I don't get it, can someone explain?

[Anonymous]

I've been holding off on financing a vehicle until my credit improved. I was super excited when, after 3 months of using and paying a secured card my scores were finally in the 620-640 range across the board. Based on the forums here, I thought that would be no sweat to get a rate of 10% or maybe a smidge under.  So i started shopping, one dealer kept telling me the best he could do was 17.99 on a car I didn't even want! Next dealer...he can get me 12.99 on a vehicle with 95k miles...not doing that (plus seems pretty low for high miles, but funny he can't get me that on a different vehicle?)  Next dealer...says the first two were lying, didn't even submit to any banks. We settle on a vehicle, he quotes me the financial stuff and when I go to sign the papers my payment is almost $50 higher than what he quoted. His answer? "That was my estimate, but this is the banks actual numbers". I wanted the vehicle, was ok with the 14% rate (gotta start somewhere, right?) but not the payment amount nor the fact it was higher than he quoted me and didn't bother to let me know until signing time.

Now...what's my best move? I do indeed need a vehicle. Was coming into all these with 1000 down. I see all over the forums people with way lower scores getting way better rates!!! What am I missing? These are all franchised dealers, no buy here pay here or Drivetime type places.

I have: medical collections, most recent is 3 years ago. Secured card, 3 months reporting. Otherwise, nada. Everything else has fallen off except an old Target chargeoff 10 years ago (why is THAT still showing up after 10 years?)

Anyway...now I've wrecked myself with a million inquiries, have no idea who is telling me the truth. When I give approval details to one, they laugh and say it's impossible.  Is it my lack of recent history despite my scores that is making this impossible? Trying to finance 15K, so debt to ratio is still low.

Any insight, explanation, or advice would be appreciated!

[TRC_WA]

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moncli wrote: I have: medical collections, most recent is 3 years ago. Secured card, 3 months reporting.

Is it my lack of recent history despite my scores that is making this impossible? Trying to finance 15K, so debt to ratio is still low.

Any insight, explanation, or advice would be appreciated!

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It's both the collections and the lack of history. 

The lack of credit history (and a previous auto loan) combined with the collection issues are going to make things difficult.  I'm sure you'll get a vehicle but with a high rate.

[Anonymous]

Apparently I'm just naieve I know my credit history is not strong, but was so excited to see my improved scores. I guess the score itself doesn't carry much weight, it's more what makes up the score, is that at least fairly accurate?

[Anonymous]

Were those your auto-enhanced scores? Sometimes auto-enhanced can be lower than standard scores. So, what you are seeing might not  be what they are basing their decisions on. Also, unfortunately you're at the mercy of the dealer and the people they use for financing. It sucks but unless you can walk in with financing in hand, you have to play their games and the rules are slanted in their favor unfortunately. They know they have you by the short-hairs and will take advantage.

[Anonymous]

My straight FICO scores were EQ 640, EX 636, TU 622. You hit the nail on the head, I'm not in great bargaining position so they're nailing me because there isn't much I can do about it. Darn. I'll be spending a lot of time in the repair/improvement forums, I thought I was on track to qualifying for a mortgage in 12-18 months.

[Anonymous]

I was in the exact same boat about 5 years ago, maybe worse. Low scores, had to buy a car no choice. Sucked it up, paid the high interest, wandered the bad credit/high payment wilderness for that time and now I'm in position to buy on my terms. Dont give up.

[Anonymous]

Try going online to Cap1. See if you're prequalified with them.

Get some payments made and in 6 months to a year, try to refinance into a better rate.

[TRC_WA]

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@Anonymous wrote:

Apparently I'm just naieve I know my credit history is not strong, but was so excited to see my improved scores. I guess the score itself doesn't carry much weight, it's more what makes up the score, is that at least fairly accurate?

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Pretty much.

I bought my car last year ($40k) with a Ch 13 still reporting and an EX score of 680.  Auto enhanced score was 703... due to 7 years of previous auto loans.  I got the car at 4.49% which I gladly accepted and $0 down.

My history is what got me the loan... now I just need to refi to an even better rate.

If you need something now you should brace for a higher rate... and then refi later once you build history.

[jim44]

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@Anonymous wrote:

My straight FICO scores were EQ 640, EX 636, TU 622. You hit the nail on the head, I'm not in great bargaining position so they're nailing me because there isn't much I can do about it. Darn. I'll be spending a lot of time in the repair/improvement forums, I thought I was on track to qualifying for a mortgage in 12-18 months.

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As you know there is more than just a FICO score in the equation.  The miles and age of the vehicle have an influence as well as your time on a job and your income. I know of one subprime that doesn't bother with FICO, as long as you have decent income, a stable residence and no auto repo history or open BK you're good to go. All this comes with high interest of course. The only dealerships I'm aware that you at their mercy for financing are BHPH lots. The lenders for these loans set the stips the customer must meet in order for a loan to be approved. 

Those quotes you had from those dealers you mentioned were just quotes... in order to get to a bottom line F&I must run your credit and we've all read horror stories of customers having a ton of HPs on their credit from one dealer.  Glad you are reading from this forum... there is a ton of good advice here.

[TRC_WA]

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@jim44 wrote:

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we've all read horror stories of customers having a ton of HPs on their credit from one dealer.

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Yep... I took 18 when I bought my Challenger last year.

It was to be expected though... I still had a discharged Ch 13 reporting... 703 auto FICO... and I wanted a $40k car with $0 down.

I got it... just took a few pulls.  Didn't affect my score any... 1 point on EQ was all I lost... and in 9 months they fall off my reports.