First time Car Buyer - Approval question (time sensitive)

[inara220]

Credit Score:  640 Experian (only one I have checked on myfico- My "free score" on Discover card is 652, and my "free score" at my credit union is 666 but it was last updated over a month ago)

AAoA: 6 yrs

# of positive trade lines: I'm not exactly sure what this means... accounts that have always been paid on time?  In that case 12 between student loans and credit cards

# of negative trade lines: 1 $365 collection from 2012 (I have been contesting this... bad former landlord), 2 "30 days late" that are old 2008/2011

Income: $57,200 and on it's way up over the next 5 years

Lenght of Employment:  at current job?  2.5 years,   # of years I've been full time employed 16

Previous Loan Experience:  No car loan.  Personal loan at credit union that I've always paid on time, is 3 payments from being DONE,  7 student loans, I recently graduated so these don't have much payment history

Debt-to-Income (DTI): 36%  <-- I think... this is hard to deterimine.  I have a high ratio though when you count in student loans)

Year of Car:  Brand New Nissan Leaf

Miles: it's new...

Purchase/Refinance: Purchase

Requested loan term (XX Months):  72

Down payment amount:  Flexible (I could put up to 14K down if I want to)

Co-borrower/Co-Signer:  Possible but would prefer not to

Other:  I have a car that is close to dying, I also have a large amount of cash that I could use as a downpayment. 

Here's the thing, I was planning on spending more time improving my credit before getting a new car but my current car is dying.  I test drove a Nissan Leaf (I have a free charging station at work) and the offer is pretty decent on purchasing a brand new one.  I have a large chunk of change which I was going to use to pay down credit card debts that are high (holidays just finished and other assorted reasons over the past 6 months that have caused me to use most of my credit so my utilization is very high at the moment) but I could also use that as a down payment on a car.  They are offering $26,950 - 1950 (trade in of my 2001 camry that is about to die), bringing it to 25K before Taxes.  I would get the full $7,500 tax credit (all electric vehicle and I make enough to take full advantage of it).  So this pretty much brings the car down to $20K. Right now Nissan is offering 0% down, 0% financing for 72 months if your credit is good.

This is sort of a limited time offer (next four days because of the tax credit, there is no guarantee it will be around next year).. my car is only going to go down in value, and I would get this credit in 2-3 months.

I want to do this on my own but my boyfriend is going with me (he is a way better negotiator and I have zero experience buying cars).  So... I guess my question is, when they pull your credit report, do they discuss details right there in front of you?  or do they just come up with a score and say "okay ... your score is such and such so here is the financing we can give you"  He seems to think that with a credit score of 650, I would have a "good" chance at getting zero percent, I think he's wrong.  He says he'll cosign with me (he has impeccable credit but I would rather not do this as I think it puts a strain on the relationship plus I would then feel obligated to tell him my full credit situation instead of the 90% of it he knows).

Second question, if I don't qualify for 0%... how much would I have to put down to get the 0% financing with my "own" score (no co-sign).  I can get up to $14K for a down payment (bringing the loan down to 13K) but with 0% and I still have debt at other interest rates, I'd like to put the minimum down I can so that I can be smart about my interest rates.

First time buying a car I don't really know what to expect.  I wasn't planning on buying a car so soon but this seems like a good deal for my personal situation.  Like I said about the free charging at work, this car would have no maintenance, gas, or oil change costs going forward ( just tire rotation).

Thanks in advance for your help/advice.  I wouldn't put myself in this situation if I thought my car go go another year.

[Anonymous]

How much they reveal about your credit file is really dependent on the results of the score they retrieve and whether you would qualify for the 0% financing.  If you or your boyfriend were to question them if you didn't qualify then they might start going into the reasons why.  If you're really that concerned about him finding out about stuff then try to pull aside the salesperson/finance manager and tell them not to discuss your file with anyone but yourself.

As for putting more money down to qualify for the 0% Id caution about going overboard with your downpayment at the expense of not paying down your credit cards.  They could cost you a lot more in the end than if you were qualify for example, a 2.9% rate.  Additionally a big utilization on your credit card balances will lower your scores quite a bit. Generally don't overdo your downpayment on a car loan with today's low interest rates especially when there are better ways to use that money.

Hope this helps.  Let me know if you have more questions and good luck.

[inara220]

Thank you... that was helpful.

I agree that I'd rather have debt at 0% than any other rate so I fully realize the whole not putting down a large downpayment. 

[Anonymous]

I hate to say this, but with a 640 credit score there is NO WAY you will qualify for 0% APR.  the zero APR deals are for those with 760 credit scores and above.  Realistically speaking, you will be lucky to get something around 7% with a 640.  

[inara220]

Thank you... that is what I thought.

[Creditaddict]

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@Anonymous wrote:

I hate to say this, but with a 640 credit score there is NO WAY you will qualify for 0% APR.  the zero APR deals are for those with 760 credit scores and above.  Realistically speaking, you will be lucky to get something around 7% with a 640.  

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WRONG WRONG WRONG... We are talking about Nissan... actually talking about ANY CAR company they say the lease specials and APR's are based on 720+ usually but almost all of them will go to tier 1,2 and Nissan TIER 3 and still give top APR or lease... Nissan and Toyota are at least 650 but in the past years Nissan has been known to go all the way down to 610!!

Since this car has the huge rebates, that looks like down payment on paper if im not mistaken so the chances that nissan will stretch and take the loan are even better... offer to throw on another $5k if you want but id probably initially say your down payment is the rebates as that's what they were designed for and dealers usually plan on that... I would absolutely not offer more down payment than what you will have left over if you wiped your debt out (which if we were not talking about doing this in the next 3 days I would have said should have been done first!)

I would go for it and not worry about it... more than likely Nissan will pull TU

[Anonymous]

CA is right.  She has a very good chance at getting the special financing.  Not guaranteed but a reasonable chance.

[inara220]

Agreed on the whole 3 days/paying down cards... my original plan was to use my sudden influx of cash to pay off debt... If this wasn't a time sensitive deal I would walk away, focus on paying off my credit cards/personal debt and wait til my car ACTUALLY died to buy a new one.

But this is just all falling into place in a way that is hard to argue with.

I am encouraged by your words on Nissan and the special financing.  My worry is that my debt to income ratio is still very high (that is what is bringing down my score and that one bad collection).

Should I pull my TransUnion score now just to check and see what it is?  So I know it going into the dealership?

[Anonymous]

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@inara220 wrote:

Agreed on the whole 3 days/paying down cards... my original plan was to use my sudden influx of cash to pay off debt... If this wasn't a time sensitive deal I would walk away, focus on paying off my credit cards/personal debt and wait til my car ACTUALLY died to buy a new one.

But this is just all falling into place in a way that is hard to argue with.

I am encouraged by your words on Nissan and the special financing.  My worry is that my debt to income ratio is still very high (that is what is bringing down my score and that one bad collection).

Should I pull my TransUnion score now just to check and see what it is?  So I know it going into the dealership?

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Certainly helps to know your score but keep in mind that what you pull will not match theirs at all.  They are pulling an auto enhanced score so the score could be higher or lower then the one you get.  Also if you pull your TU score from the Transunion site, it won't be a real FICO score but a FAKO which is their own internal score and is not used by any credit provider 

[Creditaddict]

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@inara220 wrote:

Agreed on the whole 3 days/paying down cards... my original plan was to use my sudden influx of cash to pay off debt... If this wasn't a time sensitive deal I would walk away, focus on paying off my credit cards/personal debt and wait til my car ACTUALLY died to buy a new one.

But this is just all falling into place in a way that is hard to argue with.

I am encouraged by your words on Nissan and the special financing.  My worry is that my debt to income ratio is still very high (that is what is bringing down my score and that one bad collection).

Should I pull my TransUnion score now just to check and see what it is?  So I know it going into the dealership?

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no because they will pull an auto enhanced TU that won't be the same as what you pullled... with no auto loans previously it's hard to say where you will be... but I can tell you Infiniti pulled a higher TU score than ANY other dealership pulled for me and considerably higher than myfico TU score!!