First time financing - Subaru Crosstrek

[Anonymous]

Hey everyone -

I am planning on buying my first new car within the next 3-4 months and have some questions regarding financing due to previous poor (2-4 yrs) credit history. Before I get into that I'll share some details on what I am looking at and what I have. I am looking to buy new because I've had more than a fair share of "bad luck" on pre-owned cars over the years and quite honestly I don't want to ever deal with it again. Looking to get one that I know has been mine from the start to drive and take excellent care of this car until it can't run anymore.

• Make and model: Subaru Crosstrek Premium or Sport

• Year: 2020 (Premium) or 2021 (Sport)

• Down payment: $10,000 (this is my down payment goal - explains 3-4 month timeline, is this beneficial given my circumstances?)

• Gross Income: $46,000

• Age: 23

To spare the story, it boils down to the fact that when I was first beginning college I made poor financial decisions which impacted my credit severely. It happened, I dealt with it, I've already experienced first-hand how detrimental that could be. I now have 2 chargeoffs and 1 account with missed payments because of it. Chargeoffs were paid in full. Account with missed payments has over 2 years of consecutive on-time payments. Fast forward to now I have taken very good care of my credit and my finances. As of today (just checked myFICO account), my FICO score across all 3 bureaus range from 693-704. I have 2 years of consecutive payments on all of my accounts. I suppose more importantly FICO auto scores are:

Transunion: Score 8 - 696, Score 4 - 717

Equifax: Score 8 - 687, Score 5 - 684

Experian: Score 8 - 659, Score 2 644

With all things considered - am I still facing the inevitable of getting very poor financing terms due a) my past credit history and b) being a first time buyer? My local CU that I've been a member for since 2010 lists their current APR range for first time buyers as 5-18%.

Thanks in advance.

[Brian_Earl_Spilner]

I had much worse credit than you with scores near 600 and Chase financed me for a new Mazda 3 for $28k with 0 down at 9.99% for 72 months. The main differences would be my salary was 70k and I have a thick profile, like 20 years thick. At the time though, my newest late was less than 2 years old.

[ldkcivilservant]

Depends what you call 'very poor' terms. You clearly aren't going to wualify for Tier 1, or maybe even Tier 2, so something around 8-10% is probably in your future.

You might want to do some research and find what captive lenders use which bureuaus/scores and target the ones that use your highest scores. You don't say what your Auto Enhanced scores are, so worthpulling your report from MyFico and finding out. Might save you $$$ in the long run.

[Anonymous]

Thanks. I did include my auto FICO scores I pulled from myFICO membership:

Transunion: Auto Score 8 - 696, Auto Score 4 - 717

Equifax: Auto Score 8 - 687, Auto Score 5 - 684

Experian: Auto Score 8 - 659, Auto Score 2 644

I've seen a few times that Subaru Financial/Chase pulls from TU, which is my highest one. I'm going to do some digging around and see what I can do and learn within the next few months. I did send out goodwill letters for my derog accounts but I'm not holding out any hope for those. Whats done is done and I've only moved forward since then, I really only sent them out to see what happens. At this point I've just been dealing with my consequences and it'll definitely play out in this situation with the car as well.

[Anonymous]

The best thing you can do is try to clean up your report as much as possible, and any nagatives that can't be deleted you'll just have to accept for now and the rates that go along with it. I would suggest that when you are really close to purchasing said vehicle that you make sure all Credit cards are paid to zero except one, if that applies, as it will boost you score some.

Then SP shop around different Banks for the best rate. Just because you bank with a particular lender doen't mean you'll get the best rates with them. Definitely do not let the Dealer shop your rate!

When you do secure finacning I would not put the whole $10K down at signing, unless it's needed to make the monthly payment more affordable for you. if at all possible I would only put $2-3K down at time of purchase, then use the remaining cash to pay down the principle of your auto loan.

A friend of mine recently bought a 20 Crosstrek in late 19 and was considerd 1st time buyer because it had been over ten years since he last bought a car, thus his rate was slighly higher than it should have been, even though he did have a 780 at the time. He took a longer term to get the payments low and manageable, but he had a goal to pay it off in 2-3 years and is on track to do so by  early next year.

I personally don't know why he wanted the payments that low because he had no other bills and makes decent money, but that's his choice.

It's mostly about having an end goal.

[Anonymous]

So I submitted a prequal with Capital One Auto Navigator and it came back with a prequal approval up to $40,500 from 4.5% - 6.5% APR. Quite a bit better than I was expecting, to be honest.

I like the idea of putting 2-3 down and putting the rest towards the principal. I do want to pay it off relatively quickly. Thanks for the insight.

[Anonymous]

I would call a local Subaru dealer and ask them what their tiers are for their captive lenders. I recently found out that to get top tier with Honda Financial, you only need a 660 (as long as down payment/DTI/Salary support it)...  I found that all out before I even stepped foot in the dealership and just talked to the Finance Manager.

If you are seeing rates like that from Cap One, Id have to imagine you'd see better rates with captive lenders... But others on here know far more than me 😉

[Brian_Earl_Spilner]

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@Anonymous wrote:

Thanks. I did include my auto FICO scores I pulled from myFICO membership:

Transunion: Auto Score 8 - 696, Auto Score 4 - 717

Equifax: Auto Score 8 - 687, Auto Score 5 - 684

Experian: Auto Score 8 - 659, Auto Score 2 644

I've seen a few times that Subaru Financial/Chase pulls from TU, which is my highest one. I'm going to do some digging around and see what I can do and learn within the next few months. I did send out goodwill letters for my derog accounts but I'm not holding out any hope for those. Whats done is done and I've only moved forward since then, I really only sent them out to see what happens. At this point I've just been dealing with my consequences and it'll definitely play out in this situation with the car as well.

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This is Chase's pull on my Mazda. First page, top half was cropped out because it has my personal information. Shows the scores they pull, info they get, and derogatories are listed first from biggest balance.

[Credit4Growth]

@Anonymous  if you don't like your local CU rates then shop around through a few others (you can check online and call a few before applying)  also if @Brian_Earl_Spilner did not give you enough encouragement.... Yea.

You can do this and do it satisfactory enough to your liking and if it is not then refi the auto in under 12-13 months.

👋 Brian, thanks you for exposing your data to the WORLD... 😁👌

I am sure that is not everything Chase obtained but that one page sure is just a little bit more than I expected for one page. ✌

[Brian_Earl_Spilner]

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@Credit4Growth wrote:

@Anonymous  if you don't like your local CU rates then shop around through a few others (you can check online and call a few before applying)  also if @Brian_Earl_Spilner did not give you enough encouragement.... Yea.

You can do this and do it satisfactory enough to your liking and if it is not then refi the auto in under 12-13 months.

👋 Brian, thanks you for exposing your data to the WORLD... 😁👌

I am sure that is not everything Chase obtained but that one page sure is just a little bit more than I expected for one page. ✌

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It doesn't bother me to share it. This is 1 month into my rebuild.

The following pages are just the regular report repeating what you see for the first 2 entries. All the pertinent info is on top. The personal information that was removed also shows a OFAC and Military Lending Act search, all recorded address by Experian as well as my job, work address and employment dates.

They always pull EX and one other. In my case it was EX and EQ, which is pretty standard.