Denied at Cadillac

[Anonymous]

Hello,

I was interested in purchasing/leasing the new 2021 Escalade, but I was denied because of my highest car history loan. I have had several cars in the past with the highest being financed was 35k years ago. The vehicle is about $110k, and wanted to see if any has experience this or if this is true?

My current FICO scores are:

General FICO score 8:

Equifax: 693

Transunion: 707

Experian: 722

My salary is around 18k/monthly, but I started my own business and been operating for about 11 months. I have bank statements and account records that document my income.

Just wanted to see what the forum thinks of the denial.

[simplynoir]

Hi and welcome to the forums, @Anonymous 

That makes sense to me depending on the length of the loan/lease and how much you were going to put for a downpayment. Did you want to finance with Cadillac or did you shop around for loan amount/rate?

[JGGM]

Do you have a "thick" file, meaning lots of trade lines, a mortgage account, etc., - or is it more like a $35k auto loan from years ago and a couple low-limit credit cards? Do you know your FICO auto-enhanced scores (EQ5, TU4, EX2)? They can definitely be different. And, depending on the state you are in, GMF (captive lease-lender for Cadillac) would possibly only pull your EQ. Your FICO8 EQ is 693 - it wouldn't be outrageous to think your auto score could fluctuate +/- 10-20 points from this (mine does). So GMF may have pulled a lower score, which would bump you down a credit tier. GMF typically needs a 700+ for A+/A1 tier, which is the best money factor rate.

But - if you want the car (the new ones are quite nice by the way), why not just buy it on a 72 month term? The payment is probably the same as the lease payment (it is for Tahoes and Yukons at least). If you want a new car in 3 years, trade it like everyone else does. I had a good customer of mine the other day buy a 21 Tahoe Z71. The 72 month payment was like $1060, the 39 month lease (15k/year) was about $100 more. I would imagine the payment spread on an Escalade is even bigger - it's only got a 48% residual after 39 months 

[CreditCuriosity]

You were most likely denied for "sticker shock" reason, or did they give you exact reason.  Even if income supports it which appears yours does if you haven't had a car loan or alot smaller car loan in the past, your case being 35k loans they are worried you most likely won't be able to pay that kinda payment back as that is a big jump from no payment or from a 35k car payment.  Pretty common actually

[Brian_Earl_Spilner]

Kind of off topic, but kind of not, anyone else amazed at how truck and SUV prices have creeped up towards the 6 figure range? I would think that lenders would be more accommodating to the fact that prices have gone up that high. Average price of a car was 30k and that's moving up. Average price of a truck/SUV is in the 50s. Seen quite a few people denied because of the rising prices and lenders believing people can't afford the payments. At some point, people are going to start getting priced out of being able to buy a vehicle.

[Loquat]

If I'm understanding correctly, the dealership couldn't obtain financing for you or did you try to obtain financing on your own?

I don't care if you never financed a vehicle before, if all of your numbers and paperwork are in order, sticker shock or not, I could get a deal hung as long as everything you say is factual and your income is the stated $18k/month (with proof).

If the dealer couldn't get the deal hung and everything you say is in order, I feel very comfortable saying that your F&I guy is extremely lazy or has poor look-to-book ratios with his set of lenders.

If all else fails this is where a relationship with a local credit union may come in to play. Go have a chat with someone local, explain to them what you want, present with current and factual documents and get the deal done.

I'm going to say it for the umpteenth time, a good down payment can overcome a lot of things. You may not be able to get it done without putting some $$$ down but with your income, I'd have this deal hung, your Escalade in Get Ready, and you out of my office within a couple of hours.

There are times when I think I should hang up these scrubs that I wear and go back to spinning paper in the box; these F&I guys are getting lazy these days.

[Save-n-Invest]

OT but if you have been spared from the goofyiness that is new Cadillac get down on your knees and thank whatever you pray to. I wish something prevented me from buying the one in my garage. If you get a good Cad you are ok. If you get one of the many buggy ones be prepared to live with it. That B2B is actually taillight. They all "function as designed" per GM/Cadillac.

[Anonymous]

I was going to put 20k down, and when I was doing the application salesperson told me everything look good. When I arrived he stated that I should start with a car around 50k. I was willing to finance with whoever, and I did not shop around yet.

[Anonymous]

Yes I have 9 tradelines, plus a mortage. My highest credit limit is 25k.

I was willing to finance since I was going to put down 20k. I was not going to put anything down if it was going to be a lease, or least a smaller amount if possible. 

[Anonymous]

Thanks for insight and I totally agree with you.