Complicated Approval Chances?

Anonymous · ‎06-04-2020

I need advice with my chance of being approved. I'm trying to get out of a vehicle that I'm $12,000 upside down in. It's financed with NFCU. I found a new unsold vehicle from last year that Audi is willing to discount $14k off MSRP, bringing it from 84k to 70k. If I factor in my previous car that brings the financed value back to roughly 84k after fees. I think this should be ok because the LTV isn't going over 100%, right? I'd like to finance with Audi as they're offering 0% for 72 months. The big kicker here is my credit. My DTI is extremely low (5%), my income is high (~400k), and I have roughly 0% utilization of my credit currently. Unfortunately, the one negative item on my credit report is an auto repo from 4 years ago. I did not resolve the collection and it's now beyond the SOL so I'm not going to. The amount owed was substantial, roughly 13k. I did get a car financed after the repo with a $940 payment that's been on time for the length of the loan, about 20 months so far. It's the one I'm trading. My current FICO 8 is 720 but my auto enhanced score is 660. What are my chances of getting this deal to work? I don't expect to qualify for 0% but I'm hoping to only add a few percentage points. I'd prefer to put very little to no cash down given the current state of the economy/job market, I want all of my cash on hand. Should I even try with VW Financial given my history or should I just go back to NFCU? Does anyone know either company's credit tiers and applicable increases in rate at each tier? Thanks!

Harvey26 · ‎06-05-2020

@Anonymous wrote:
I need advice with my chance of being approved. I'm trying to get out of a vehicle that I'm $12,000 upside down in. It's financed with NFCU. I found a new unsold vehicle from last year that Audi is willing to discount $14k off MSRP, bringing it from 84k to 70k. If I factor in my previous car that brings the financed value back to roughly 84k after fees. I think this should be ok because the LTV isn't going over 100%, right? I'd like to finance with Audi as they're offering 0% for 72 months. The big kicker here is my credit. My DTI is extremely low (5%), my income is high (~400k), and I have roughly 0% utilization of my credit currently. Unfortunately, the one negative item on my credit report is an auto repo from 4 years ago. I did not resolve the collection and it's now beyond the SOL so I'm not going to. The amount owed was substantial, roughly 13k. I did get a car financed after the repo with a $940 payment that's been on time for the length of the loan, about 20 months so far. It's the one I'm trading. My current FICO 8 is 720 but my auto enhanced score is 660. What are my chances of getting this deal to work? I don't expect to qualify for 0% but I'm hoping to only add a few percentage points. I'd prefer to put very little to no cash down given the current state of the economy/job market, I want all of my cash on hand. Should I even try with VW Financial given my history or should I just go back to NFCU? Does anyone know either company's credit tiers and applicable increases in rate at each tier? Thanks!

Have you reached out the dealer to see if they are able to get you preapproved. You can fill out a credit app from home and they can tell you wether or not you qualify for 0%.

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Anonymous · ‎06-05-2020

I was trying to avoid multiple hard pulls. I'm nearly certain NFCU would approve me given that they approved me last time albeit it a higher interest rate just wondering if anyone knows how flexible Audi/VW FS can be. I guess it's a good idea to reach out directly to Audi FS to at least avoid the dealership HP assuming that they'll skip that if I have an Audi approval although maybe in my case it's better to have a good dealer fighting for me to get approved. . .

sccredit · ‎06-05-2020

I'm not sure that Audi/VW Financial would tell you a whole lot. Check their site to see if they have a direct preapproval. I have never dealt with Audi/VW Financial but my understanding is they are one of the tougher ones. Someone who has dealt with them may have had a different experience.

Anonymous · ‎06-05-2020

Thank you, this is why I reached out here. I've also heard they're tougher. I'm fairly certain MBFS or BMWFS would be far easier but I'd end up putting a substantial amount down to cover my negative equity since I can't get the same deal with them. I'm waiting for my report to update from one change this month to know my final scores and guess I'll just have to bite the bullet and work with the dealer.

Anonymous · ‎06-06-2020

I dont have much to add. Your income appears to support the price of the car. Not taking your credit score into consideration, I think it would work. What I dont know is the impact if your score.

If you are trying to conserve cash, why are you not keeping the car you have? Refinance if rate is high. $84k loan for 72 months even at 0% is higher than you pay now from my math.

Anonymous · ‎06-06-2020

You're right, I do expect my payment to rise $150-200. It's more about depleting my cash by 15k vs the small monthly increment. I also have to replace my car as it's a small electric car that has a short range and with COVID I need something that I can drive long distances vs flying to see my family members that are high risk. I also don't think I can refi given my negative equity.