Do I Qualify?

[NichelleN]

I've been dreading this because I'm nervous about getting turned down. I haven't financed a new car in many years.

But, here goes...

Credit Score: 681 (EQ), 697 (EX) and 705 (TU) - Note that I expect these to rise a bit as I just paid off 2 cards with relatively high balances. Utilization will be cut in half.
AAoA: 2.6 years (I've been rebuilding and my AAoA is low)
# of positive trade lines: 34
# of negative trade lines: 1 ( mortgage: last derog 2+ years old )
Income: ~$200K
Length of Employment: with current employer: 23 years, 8 months
Previous Loan Experience: Please see below
Debt-to-Income (DTI): 15%
Year of Car: 2017
Miles: 0k
Purchase/Refinance/Lease: Strongly considering leasing
Requested loan term (XX Months): 36 mos if leasing, 60 months if purchasing
Down payment amount: TBD
Co-borrower/Co-Signer: None
Purchase price of desired car: $57K. The sticker price is $67K but goes down to $57K due to an employee discount and offers

Other information - Before 9 months ago I had no auto loans at all on my reports. My credit was poor so I paid cash for my cars. The last purchase was 7 years ago.. However, in July of 2016, I took out a loan with PenFed. My mother passed away and we were having issues with the insurance company (GM coverage, etc). I needed to settle some major bills related to my parents home, etc. so I joined PenFed who suggested an $18k loan against my car. The interest rate was 2%. All payments were made on time and I paid off the balance less than 30 days ago. I'm concerned about the lack of car loan experience on my reports.

No collections, no public records

I keyed my current info into Cap One's Auto Navigator and was approved up to $40K. But, I'm looking to purchase something that costs more.

FINANCE UP TO
$40,000
ANNUAL PERCENTAGE RATE (APR)
3.29% - 9.28%
Your final APR will depend on the vehicle, the amount financed and the term length you choose.

I'm hoping for some feedback here before I go into a dealership for the purchase.

Thanks in advance for any advice.

[Anonymous]

---

@NichelleN wrote:

I've been dreading this because I'm nervous about getting turned down. I haven't financed a new car in many years.

But, here goes...

Credit Score: 681 (EQ), 697 (EX) and 705 (TU) - Note that I expect these to rise a bit as I just paid off 2 cards with relatively high balances. Utilization will be cut in half.
AAoA: 2.6 years (I've been rebuilding and my AAoA is low)
# of positive trade lines: 34
# of negative trade lines: 1 ( mortgage: last derog 2+ years old )
Income: ~$200K
Length of Employment: with current employer: 23 years, 8 months
Previous Loan Experience: Please see below
Debt-to-Income (DTI): 15%
Year of Car: 2017
Miles: 0k
Purchase/Refinance/Lease: Strongly considering leasing
Requested loan term (XX Months): 36 mos if leasing, 60 months if purchasing
Down payment amount: TBD
Co-borrower/Co-Signer: None
Purchase price of desired car: $57K. The sticker price is $67K but goes down to $57K due to an employee discount and offers

Other information - Before 9 months ago I had no auto loans at all on my reports. My credit was poor so I paid cash for my cars. The last purchase was 7 years ago.. However, in July of 2016, I took out a loan with PenFed. My mother passed away and we were having issues with the insurance company (GM coverage, etc). I needed to settle some major bills related to my parents home, etc. so I joined PenFed who suggested an $18k loan against my car. The interest rate was 2%. All payments were made on time and I paid off the balance less than 30 days ago. I'm concerned about the lack of car loan experience on my reports.

No collections, no public records

I keyed my current info into Cap One's Auto Navigator and was approved up to $40K. But, I'm looking to purchase something that costs more.

FINANCE UP TO
$40,000
ANNUAL PERCENTAGE RATE (APR)
3.29% - 9.28%
Your final APR will depend on the vehicle, the amount financed and the term length you choose.

I'm hoping for some feedback here before I go into a dealership for the purchase.

Thanks in advance for any advice.

---

I think your in perfect shape,  smart move to join Penfed and to take out a loan on your current car to build a installment loan history.  I would simply do a preapproval with Penfed and go shopping.  I would expect you will qualify at their best rate.  If you decide to lease I suggest reading up on leasing so you understand the elements of the lease that are negotiated.  The best way to deal with a lease is to look at the publicized specials on cars and use that as a framework for your deal.  They usually pick a very specific model to set the lease at X dollars down X a month so you want to understand the elements so if you decide to get something a little different in terms of trim or options you still get their best rate.

What cars are you considering ?

[NichelleN]

---

@Anonymous wrote:

---

@NichelleN wrote:

I've been dreading this because I'm nervous about getting turned down. I haven't financed a new car in many years.

But, here goes...

Credit Score: 681 (EQ), 697 (EX) and 705 (TU) - Note that I expect these to rise a bit as I just paid off 2 cards with relatively high balances. Utilization will be cut in half.
AAoA: 2.6 years (I've been rebuilding and my AAoA is low)
# of positive trade lines: 34
# of negative trade lines: 1 ( mortgage: last derog 2+ years old )
Income: ~$200K
Length of Employment: with current employer: 23 years, 8 months
Previous Loan Experience: Please see below
Debt-to-Income (DTI): 15%
Year of Car: 2017
Miles: 0k
Purchase/Refinance/Lease: Strongly considering leasing
Requested loan term (XX Months): 36 mos if leasing, 60 months if purchasing
Down payment amount: TBD
Co-borrower/Co-Signer: None
Purchase price of desired car: $57K. The sticker price is $67K but goes down to $57K due to an employee discount and offers

Other information - Before 9 months ago I had no auto loans at all on my reports. My credit was poor so I paid cash for my cars. The last purchase was 7 years ago.. However, in July of 2016, I took out a loan with PenFed. My mother passed away and we were having issues with the insurance company (GM coverage, etc). I needed to settle some major bills related to my parents home, etc. so I joined PenFed who suggested an $18k loan against my car. The interest rate was 2%. All payments were made on time and I paid off the balance less than 30 days ago. I'm concerned about the lack of car loan experience on my reports.

No collections, no public records

I keyed my current info into Cap One's Auto Navigator and was approved up to $40K. But, I'm looking to purchase something that costs more.

FINANCE UP TO
$40,000
ANNUAL PERCENTAGE RATE (APR)
3.29% - 9.28%
Your final APR will depend on the vehicle, the amount financed and the term length you choose.

I'm hoping for some feedback here before I go into a dealership for the purchase.

Thanks in advance for any advice.

---

I think your in perfect shape,  smart move to join Penfed and to take out a loan on your current car to build a installment loan history.  I would simply do a preapproval with Penfed and go shopping.  I would expect you will qualify at their best rate.  If you decide to lease I suggest reading up on leasing so you understand the elements of the lease that are negotiated.  The best way to deal with a lease is to look at the publicized specials on cars and use that as a framework for your deal.  They usually pick a very specific model to set the lease at X dollars down X a month so you want to understand the elements so if you decide to get something a little different in terms of trim or options you still get their best rate.

What cars are you considering ?

---

Thanks for the feedback. I really appreciate it. The PenFed auto loan was just by pure chance. I'd been rebuilding with the goal of joining when my scores were solid. When my mother died, it became a much higher priority so I applied. They were very generous with a credit card but turned me down for a PLOC. One of the reps suggested the car loan. In hindsight, I'm really glad he did.

I'm looking at a Cadillac XT5, Platinum edition. My father worked for GM for many years so I get his discount which makes quite a difference. I haven't decided on a down payment amount as I won't be trading in my current car. That's going to my brother who needs a bit of financial help. I've never leased and have a lot to learn so thanks for that info. The Cadillac site quotes a lease rate of $399 per month for 36 months for the standard XT5 version ($2900 down). The cost of a standard version is $39K.

[Anonymous]

---

@NichelleN wrote:

---

@Anonymous wrote:

---

@NichelleN wrote:

I've been dreading this because I'm nervous about getting turned down. I haven't financed a new car in many years.

But, here goes...

Credit Score: 681 (EQ), 697 (EX) and 705 (TU) - Note that I expect these to rise a bit as I just paid off 2 cards with relatively high balances. Utilization will be cut in half.
AAoA: 2.6 years (I've been rebuilding and my AAoA is low)
# of positive trade lines: 34
# of negative trade lines: 1 ( mortgage: last derog 2+ years old )
Income: ~$200K
Length of Employment: with current employer: 23 years, 8 months
Previous Loan Experience: Please see below
Debt-to-Income (DTI): 15%
Year of Car: 2017
Miles: 0k
Purchase/Refinance/Lease: Strongly considering leasing
Requested loan term (XX Months): 36 mos if leasing, 60 months if purchasing
Down payment amount: TBD
Co-borrower/Co-Signer: None
Purchase price of desired car: $57K. The sticker price is $67K but goes down to $57K due to an employee discount and offers

Other information - Before 9 months ago I had no auto loans at all on my reports. My credit was poor so I paid cash for my cars. The last purchase was 7 years ago.. However, in July of 2016, I took out a loan with PenFed. My mother passed away and we were having issues with the insurance company (GM coverage, etc). I needed to settle some major bills related to my parents home, etc. so I joined PenFed who suggested an $18k loan against my car. The interest rate was 2%. All payments were made on time and I paid off the balance less than 30 days ago. I'm concerned about the lack of car loan experience on my reports.

No collections, no public records

I keyed my current info into Cap One's Auto Navigator and was approved up to $40K. But, I'm looking to purchase something that costs more.

FINANCE UP TO
$40,000
ANNUAL PERCENTAGE RATE (APR)
3.29% - 9.28%
Your final APR will depend on the vehicle, the amount financed and the term length you choose.

I'm hoping for some feedback here before I go into a dealership for the purchase.

Thanks in advance for any advice.

---

I think your in perfect shape,  smart move to join Penfed and to take out a loan on your current car to build a installment loan history.  I would simply do a preapproval with Penfed and go shopping.  I would expect you will qualify at their best rate.  If you decide to lease I suggest reading up on leasing so you understand the elements of the lease that are negotiated.  The best way to deal with a lease is to look at the publicized specials on cars and use that as a framework for your deal.  They usually pick a very specific model to set the lease at X dollars down X a month so you want to understand the elements so if you decide to get something a little different in terms of trim or options you still get their best rate.

What cars are you considering ?

---

Thanks for the feedback. I really appreciate it. The PenFed auto loan was just by pure chance. I'd been rebuilding with the goal of joining when my scores were solid. When my mother died, it became a much higher priority so I applied. They were very generous with a credit card but turned me down for a PLOC. One of the reps suggested the car loan. In hindsight, I'm really glad he did.

I'm looking at a Cadillac XT5, Platinum edition. My father worked for GM for many years so I get his discount which makes quite a difference. I haven't decided on a down payment amount as I won't be trading in my current car. That's going to my brother who needs a bit of financial help. I've never leased and have a lot to learn so thanks for that info. The Cadillac site quotes a lease rate of $399 per month for 36 months for the standard XT5 version ($2900 down). The cost of a standard version is $39K.

---

That discount should make things easier for the lease.  I that reduces the capitilized cost which is a big factor in leasing.  The only other factor to keep an eye on is the money factor, multiply that by 2400 and that is the interest rate so keep an eye on that.  Other than that a lease will be a good way to go but never put a down payment on a lease because if the car is stolen or toteled you lose it.  You want to to give them the security deposit, licensing and first months payment only, they will likely waive the security deposit for employees. Let us know how it works out.  

[bigpoppa09]

As workingfor850 said putting a down payment on a lease is never  recommended DW is also interested in the Caddy XT5 on a lease i say the same thing 2900 due at signing and 399 a month the only thing we will be willing to pay up front is first month payment and license.

[NichelleN]

Thanks to both of you. I've been doing some research and now I know for sure not to *ever* pay a down payment on a lease. I was thinking of a traditional car loan and a way to keep the payment within my desired range. I'll make sure I'm educated before going into the dealership.

The good news is that my EX went from 697 to 709 in the last day. I'm going to give it a couple of weeks so my reports can update completely. After that, I'll head to a dealership.

[CreditCuriosity]

As others have stated you will have no problem getting an auto loan and/or lease at very good terms if not the best for that amount based on your income and DTI ratio.

Two of the most important things on leases are money factor and the residual as I just bought a new benz and the residual on the one I bought that I was considering leasing was 52% which was awful even though the money factor was great I compared that to buying a car 60 months loan by penfed and after 36 months in theory I come out ahead of a lease and in theory If I decide to sale it will make 4k more than a lease and the payments are fairly similar where-as a lease is usually a decent amount lower than purchasing, but not with the residual they had on the lease terms for me. manufactures set the residual I believe, not the dealer.

I would use PenFed at 60 months and you will get the 2.49% APR and be good to go.. I recently did it.. They only pre-qualify up to 50k and can get a check no issues, but once you ask for more than 50k you must provide a purchase order from x dealer and they will fedex a check out over night to you made out to the dealer for $15 and you both sign it being dealer/yourself to endorse it.   Penfed was a very painless buying process for me a few weeks back.  WAY better then financing through the dealer and it is only one HP against EQ for MANY credit products if you choose more than just an auto loan.. I will never use a dealer financial dept again unless I do a lease..  Also the beauty of it is they didnt try to upsell me either and the financial manger at the dealership made zilch off me where-as they are usually one of the highest paid people in the dealership as they make a point off loan or something along with tire and wheel, etc and other BS such as pre-paid maintenance (don't do this as you are paying interest on it)., etc. 

Best of luck whatever you choose to do!

[NichelleN]

---

@CreditCuriousity wrote:

As others have stated you will have no problem getting an auto loan and/or lease at very good terms if not the best for that amount based on your income and DTI ratio.

Two of the most important things on leases are money factor and the residual as I just bought a new benz and the residual on the one I bought that I was considering leasing was 52% which was awful even though the money factor was great I compared that to buying a car 60 months loan by penfed and after 36 months in theory I come out ahead of a lease and in theory If I decide to sale it will make 4k more than a lease and the payments are fairly similar where-as a lease is usually a decent amount lower than purchasing, but not with the residual they had on the lease terms for me. manufactures set the residual I believe, not the dealer.

I would use PenFed at 60 months and you will get the 2.49% APR and be good to go.. I recently did it.. They only pre-qualify up to 50k and can get a check no issues, but once you ask for more than 50k you must provide a purchase order from x dealer and they will fedex a check out over night to you made out to the dealer for $15 and you both sign it being dealer/yourself to endorse it.   Penfed was a very painless buying process for me a few weeks back.  WAY better then financing through the dealer and it is only one HP against EQ for MANY credit products if you choose more than just an auto loan.. I will never use a dealer financial dept again unless I do a lease..  Also the beauty of it is they didnt try to upsell me either and the financial manger at the dealership made zilch off me where-as they are usually one of the highest paid people in the dealership as they make a point off loan or something along with tire and wheel, etc and other BS such as pre-paid maintenance (don't do this as you are paying interest on it)., etc. 

Best of luck whatever you choose to do!

---

Thanks so much. I saw the picture of your new ride. It's beautiful! I'm playing the waiting game now as the PenFed loan has yet to clear from my credit reports. In the meantime, my scores have gone up a bit more to 691(EQ), 715(TU) and 709(EQ). They should go up again over the next few weeks. Once the reports are clear I'll apply with PenFed and see what those results are. Note - I logged on to the employee purchase site today and saw that they are offering 0% financing for a 60 month loan. I'm not sure what my chances are for that sort of rate. But the more I've read about leasing, the more I'm leaning towards just buying instead (as long as the monthly payment is in the range I'm predicting).

Thanks again for all of the advice.

[Anonymous]

You can probably get the 0%.

[NichelleN]

I have news! Even after reading here, I thought that MAYBE I could qualify for the best rates but wasn't sure. All I can say is that you guys were right. Instead of waiting, I decided to bite the bullet and take my shot. I wanted to take advantage of the promotions currently in play.

I did a pre-qual with PenFed just to be prepared. It wasn't their best rate but wasn't bad. I still have the 2 installment loans showing on my credit report and was prepared to recon for a lower rate if necessary. In the meantime, my salesperson called and said they found a car with all of the features I wanted (fully loaded) and could get it in before month's end. I had them run my credit (I was so nervous) and it came back through GM Financial as A1! I'm thrilled.

I'm taking delivery of my new Cadillac XT5 Platinum (red passion tintcoat) tomorrow!

Thank you. Thank you. Thank you. Without hearing from you I probably wouldn't have pursued it.