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Recommendations after auto-loan rejection

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Re: Recommendations after auto-loan rejection


@EddieK wrote:

@bigblue7722 wrote:

@Creditaddict wrote:

I would think you could get much better rate and terms DIRECT at the dealership since you are looking to buy brand new... they specialize with the amount because they sell the car!

 

What are you looking to buy?


im wondering the same thing. Thats a heck of a DP the OP has but thats still a heck of a loan amount with only 77k income. 


While I'd agree if he/she were looking to finance the entire 65K, OP states that they're planning to put down 25-30K, which makes the loan amount 35-40K.  Very reasonable in that aspect.  


Even at 40k thats more than half of the OP's income. A Good rule is around 35% so i would not call that very reasonable. Also, when you are buying a 65k whichever one it might be repiars and general mantince tend to be much higher as well as your insurance, and state taxes if you live in a great state like CT. Idk if it was me i would buy a 40k car put 20k down take out a loan for 20k and pay it off in like 3 years. Having the title in your hand is a great feeling. 

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Message 11 of 14
Established Contributor

Re: Recommendations after auto-loan rejection


@bigblue7722 wrote:

@EddieK wrote:

@bigblue7722 wrote:

@Creditaddict wrote:

I would think you could get much better rate and terms DIRECT at the dealership since you are looking to buy brand new... they specialize with the amount because they sell the car!

 

What are you looking to buy?


im wondering the same thing. Thats a heck of a DP the OP has but thats still a heck of a loan amount with only 77k income. 


While I'd agree if he/she were looking to finance the entire 65K, OP states that they're planning to put down 25-30K, which makes the loan amount 35-40K.  Very reasonable in that aspect.  


Even at 40k thats more than half of the OP's income. A Good rule is around 35% so i would not call that very reasonable. Also, when you are buying a 65k whichever one it might be repiars and general mantince tend to be much higher as well as your insurance, and state taxes if you live in a great state like CT. Idk if it was me i would buy a 40k car put 20k down take out a loan for 20k and pay it off in like 3 years. Having the title in your hand is a great feeling. 


I can see your point, but you should be using overall DTI...he's at 26% right now, with a $600 payment, he's at 35% overall DTI.  Completely reasonable, imo.

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Message 12 of 14
Senior Contributor

Re: Recommendations after auto-loan rejection


@SamsungHDTV wrote:

I think you should wait until you receive the denial letter. Or you can call the banker or their auto finance department and see if they are willing to let you know verbally. Reassure them you just want to know why you were not approved and that you're not upset. Reason why I say this is because lots of bankers hesitate to deliver the denial message because some customers don't take it well.

 

I'm thinking its because you don't have any auto loan history. Some banks don't approve you for over a certain amount no matter how good your credit is if you have never had an auto loan there before. Some banks say you have to have borrowed at least half of the amount you are applying for now. So for example, you applied for $50K, bank A might say we want to see you've borrowed at least $25K. Now this is only a guess at your denial reason, from the information you have provided me everything else looks good. But we will be able to tell more when you get that letter or call to find out.

 

You can try other lenders, but it would be helpful to know the bank was unable to approve you.

 

Hope this helps.


I would think this has a lot to do with it...

 

My previous auto loan was $22k...  I just got approved for a $44k loan with $0 down.  I received a handful of denial letters stating insufficient experience at this amount of loan blah blah... and was also denied a few times for insufficient down payment.

 

The dealer let me drive it off the lot at 9pm when everything was closed... the finance rep said "If I wasn't confident I'd get you approved you wouldn't be driving it off the lot."

 

I got the car at a decent rate considering this loan is twice what I have ever financed and I still have a BK13 reporting for another year.  My plan is to refi next year when my reports are clean.

 

What's funny is the first dealership told me they had to have $7k down to get the loan approved...  the second dealership obviously was more interested in actually selling a car because I got it for $0 down... my dream car.  Smiley Wink

Gardening since: 3-25-15
Message 13 of 14
New Member

Re: Recommendations after auto-loan rejection

Appreciate all the concern and worrying over my financial situation Smiley Wink but I am well aware of the financial decision I'm making, and in no way am I viewing this as an investment. Purely about having some fun -- first ever brand new car! My last purchase was a $1,300 honda civic that I paid for in cash, and she is still running great. But do appreciate those of you thinking about things from that perspective and giving some advise.

 

Just for anyone else looking at a similar situation -- want to clarify... The $65k was an estimate and included taxes and everything else (so my purchase price isn't quite that high). I have the ability to put more down, but based on the relatively low interest rates I was being quoted it didn't make sense to tie all that cash up when I can invest it elsewhere.  That's why I targetted $25-30k down and a $35-40k loan. 

 

Anyway, to Samnsung & TRC_WA's points -- I think it was completely about never having a car loan before, and that I went to a large national bank first.  The regional bank I tried next got me approved for a $35k loan at 4% over 66months, and now the dealer was able to get me a $40k loan and a sub 3.5% rate, just waiting to actually get the final numbers... Wew. I didn't ask for this -- but the dealership actually offered me the option to go as low as $10k down, not sure if I would've been approved for that -- but they offered it up once I submitted my info.

 

 

Probably should have gone with the dealer first, in hindsight? I think someone mentioned it but the dealer is obviously incentivized to get things done, so dumb rookie mistake not to just start there and then see if I could get a better rate once approved.

 

Appreciate all the insight and feedback, and I'll post once everything is official.  Thanks again!

 

Message 14 of 14
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