Trying to understand 20% down on approved loan

[epigurl4credit]

Hi!

I was approved for an auto loan today and I was surprised at the results, but I may be naive! But here goes.... The credit union uses TU. My current TU score is 689. I do have some erroneous late pays from the past year that I did not discover until I pulled my annual report in late April. I have disputed these with Chrysler Financial but have not received word back yet. I went ahead and applied for a loan (now I am thinking "bad move") because I got a deal on the car I wanted and I thought my income, income to debt, low utilization, employment history, excellent payment history on other installment accounts, no collections, score, etc would pull me through. Well although I was approved for 35K at 5.5% APR, I have to put down 20% for ANY car (amount of loan) I purchase. Is this the norm? I have not bought a car since '02 so I am green. Any advice would be appreciated.

The manager told me the underwriter did not like the lates on the auto, and although my score was OK, he approved it with the condition of 20% down. All I could think was D*@$@!!!

[Anonymous]

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@epigurl4credit wrote:

Hi!

I was approved for an auto loan today and I was surprised at the results, but I may be naive! But here goes.... The credit union uses TU. My current TU score is 689. I do have some erroneous late pays from the past year that I did not discover until I pulled my annual report in late April. I have disputed these with Chrysler Financial but have not received word back yet. I went ahead and applied for a loan (now I am thinking "bad move") because I got a deal on the car I wanted and I thought my income, income to debt, low utilization, employment history, excellent payment history on other installment accounts, no collections, score, etc would pull me through. Well although I was approved for 35K at 5.5% APR, I have to put down 20% for ANY car (amount of loan) I purchase. Is this the norm? I have not bought a car since '02 so I am green. Any advice would be appreciated.

The manager told me the underwriter did not like the lates on the auto, and although my score was OK, he approved it with the condition of 20% down. All I could think was D*@$@!!!

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Recent late payments, even a single 30 day late can really make a difference. And if there are multiple recent lates a lender gets very nervous.

If the deal is not what you want I would walk away. Don't put yourself in a bad financial position because of a high down payment on a car. If you don't go through with it all it will cost you is a single inquiry.

From a BK years ago to:
9/09 EX pulled by lender 802
3/10 EQ- 800
6/10 TU -772

You can do the same thing with hard work

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Whats In Your FICO Score

[ngerasimatos]

Based on your score (assuming its a true FICO) I am fairly certain financing through the dealer could yield a better rate and waive the 20% down payment. 

[epigurl4credit]

Yes, its a FICO, no FAKO!!

Should I be worried about the hard pull I now have?

I have really been trying to rebuild my credit.

This will make inquiry #5, 3 are due to fall off early next year.

Just a quickie...FICO late May 599, 6/28= 689. Working super hard! Found inaccuracies, paid down balances, etc. I'm on my way and don't want to stop!!!

[Anonymous]

In my experience, most lenders limit the loan based on the NADA trade-in value of the car.  For example, the terms may be "up to 100% of the NADA trade value" or "up to 120% of the NADA trade value".  So the amount you end up having to put down is based on the price you negotiate for the vehicle.  If you negotiate a good price, there's a chance you won't have to put anything down.

Anyways, I do agree with previous poster that you shouldn't have issues financing with that score and the dealership will likely get you better terms with respect to the required down payment...

[epigurl4credit]

Thanks. No trade in tho. Im going to "bless" someone with my old PT cruiser