auto Ficos, it's actually the opposite, 560-590 range. As we worked our way back there are a handful of 30-day lates. I think the last just hit 2 years. Also, we let a leased car go via repo 6+ years ago. That hits 7 years in March.

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Baddies fall off at the 7 year mark from the first reported delinquency. You may be better off hanging on until next spring and then pulling the trigger. The perior around Memorial day is known to be a good time to buy a new vehicle anyways. At that point you should see your score increase another 20-30 points easily. Also if you have any credit cards get them to under 10% usage.

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+1 i would absolutely wait til thise baddies drop iff and hopefully you see some nice score gains.

If you pull your credit reports from annual credit report, they will spell out when they fall off. It is free (no scores) and you can even pull them weekly through 4/2021.

TU will list "estimated date of removal"

EX will list "on record until"

And EQ will have #"date of first delinquency". Add 7 years to that and that is when they should fall off.

If you are in a bit more of a rush, you could look into early exclusion (EE) with TU and EX if the baddies are due to drop off in the next 6 months.

Good luck!