Scores needed for 0% offers

[dynamicvb]

I’ve been thinking about new vehicle and I’m getting 3.9% offers through cap 1 auto navigator. I’m just wondering how much I would need to improve my scores to qualify for the 0% offers some of the car companies are offering. I know I could not get it now as I still have my bk13 on my reports but it will fall off soon.

[Brian_Earl_Spilner]

Google the manufacturer 2018 credit tiers. It will tell you the score needed.

[Medic981]

In general, when financing a car, a FICO score of 700 to 740 and above is considered excellent or tier 1 credit. A FICO score of 660 to 699 is considered average or tier 2 credit. A FICO score of 620 to 659 is considered fair or tier 3 credit. 

When I leased my Subaru, I was told that I needed a FICO score of 720 TU to qualify for tier 1 financing. 

[KDKobes]

This varies greatly depending on the financier in question. Subaru, Ford, Chevy, Dodge, etc all have different tiers with different score levels required. For instance everyone keeps telling me I should’ve got a better lease rate but at the same time I don’t have a 800 score which is required to meet the top tier through Chrysler Financial. To be honest from my experience based on your credit score in your sig that rate is actually spot on. Subaru must have very lax scoring requirements because 700-750 most likely WILL NOT get you top tier anywhere. Top tier is 800.

[Anonymous]

First,

Capital One does offer 0% financing on new or used vehicles.

Secondly, your BK doesn't necessarily remove you from the ability to obtain tier 0/1 financing.

It really depends on the lender, some lender's you can qualify for 0% with a score lower than 700,  but most lender's will require a 700-720+ score for tier 1 financing.

Touching back on what I said about, not all lender's assign a customer a tier based soley on credit score, many lender's use complex algorithm's that place an applicant into a specific tier. These algorithm's consider LTV, PTI, DTI, payment history, past auto history, stability/ability (residence/job time) and so on and so forth. I've seen many people who score in the mid 600's on auto-enhanced models who qualify for tier 1 financing on used auto's simply because they have excellent payment history and a long depth of credit, but they may be carrying high balances on their CC's at that point in time.

Sometime's I feel like people over-analyze auto financing, it is not near as scrutinizing and hard to qualify for as some credit card's, or mortgage's.

[Brian_Earl_Spilner]

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@KDKobes wrote:
This varies greatly depending on the financier in question. Subaru, Ford, Chevy, Dodge, etc all have different tiers with different score levels required. For instance everyone keeps telling me I should’ve got a better lease rate but at the same time I don’t have a 800 score which is required to meet the top tier through Chrysler Financial. To be honest from my experience based on your credit score in your sig that rate is actually spot on. Subaru must have very lax scoring requirements because 700-750 most likely WILL NOT get you top tier anywhere. Top tier is 800.

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Actually, most Japanese automakers have top tier in the low 700s. And while Subaru may have a lower top tier, they are much harder to get financed for compared to Mazda whom Chase is also a captive lender for.

[Anonymous]

Sorry for the double reply but just now saw this,

KDKobes, 800 credit score's are NOT required for top tier financing in the auto industry, that is incorrect information.

Chrysler Financial, (Santander) does not require 800+ scores for tier 1 financing. What probably happened is the F&I manager fed you a line about needing xxx score to qualify, so he could use a more profitable approval instead of 0% financing.

Typically your Manufacturer supported 0% financing will require 700-720 (sometimes 740) for the cut off for top tier fianncing, although some will use an algorithm to tier customer's rather than a score.

VERY FEW lender's even have a published rate sheet showing lower rates for 800+ scores, typically 740+ will give the best rate they offer.

[Medic981]

Subaru's captive lender is Chase Bank. I do not know about other captive lenders or manufactures but I waited until my FICO scores were in the mid 700's before I went looking for financing as I understood that is where I needed to be to get the best rate. 

As I understand it, FICO of 760 gets the same interest rate on loans as a FICO of 800+ these days. As automobile financing is in all practicality a secured loan, secured by the value of the vehicle itself I can see why the FICO scores required for top-tier financing and do not have to be as high.

[KDKobes]

If you go to Dodge and check the fine print where they do offer the 0% finance is states based off an 800 credit score. No one fed me any line. It’s very clear if you read the fine print.

[Anonymous]

Chrysler has no such disclosure, in fact their disclosure say's they use a complex scorecard for tiering purposes which isn't driven off of a beacon score, rather many variables.

Saying that 700-750 FICO scores will not qualify for most manufacturer supported 0% financing offer's, is completely incorrect. The vast majory of manufacturer supported 0% offer's, someone would qualify for in that range.

Chrysler Capital is underwritten by Santander Consumer USA, which uses a scorecard as I mentioned above to place applicants into a tier based on variables such as PTI/DTI/LTV/ stability (res/job time), model year, miles, requested term, installment payment history, etc. They do not simply look to see what your score is and place you in a tier based on that. It's much more complex than that, and many captive lender's use the same underwriting process (scorecard's/algorithms) to underwrite auto loan's now.