Captive Lender ?

[Anonymous]

I applied at Nissan (NMAC) and Ford Credit on-line trying to get a pre-approval on my own. Got denied by both. Is it easier with captives to get approved at the dealer or it does not matter. 

[bigpoppa09]

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@Anonymous wrote:

I applied at Nissan (NMAC) and Ford Credit on-line trying to get a pre-approval on my own. Got denied by both. Is it easier with captives to get approved at the dealer or it does not matter. 

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It would help if we knew your stats credit scores do u have auto loan history how much was the car u were trying to buy do u have a down payment? NMAC and Ford are not hard to get credit with.

[Anonymous]

Scores are 562 Equifax. 577 Experian. Rolling in about 4k neg equity. Looking at new Focus,Sentra, maybe Versa. Auto history is long has no baddies. DP 1k. Income 120K with wife, mine is 75k. Have approvals with Springboard, Cap One @ 14% Car with neg equity I am trading is with Santander @18%, car I am keeping with Chrysler Cap @8.10% when my score was 517 2 years ago. Got approved by Chrysler cap again just want to try different captive lender if possible.

[JGGM]

From a purely FICO score-minded point of view, I will tell you if you apply at a dealership and the captive lender denies you, they will almost certainly shotgun it out to other lenders (resulting in possibly 10 or more inquiries). I know this - it's  what I do for a living. Kind of surprised NMAC didn't pick it up. I have seen GM Financial do some loans with your scores and less income on a new Cruze and Malibu lately because both these cars have great rebates. 

On the other hand, you may have a better shot at approval through a dealership using the captive lender because a dealer can structure the deal to look better than it is - for example over allow on your trade in so you don't look as upside down. Personally, I don't think it's a good idea to roll negative equity into a new loan, but I can honestly say it happens majority of the time, in my experience. If, at the end of the day, you don't care so much about inquiries and just need a new car, then either going thru a credit union or dealership may be your best bet. Best of luck!

[sccredit]

IMO you'll have much better odds through the dealership F&I department.  

[Anonymous]

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@sccredit wrote:

IMO you'll have much better odds through the dealership F&I department.  

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@Anonymous Financial approved me on-line. I think Nissan denied me because I only listed my income and didn't include my wife's under other income which I overlooked. Ford denial actually said see your dealership about FMC options just couln't approve me on-line. Kia was pending then denied; told me to see dealer for non KMF options. Basically just trying to get into a new car @ under 10% rate. I was able to it with worse scores 2 and a half years ago.  

[sccredit]

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@Anonymous wrote:

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@sccredit wrote:

IMO you'll have much better odds through the dealership F&I department.  

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@Anonymous Financial approved me on-line. I think Nissan denied me because I only listed my income and didn't include my wife's under other income which I overlooked. Ford denial actually said see your dealership about FMC options just couln't approve me on-line. Kia was pending then denied; told me to see dealer for non KMF options. Basically just trying to get into a new car @ under 10% rate. I was able to it with worse scores 2 and a half years ago.  

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I don't think you will be able to do it online.  Pick the car you want and go to the dealership.  It sucks but that, in my opinion and experience, is the only way it will happen.  

[Anonymous]

The negative equity and low scores is going to hurt you -- dealership can get you approved but you're not going to get a decent rate which means if you don't make double payments early on, you'll end up with $8000 in negative equity if you're not careful.

Typically for 580 FICO scores, you need 20% down (80% LTV) to get a much better interest rate from captive financing.  Almost all dealerships can approve low FICO scores with a hefty down payment at a reasonable interest rate, but for negative equity and a low score, the risk is too high.  

The last data I saw for subprime auto loans (October) was they were offering 12-13% for new cars and 17-19% for used cars with around 120% LTV.  No idea what car you're looking for but if you roll $4000 negative equity into a $25,000 car, your LTV will be 116%.  New car might be smarter even if it's a smaller/cheaper/less luxurious model because the interest difference is huge:

• New car, $25,000, loan for $29,000 at 13% over 6 years = $660/month = $18,520 interest paid
• Used card, $25,000, loan for $29,000 at 19% over 6 years = $752/months = $25,144 interest paid

So I'd definitely go look for the least expensive new car you can find versus a "nicer" used car.  The difference is significant.

[marty56]

Worst case is you could refi later if you can raise your scores enough so a local CU would do it.

[Anonymous]

@Anonymous a car with incentives; Sentra S, Focus SE, Cruze. My other loan is with Chrysler @ 8.10 when my score was 517, rolled in 4K and dp of 1k on that one, financed 22900 on MSRP of 24,400. Figure worst case if the others only approve me at 13-17%; then I can go back to Chrysler and see if I can get same or lower rate with simlar LTV. 

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@marty56 wrote:

Worst case is you could refi later if you can raise your scores enough so a local CU would do it.

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That may be tough to do for a couple of years due to LTV. 

Appreciate all the input.