You're going to need a co-signer. Your score is too low and that repo is having a more serious effect on your auto fico score, which is probably in the 400s. Taking care of the repo won't remove the charge off from your report and any underwriter can put 2 and 2 together to equal repo. If you can't get a co-signer, you'll have to go to a buy here/pay here dealer and they're gonna want at least 30% down. The ones around here typically want 40% down before raking you over the coals with a double digits interest rate. My advice is to save up some cash and buy a used car outright. Civic, Accord, Camry. If you want something a little nicer, get an older Lexus. Typically with those you only have to worry about oil seals and CV joints. The engines of late 90s to early 00s will last you 300k miles with regular maintenance.
@Anonymous wrote:
@Anonymous wrote:Hi Aglarry,
When you’re a subprime buyer credit isn’t the main factor lenders are worried about - it’s your job time. There are several subprime lenders that will give you an auto loan, granted at 22.99 - 24.99, so long as you have good job time and income. A co-signer will definitely help you get a better rate, but if you have at least a year on the same job and you’re paid with a paycheck stub with taxes taken out there are several options available: Credit Acceptance, Westlake Financial, American Credit Acceptance, Nationwide to name a few.
I went to the Credit Acceptance website to look around and saw this "Everyone is Approved. Enrolled Dealers can approve everyone." So how would something like that work? Would I first have to get approved through Credit Acceptance so they can let me know which local dealers are Enrolled Dealers?
How old is the auto charge off? So long as it’s older than 6 months, preferably 12 it’s aged and it’s not a huge factor anymore. Two auto charge offs and it gets much harder.
My CO is more than 2.5 years old now. It's the only car loan CO I've ever had.
The amount of down payment you’ll need depends on the vehicle and how the dealership is in the vehicle. Subprime lending is entirely different than prime because lenders will only give the dealer a percentage, usually 80-90% of clean trade, of the value of the vehicle. The bad thing is when you’re a subprime lender you don’t really have options. The dealer is going to find out which vehicles work with the lender programs they have for you and that’s what you get. Right now you don’t really have the luxury of choosing.
So let's say Credit Acceptance refers me to a few local dealers to visit. I go to these local dealers and I won't be able to choose which car I'd like? Rather they would tell me these specific vehicles are the ones we can get you approved for?
Now depending on the franchise store they might be able to throw you in a new vehicle. The reason being is when I worked at a Toyota dealership in Florida we were able to throw high 400s in new Toyotas through our captive because our portfolio was always in the positive - it’s referred to as dealer consideration. We sent 75% of our business to Toyota Financial that they allowed quite a few baddies, although they didn’t qualify, because we sent so many good buyers there. The reach a franchise store has sometimes is just ridiculous.
For now I'm focusing on a used car. However, if I were to change my mind and look for new, how would I know which of my local franchise stores could have such a leniency for approving low scores? Using Toyota as an example, would I start off by calling local Toyota franchise dealerships and checking which bank is the financing through, hopefully Toyota Financial?
Thanks!
The dealership has to have a vehicle that fits CAC's criteria for a loan. As an example, I went with a friend who got financed with CAC. The dealer, which was a Honda/Ford dealer with 3 lots, only had 1 vehicle that qualified. And, he didn't know what the vehicle was until after he had already basically went through the approval process because the dealership was going through their stock at the same time.
As for Toyota financial, any brand financing (Toyota, Lexus, Honda, Mercedes) can technically approve you. They have tiers for everyone. But, like what was stated above, the dealership is basically calling in a favor. The question is, do they want to call in that favor. Really, all it takes is a phone call to the finance company. Saw it plenty of times while working at Chase auto. Unfortunately, someone in finance usually has to be friendly with someone at the bank.
It also goes both ways though. When I was shopping for a car, I called an old friend at Chase and she sent me to a dealer and told them to give me the best price which ended up being below cost. The whole process from app to approval was 30 minutes and I never left the house. Simply got dropped off at the dealer, paperwork for 15 mins and drove off.
Well, what had happened was the transmission in his car was starting to slip so he wanted a newer car. Went to the dealer with down payment and a trade-in. After running his credit, the manager came out and told him they weren't able to finance him. He came out and we were gonna leave when he pointed out the manager and I knew him so I went in and asked him to do me a favor. That's when he mentioned CAC. We went back in and the application was sent to CAC with several cars. They kept rejecting the cars for one reason or another. Finally, they got an ok on a Ford Ranger and he filled out the paperwork. I don't remember what his APR was, but can find out. I believe it was in the 16s. He never saw or test drove the truck. When we came out they had a base model ranger with no options. He was crushed until the manager realized it was the wrong truck. 20 mins later they pulled up a fully loaded edge and he was stoked, lol. His scores were around yours and he got a call a few days later that they needed an additional $1500 down. He paid half and went back 2 weeks later to pay the other half. I believe his contract wasn't a standard length either. 34 or 36 months. I will say, CAC was willing to work with him when he ran into financial distress and started missing payments. I think he fell 2 or 3 payments behind for a while. They never talked about repo and set up a plan for him to catch up. He did and paid off the truck. This was back in, I want to say 2005 or 6. Back then you couldn't apply online. It had to be offered by the dealer to even be considered by them.