New auto loan

[mpicasso]

2011 Escalade

Have a pre-qualified offer from PenFed for 3.14%.  Considering NFCU and what the dealer may offer.

My biggest "concern" - have been waiting the past few months for my middle score to get to/past 740, so I can refinance my mortgage.  Trying to keep pulls to a minimum, as not destroy my opportunity to refinance.

Is there a way to do a soft pull with NFCU? Should I just stick with PenFed and consider refinancing later? Or try NFCU as well as the dealership? Are there others CU I should consider?

I have my FICO 8 scores but slightly worried about my auto-enhanced.  Co-signed a loan and little over 2 years ago, person paid late, 30 days.

Looking at a vehicle tomorrow and talked with mortgage broker about running running a report ASAP.  Looking for suggestions how to get all of this done.

[Loquat]

The interest rate of 3.14% from PenFed isn't a bad rate to be honest...especially on a 2011 Escalade. Even if you scores were a bit higher I don't know how much lower you'd be able to find on a used auto loan. And even if you could find a percent lower, unless you're financing a substantial amount, the savings may not be worth jeopardizing your mortgage refinance for.

Just something to consider. Good luck as you navigate your purchase. Feel free to report back on which way you decided.

[mpicasso]

Loan is definitely not significant...around $20K.

Thank you for confirming the thoughts I had.  Not worth dropping my credit score 40+ points just to save a little bit of money, especially when I am not planning to finance this vehicle much more than a year, 2 tops.

The rate given was a SP, so if things come back differently (should not as I have been following the AZEO for past few months), will reconsider options.

Thanks for the response!!!

[LakeLife]

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@Loquat wrote:
The interest rate of 3.14% from PenFed isn't a bad rate to be honest...especially on a 2011 Escalade. Even if you scores were a bit higher I don't know how much lower you'd be able to find on a used auto loan. And even if you could find a percent lower, unless you're financing a substantial amount, the savings may not be worth jeopardizing your mortgage refinance for.

Just something to consider. Good luck as you navigate your purchase. Feel free to report back on which way you decided.

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I'd go so far as to say that's an amazing rate on an 11 year old car.  Some lenders won't even approve loans for cars over 10 years old.

[4sallypat]

Be wary of the pre-approval number from PenFed.

They seem to only offer the best rate for a very few customers.

I got a 2.59% offer for my 2018 Honda that was a lease buyout and when I apped for the PenFed used car rate, they pulled EQ 09 of 750 and got a higher rate of 3.14% for 60 months.

PenFed sent me a check overnight but I was disappointed when my local CU offered 2.24% at 60 months for the exact same loan.

Cancelled my PenFed loan and went with my local CU. 

Told PenFed rep that the teaser rate and the actual rate was bad offer.

Worth checking around CUs and most dealers (franchised) have the ability to do a Auto FICO SP on your credit and make an offer based on that without incurring a HP until you accept the offer and then a HP will occur.

Here's my post recently:

https://ficoforums.myfico.com/t5/Auto-Loans/PenFed-used-auto-loan-check-arrived-at-3-14-but-cancelli... 

[mpicasso]

My "concern" is pulling multiple inquiries and messing up my chance to qualify at the best rate for mortgage.

I looked at amortization charts to see the value of shopping for a rate better than listed:

$26,000, 5 years, at 3.14%

Interest is $2128.32

26,000, 5 years, at 2.19%

Interest is $1473.17

Difference of 655.15, or $131/yr

My plan is to pay it off in 2 yrs

3.14% = $858.94

2.19% = 597.27

Difference of 266.67

I understand your point but struggling with the concerns of dropping a point of interest, for a few hundred dollars.  Your numbers would have been even smaller than mine, considering your loan value is $8K less than mine and you are financing a "new" vehicle vs my 11 yo vehicle.

I may consider another CU only if I can get an electronic transfer but otherwise, I will spend more in a month or 2, on dinners, than I will on interest over 5 years...

[mpicasso]

One other thing - the 3.14% is confirmed, not just a soft pull.

[Loquat]

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@4sallypat wrote:

Be wary of the pre-approval number from PenFed.

They seem to only offer the best rate for a very few customers.

I got a 2.59% offer for my 2018 Honda that was a lease buyout and when I apped for the PenFed used car rate, they pulled EQ 09 of 750 and got a higher rate of 3.14% for 60 months.

PenFed sent me a check overnight but I was disappointed when my local CU offered 2.24% at 60 months for the exact same loan.

Cancelled my PenFed loan and went with my local CU. 

Told PenFed rep that the teaser rate and the actual rate was bad offer.

Worth checking around CUs and most dealers (franchised) have the ability to do a Auto FICO SP on your credit and make an offer based on that without incurring a HP until you accept the offer and then a HP will occur.

Here's my post recently:

https://ficoforums.myfico.com/t5/Auto-Loans/PenFed-used-auto-loan-check-arrived-at-3-14-but-cancelli... 

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@4sallypat  First let me say that savings is always a good thing.  I remember your post about having saved a bit more by going with someone other than PenFed  However, the difference between 3.14% vs 2.24% on a 60 month loan at say $25k is roughly a $10/month savings.  Yes, don't get me wrong, savings is savings...but I don't know if I could take another HP and go through the process with another lender for such a little amount with a mortgage refi on the horizon.  Now over the course of 5 years you're saving $600 bucks which is a fair amount of money. 

But for myself, I don't ever keep a car for 5 years...rarely do I keep one for more than 3 so while $10 is indeed savings, I don't know if I would have bothered chasing another lender and taking another HP of such an insignificant amount. But that's just my mindset and I acknowledge that we all go about this in very different ways. 

[mpicasso]

Could not agree more - the longer the loan, the more concern I would have with interest rates.  I did 2 hard pulls, one with PenFed, 1 with DCU.  No score change, especially since I decided to not take the loan.

In the end - 3.14% vs 1.49%.  PenFed would have been easier, simply because I already bank with them and with a payoff projected around 30 months, the little extra expense would have been worth it.  Keep business where I aready have checking, 2 savings, and a credit card account.

Funny thing is this - dealership insisted I come to them, due to being end of the month, even without check in hand.  Told me I would be doing all of the finance department signage (which I was fine with, even though they were 70 miles away...in the end, was planning to have vehicle flat-bedded home).  Even telling/showing them an approval for 1.49%, they STILL tried to get my social, for them to run numbers through their system.  My point - be careful when shopping around for car notes...they obviously have no concern for the number of inquiries you take, nor your credit score.