My car loan pulled 5 times

[razorsedgenwo]

Hello. My friend went to get a car loan to finance 25,000.00 today. She has 4 year credit history with one credit card.  They pulled a score of 780 but would only issue a loan at 9%. She then said shed put 4000.00 down. The %rate dropped to 5.4%. Her score dropped only 15 pts. Pretty good. The score shows 5 hard pulls on the same day. Is this normal? Since she pulled this score yesterday can she theoretically apply for a few credit cards and be shielded by the effect of hard pulls for a short period of time? She needs to expand her credit card total and multiply them so this doesnt happen down the road. Any info or recommendations are appreciated. Thank you for your help!

[Anonymous]

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@razorsedgenwo wrote:

Hello. My friend went to get a car loan to finance 25,000.00 today. She has 4 year credit history with one credit card.  They pulled a score of 780 but would only issue a loan at 9%. She then said shed put 4000.00 down. The %rate dropped to 5.4%. Her score dropped only 15 pts. Pretty good. The score shows 5 hard pulls on the same day. Is this normal? Since she pulled this score yesterday can she theoretically apply for a few credit cards and be shielded by the effect of hard pulls for a short period of time? She needs to expand her credit card total and multiply them so this doesnt happen down the road. Any info or recommendations are appreciated. Thank you for your help!

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Dealers frequently blast out credit applications to 5-8 or even more lenders to get someone qualfied.  With her credit I am sure she could do much better through Penfed or DCU it would we well worth her applying with them she can probably get a rate around 3%.  Dealers add APR points to loans they arrange and that combined with them blasting applications out to everyone but the Easter Bunny is why we always reccomend going through a credit union for a preapproved loan before going to the dealer.  Its super easy and she can still do to and save herself some cash over the life of the loan.  

[djmax041]

She got scammed 9 percent for an auto loan is crazy with that score even 5 percent is bad. However yes they will pull your score 5 times are signed consent and they're can pull up to 5 times from different lenders. I wonder what car was she trying to buy.

[razorsedgenwo]

I thought that as well. Shes buying a jeep renegade. Their excuse was she had a great score but very limited history. The salesman said she could probably get a high credit limit on a credit card but as far as chrysler was concerned her lack of history was a risk.

[fltireguy]

DCU... 

[Gmood1]

She needs to hit up PenFed or another CU for her auto loan. There's no way she should have a rate that high with those scores! That's just plain ridiculous!

[Appleman]

+1 PenFed refi

[razorsedgenwo]

Thanks for the advice everyone. I went to my credit union and they said to bring her in. I asked them what was the lowest they could give her. They said 2.7 would be the lowest delending on pull.So i called the dealer back and said i think we had a change of heart. The rate was way too high and im not happy about the 5 pulls. He said he call me back after he talked to the manager. He texts back 2.9% I think thats pretty good. What do you guys think?

[cmm89]

Dealerships are like auto insurance brokers... they almost always have a better rate sitting there for you, but they want to make $$$. The higher the APR, the more the amount financed, the bigger the commission for the Finance Manager/salesperson, etc. As per every poster above, I would STRONGLY recommend going through a credit union.

The salesman is just trying to ever-so-slightly beat what offer may come up so that he can keep his commission. Go with a CU!

EDIT: I work for an insurance company that also has a Bank..... I refinanced a new auto client's 2015 mid-size sedan from 23.49% (they forced her mom with terrible credit on to the application) to 6.89% because of limited credit history. She saved thousands and thousands over the life of the loan. 

[Anonymous]

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@razorsedgenwo wrote:
Thanks for the advice everyone. I went to my credit union and they said to bring her in. I asked them what was the lowest they could give her. They said 2.7 would be the lowest delending on pull.So i called the dealer back and said i think we had a change of heart. The rate was way too high and im not happy about the 5 pulls. He said he call me back after he talked to the manager. He texts back 2.9% I think thats pretty good. What do you guys think?

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This shows you what I consider the sleezy nature of the business, literally they were going to make her pay several hundred or even thousands of dollars for using an automated system to arrange an auto loan.  They will defend the practice by saying they need to get paid for their services etc, this is why I don't bother with dealer financing and just use a credit union that won't take advantage of me and that values my relationship.  2.9% is a nice rate, they should have given it to her in the first place and it shows she has plenty of good credit history so they were being deceptive to take advantage of an inexperienced buyer.  Personally I would just go with a credit union but that's her call.  The 2/10 ths is not much difference but to me there is a principle here.