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Two new auto loans within a couple weeks?

disdreamin
Established Contributor

Two new auto loans within a couple weeks?

Ah, how things change. Thought we were in for one new auto loan and we are now looking at two. Should SO do one and me the other? Will it matter if we are on both? And how much will the first new loan impact the second (the second is the much larger loan that I'm a bit worried about)?

8 REPLIES 8
aj2121
Frequent Contributor

Re: Two new auto loans within a couple weeks?


@disdreamin wrote:

Ah, how things change. Thought we were in for one new auto loan and we are now looking at two. Should SO do one and me the other? Will it matter if we are on both? And how much will the first new loan impact the second (the second is the much larger loan that I'm a bit worried about)?


Imo, it won't matter much if it is just one or both on either loan, assuming you have similar incomes and similar scores. If one income will cause the loan to be evaluated with a high DTI ratio, then you should likely both be on the loan. If you have future apps where you want DTI to be optimized for one person or the other, it could be advantageous for you to only have one person on each vehicle loan. That is more of a personal call; my wife and I are always joint on car loans.

 

The first loan should not impact the second at all. It typically takes a few weeks for a loan to report, so it likely won't even be showing on your credit reports by the time you app for the second loan. Assuming you aren't getting the loan through the same financial institution, the lender won't even know the first loan exists. If the first loan reports before getting the second loan that could cause some issues, but it would really depend on how much it would effect your DTI more than anything else.

FICO8 as of 4/9/21:
Message 2 of 9
incognitony
Regular Contributor

Re: Two new auto loans within a couple weeks?

I got 2 autos through penfed about 3 years ago that were one day apart 38k and 29k. They charged me .5% higher on the 2nd one but didn't seem to mind doing both but wouldn't go above 40k for the first loan. These were both in my name only.

Message 3 of 9
disdreamin
Established Contributor

Re: Two new auto loans within a couple weeks?

Thank you for the feedback, sounds like we should hopefully be okay. I'm trying for promotional rates on each loan - 0.9% on first loan which should be ~10k and then 0% on second larger loan. Incomes are basically equal, scores should be about the same. SO had one auto loan in their history, I have three, we were joint on the one that's on both of ours.

 

Basically I don't want to mess up the second larger loan since that's where the low interest rate is most important.

 

Message 4 of 9
aj2121
Frequent Contributor

Re: Two new auto loans within a couple weeks?


@disdreamin wrote:

Thank you for the feedback, sounds like we should hopefully be okay. I'm trying for promotional rates on each loan - 0.9% on first loan which should be ~10k and then 0% on second larger loan. Incomes are basically equal, scores should be about the same. SO had one auto loan in their history, I have three, we were joint on the one that's on both of ours.

 

Basically I don't want to mess up the second larger loan since that's where the low interest rate is most important.

 


Is there any way you can do the larger loan first? If so that would help alleviate your concerns, although you should be fine either way. 

FICO8 as of 4/9/21:
Message 5 of 9
disdreamin
Established Contributor

Re: Two new auto loans within a couple weeks?


@aj2121 wrote:

@disdreamin wrote:

Thank you for the feedback, sounds like we should hopefully be okay. I'm trying for promotional rates on each loan - 0.9% on first loan which should be ~10k and then 0% on second larger loan. Incomes are basically equal, scores should be about the same. SO had one auto loan in their history, I have three, we were joint on the one that's on both of ours.

 

Basically I don't want to mess up the second larger loan since that's where the low interest rate is most important.

 


Is there any way you can do the larger loan first? If so that would help alleviate your concerns, although you should be fine either way. 


Only if the vehicle gods smile on me and that vehicle makes it to the dealership way faster than they anticipate. Even then, it wouldn't work because our travel window for the out-of-town order is early August.

 

It turns out the timing will be pretty near perfect though, as I just got back from the sort-of-local dealership and worked a deal for my trade-in and have my name on the exact vehicle I wanted which is already in transit and will arrive in about two weeks. About a week later I'll pick up the other, so I don't foresee an issue.

 

I ended up going with my name only on this vehicle and I'll have my SO do the other one unless they have an issue with the financing approval without me on it. I don't think it should be an issue, but the less extensive auto loan history might be, who knows.

Message 6 of 9
disdreamin
Established Contributor

Re: Two new auto loans within a couple weeks?

So far so good with the auto gods smiling on me. The ordered vehicle came in much faster than expected and I booked my airfare for a week from today to fetch it. Just today I also finalized a deal to trade my current vehicle toward an in-transit vehicle arriving next week at a local dealership. I am at dealer invoice price for the new car (all estimators are showing that vehicle currently averaging slightly over MSRP) and I'm getting ~70% of my original purchase price for my 7 year old vehicle (I paid well under MSRP when I bought it new). Trucks are apparently wildly hot right now.

 

I did shop my current vehicle to two different dealerships today, just to be sure I was in the right ballpark with the first offer I received. One offered $21k and the other $14.5k. I basically asked the $14.5k dealership for my keys back and told them we had nothing to discuss. All in all though I think I did okay given the current market.

Message 7 of 9
mark3038
Frequent Contributor

Re: Two new auto loans within a couple weeks?


@disdreamin wrote:

Ah, how things change. Thought we were in for one new auto loan and we are now looking at two. Should SO do one and me the other? Will it matter if we are on both? And how much will the first new loan impact the second (the second is the much larger loan that I'm a bit worried about)?


I took out two new auto loans about 60 days apart. I also traded in one car an that shows as paid off. When the dust settled my FICO scores remained exactly the same, no change at all. I did pay six payments in advance on each loan before they hit my credit reports. Even if I didnt do that I dont think that would have been a major ding. So overall I was dinged nothing as far as my FICO scores are concerned. Both loans are under my name alone.

Thanks

Mark

Message 8 of 9
disdreamin
Established Contributor

Re: Two new auto loans within a couple weeks?


@mark3038 wrote:

@disdreamin wrote:

Ah, how things change. Thought we were in for one new auto loan and we are now looking at two. Should SO do one and me the other? Will it matter if we are on both? And how much will the first new loan impact the second (the second is the much larger loan that I'm a bit worried about)?


I took out two new auto loans about 60 days apart. I also traded in one car an that shows as paid off. When the dust settled my FICO scores remained exactly the same, no change at all. I did pay six payments in advance on each loan before they hit my credit reports. Even if I didnt do that I dont think that would have been a major ding. So overall I was dinged nothing as far as my FICO scores are concerned. Both loans are under my name alone.

Thanks

Mark


Thank you for sharing your experience. As of this moment one of the vehicles has been applied for in my SO's name only and I'm planning to pick the other up next week and it will be in my name only since the trade was in my name and my SO will be out of town. It's good to know that there may not be much impact if I need to hop on the larger loan my SO app'd for.

Message 9 of 9
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