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Carvana Experiences. Interest rate, credit hit etc.

JayF1
Member

Carvana Experiences. Interest rate, credit hit etc.

My credit is kind of rough right now. 530s. I have decades of credit history.  By burrowing through posts at this most helpful website I learned that by taking out some secured cards, disputing some things and so forth I am confident that I can add 100-150 points to my score over the next six months to a year.  However right now both of our family cars are getting quite raggedy. I'm in the market for a small, late model SUV 13-19k in price. I know Carvana is subprime but I am needing a nicer car soon. I was "prequalified" for 20.x interest rate. They haven't completed a hard pull yet. I assume that is done when you order the car. Is my interest rate liable to go down then?  I can make the payments easily at the rate they are calculated but I wonder if they highball your interest in the soft-pull to cover themselves? I plan on refi within a year anyway but was curious. 

11 REPLIES 11
bigpoppa09
Established Contributor

Re: Carvana Experiences. Interest rate, credit hit etc.

Sorry to hear about your cars i would never take a auto loan at 20%  there is no gaurantee u will be able to refinance at 6 months or 1 year u will be way upside down because at that rate most of your payment is going to interest instead of principal.

Message 2 of 12
jeffm4688
Frequent Contributor

Re: Carvana Experiences. Interest rate, credit hit etc.

I'd be spending $1000-3000 cash money on a car and would never ever recommend someone take out a vehicle loan at 20%. If you can get your score up 100 points even you'd have a much better shot at sub 5% interest rates. I grabbed a 3.6% when I had a 619 so it is possible, might take some determination even then though.

FICO 12/2015 - EX 692 TU 685

FICO 10/2021 - EX 596 TU 605 EQ 600 - officially rebuilding.

What survived:
Amex HH - 1.5K | Amex Delta - 1K | Amex Bonvoy - 1.5K | Amex BRG - 3.5K | Amex BRG - 3.5K | Amex Business Cash- 2K | Amex Business Plus - 2K
Message 3 of 12
workingfor850
Valued Contributor

Re: Carvana Experiences. Interest rate, credit hit etc.

I was in your position a few years ago and was able to buy at a high interest and then rebuild and refinance 6 months later and a very competiive rate with a credit union.  They key to pulling that off was having 4k to put down on the car and buying a car that did not take a big depreciation hit and could be refinanced as new.  Many report here buying a car, getting a terrible subprime rate and not being able to get out of the loan and refinanced because they have too much negative equity.  I would strongly suggest being very careful in this situation.  My best advice is to work with the good folks in the rebuilding forum to get your scores up and hold off until you can qualifiy for a credit union auto loan.  If you can work a rebuild and hold off you can get a rate you can live with and save a ton of money in the process.  I would even reccomend renting a car for a couple of months over taking a 20% loan because the cost of that interest is crazy.  The loan I took was 12.57% and I refinanced it down to 4.29% it saved me 6k in interest over the life of the loan so well worth the rebuild.  Had I not put the 4k down I would not have been able to refinance BTW.

Message 4 of 12
fltireguy
Valued Contributor

Re: Carvana Experiences. Interest rate, credit hit etc.

Carvana isnt necessarily Subprime, Im seeing a 4.6% for me for a 72 month loan 

NFCU $60.4k/PenFed $22.5k/Commerce $15K/53 $11K/Synovus $14K/BBT $11K/CapOne $12K/DCU $7.5K/BMO $7.5K/Chase $14.5k/Cabelas $10K/ and many many more!
Total CL $398600, plus car and RV loan.
Ooh. Ooh. Getting closer to that $500K mark!
Message 5 of 12
DavioKanuri
Established Contributor

Re: Carvana Experiences. Interest rate, credit hit etc.

DON'T DO IT! I have had bad credit, the worst and have NEVER had a 20.x interest rate!
***FICO08 as of: Dec 19th 2017-EX: 731 | EQ: 727 | TU: 756***



Message 6 of 12
JayF1
Member

Re: Carvana Experiences. Interest rate, credit hit etc.


@workingfor850 wrote:

I was in your position a few years ago and was able to buy at a high interest and then rebuild and refinance 6 months later and a very competiive rate with a credit union.  They key to pulling that off was having 4k to put down on the car and buying a car that did not take a big depreciation hit and could be refinanced as new.  Many report here buying a car, getting a terrible subprime rate and not being able to get out of the loan and refinanced because they have too much negative equity.  I would strongly suggest being very careful in this situation.  My best advice is to work with the good folks in the rebuilding forum to get your scores up and hold off until you can qualifiy for a credit union auto loan.  If you can work a rebuild and hold off you can get a rate you can live with and save a ton of money in the process.  I would even reccomend renting a car for a couple of months over taking a 20% loan because the cost of that interest is crazy.  The loan I took was 12.57% and I refinanced it down to 4.29% it saved me 6k in interest over the life of the loan so well worth the rebuild.  Had I not put the 4k down I would not have been able to refinance BTW.


Yeah. Your experience seems close to what I'm facing.  I would be able to put 15-20% down. We live well below our means.. I could double the payment that I'd be facing with a high interest loan. I was just hoping more folks had experience with Carvana. Seems wierd that CapitalOne won't deal with them directly but I could finance through Carvana and immediately refinance with Cap1.  Or am I mistaken?

Message 7 of 12
tydawg
Valued Contributor

Re: Carvana Experiences. Interest rate, credit hit etc.

I remember Carvana has a been a topic of discussion for sometime due to the fact they offer rates based on Vantage 3.0, not sure but I believe some members have reported success with them. I would however caution you against buying a car with that interest rate, and if you absolutely must I would buy the cheapest car that they offer that will serve your needs, pay as much upfront, and refi ASAP!

Message 8 of 12

Re: Carvana Experiences. Interest rate, credit hit etc.

Carvana use to use Go Financial(bad company) but recently (this year) changed to Ally Financial. Your interest rate can change a lot with a little as a few points increase. I just found one of my dream cars and have a score they tell me at 653. APR 10.3. Capital One was telling me an APR of 12. I did just pay off $10k in credit cards but that won't show up until middle of next month. Couldn't pass up the car. Will just refiance with my credit union in 6 months when my scores are a lot higher.

Message 9 of 12
bigpoppa09
Established Contributor

Re: Carvana Experiences. Interest rate, credit hit etc.


@creditexpresstrain wrote:

Carvana use to use Go Financial(bad company) but recently (this year) changed to Ally Financial. Your interest rate can change a lot with a little as a few points increase. I just found one of my dream cars and have a score they tell me at 653. APR 10.3. Capital One was telling me an APR of 12. I did just pay off $10k in credit cards but that won't show up until middle of next month. Couldn't pass up the car. Will just refiance with my credit union in 6 months when my scores are a lot higher.


Are u sure i just read a article that NerdWallet did just last month it lists them stil using GO Financial.  https://www.nerdwallet.com/blog/loans/auto-loans/carvana-financing-2017-review/   For anyone interested the above info is incorrect i just called Carvana  they still use Subprime lender Go Financial.

Message 10 of 12
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