If I have poor credit, is it better to finance through a dealership?

[acercode]

I am looking to purchase a 2017 MB GLC or GLE for around $20k. But I have poor credit (FICO ~640). So would I have better chance at financing with a dealership rather than a traditional bank? 

[madmann26]

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@acercode wrote:

I am looking to purchase a 2017 MB GLC or GLE for around $20k. But I have poor credit (FICO ~640). So would I have better chance at financing with a dealership rather than a traditional bank? 

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Your best bet is to wait and fix what is wrong with your credit. You might have a 640 FICO, but is that a bankcard, regular or auto score? They all differ slightly and weigh things a bit differently.

Having paid double digit interest before on car loans, you're not going to do yourself justice with a 12-14% interest rate. That kinda rate means $280-$400 of your payment will be going to interest only.

It's not worth it, trust me. No matter how bad the burr is, it's not worth it.

[TequilaMockingbird]

If you must do it now, I would recommend going through a credit union to get pre approved for an auto loan.

There is nothing worse than sitting at a dealership sweating bullets while knowing you'll take whatever is offered to you. I had a similar TU score back in July and NFCU pre approved me for a no down payment used car loan at just over 5 percent interest.

There is no better feeling than walking into the dealership with your financing already in place!

My scores have rebounded and my rebuild journey is going well.

[fury1995]

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@acercode wrote:

I am looking to purchase a 2017 MB GLC or GLE for around $20k. But I have poor credit (FICO ~640). So would I have better chance at financing with a dealership rather than a traditional bank? 

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Yes, you would have a better chance at getting financing through a dealer but not better financing. 640 is not a terrible credit score. There are lenders that still consider 640 as prime. You could check Capital One and PenFed for prequalifiers without damaging your credit. What is needed here for some real feedback is what is making your score 640? Are there lates? What is your utility? Do you have money down?

Financing through a dealer is always an avenue. Dealers are extremely motivated to get approvals. You may not get the best possible that you could get... but you will get an answer at the very least. You do not have to take what is offered but you will know where you stand and where to start. 

[TRC_WA]

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@fury1995 wrote:

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Yes, you would have a better chance at getting financing through a dealer but not better financing. 640 is not a terrible credit score. There are lenders that still consider 640 as prime. You could check Capital One and PenFed for prequalifiers without damaging your credit.

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Yep... I got 5% from Cap One last March on a new vehicle... and I was fresh out of Ch 13 discharge with 630ish scores.  I didn't like that car though so I traded it in October (had 10k positive equity) and got my Bronco thru WF at 7% with higher scores...   Didn't care though because the dealer had EXACTLY what I wanted... a fully loaded Bronco... even the color was right.  I didn't have to order and spend months waiting.

Gonna refi with NFCU when my reports go clean later this year.

[CYBERSAM]

Credit Unions should offer you the best deal! If you don't have any relationship with them, start one!

Auto finance is different, there is already equity on the car.

[donkort]

I got two leases with a 640 credit score.

Forget about "buy here, pay here."  If it comes to that (which it probably won't), it's better to go to an auto auction, and pay cash.