USAA Auto Approval Questions

[kskajohnson]

Has anybody recently used USAA's online application for an auto loan?  It seems pretty straight forward but I had a few questions....

1) Assuming I am to be approved for "x" amount, how does that work in terms of shopping with various dealerships?  Say I apply for $20,000 but only use $16,000 of that....how does that all work out?  What do I take with me to the dealership after approval?

2) I would initially like to apply first without a down payment and hope I would be able to be approved with nothing down.  If I am denied for whatever reason, would I be able to re-apply and attempt to put like 10% down or is the first denial pretty much it?  Basically, Can I apply without anything down but then go back and put a down payment down if necessary?

3)  Any good/bad experiences would be welcome.  I'm not sure what to expect and so any information would be greatly appreciated.  I plan on applying as soon as I close on my new home on March 19th.  Just want to be prepared for everything in terms of applying online with USAA and whether or not that is the ideal move onmy part. 

Thanks!

[Remember0]

1) USAA will probably send you  instructions after approval. Usually they send a draft (like a check) that you take to the dealer. If you're UNDER your approved amount and all other conditions are met (like LTV), no need to worry. The loan will be for the lower amount that you actually borrow. You don't need to worry at all if it's lower than approval haha.

2) Not sure how USAA does it. Typically dealers can play with factors. Consumer side applications make it harder. You could try to recon, but it might be a done deal...not sure. What's your FICO, DTI, income, and util? For a strong credit profile, no dp doesn't hurt at all with most banks.

3) Definitely apply AFTER the ink on your closing papers has dried (I typically wait till after the third day after closing, but that's just my super-careful voodoo, nothing bad should happen after the loan closes). I have USAA can come back with higher than expected rates on strong credit profiles, but this isn't the case for everyone. If USAA gives youo a higher rate than you expect (esp. if they also let you know your EQ FICO is > 675), I'd send an app to DCU. 1.99% for 65 months with EQ FICO > 675 at DCU...but USAA should be fine for your first app. If they approve for top tier rates, it's a great deal. If not, no downside (other than the inq, but that is minimal) and you can apply elsewhere without penalty.

[Anonymous]

I have had two usaa auto loans with the last one been for 42000. I was originally approved for 38000 but called in to up it to 42000. When you are approved for a usaa auto loan you will receive loan documents with all your instructions on how to close the loan. Usaa approves you for a a certain  amount, you then choose the car and if the car you are purchasing is less than your approve amount you pay the difference as your down payment. For example, I was approve for 42000 but the car I purchase was 49000 so I had to pay 6000 down to cover the full amount.

[Remember0]

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@Anonymous wrote:

Usaa approves you for a a certain  amount, you then choose the car and if the car you are purchasing is less than your approve amount you pay the difference as your down payment.

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Just to not scare the OP, I'd clarify and say that you meant "if the car you are purchasing is more than your approve(d) amount you pay the difference as your down payment."

Out of curiosity what rate did you get? And was your FICO mid-600s when approved? Congrats on the Mercedes!

[Anonymous]

Remember0, thanks for catching that and yes you are correct. Sometimes this iPad has a mind of its own! Usaa approved me for a 4.99 apr with a credit score of 656. In addition, I was approved with penfed for a 1.99 apr, but it took them to long to process my application; I was not notified until after I purchased my car. 

[kskajohnson]

Thanks for the help!  To answer a few of your questions (and for me to ask another).

My EQ FICO currently sits at 682.  In terms of income, I will be applying with my credit only but my wife and I do pay all of our bills together and are sufficient upon each other’s income.  Her credit is less than stellar to do some medical issues and a nasty divorce all within the last 4 years so I can’t use her credit as a co-applicant at this time so does that preclude me from using her income? 

I see the USAA online app asks for all income used to repay the loan so that tells me I could use my wifes income included in that amount?  If that’s the case then our income is around 130K per year.  If not, It’s roughly 50-55K for just myself as a graduate student. 

I’m not sure of our exact DTI but I know it’s pretty low.  We only have three credit cards and one has a zero balance, I’d say the utilization total for all of them is around 10-15%. 

Lastly, In the event USAA doesn’t go the way  I had hoped…what exactly is DCU (I’m new to that) but do I have to be a member to apply for an auto loan there or can I just apply? 

Thanks in advance!

[Remember0]

@YHWHUDAH:

Nice rate with USAA! Did Penfed not allow you to use that approval to refi the USAA loan? Regardless, 4.99% isn't bad at all.

@kskajohnson:

I don't think income is an issue here to be honest. We're talking about a 20k approval here. What's your rent and total minimum payments across all cards? But if they don't state that it has to only be yours, I see no issue including household. If they have any problems if they verify, I doubt they are going to reject the loan since the amount is pretty low to be honest. Also is your 50-55k wage income? Or is it like a stipend/scholarship?

DCU is a credit union based in MA (Digital Credit Union). Thet have 1.99% rates for 65 months for people with a EQ FICO over 675 (keep in mind the score they pull can be different than the one you pull from this site). As far as membership, I've seen it recommended to apply for membership first, then auto loan with DCU because sometimes they decline membership for some unknown reason. Never done it myself though, and personally, I would do only auto first, then membership if approved. Would recommend you do it all on one day (you may have to call them to get them to process everything the same day).

[kskajohnson]

Well my wife and I are closing on our new home on March 19th, our mortgage is going to be about $2,400 which is why including her income would help in this scenario as a mortgage that high wouldn’t look too favorable on just my income.  We’ve been renting a home for the past three years at $2300 per month with perfect payment history. 

The number I used for my income might actually be a bit high.  It’s more like 45 after looking at it but that is my work income as well as my VA Disability compensation (yearly totaled into that number). 

In terms of DCU…..Can I apply for membership now a few weeks prior to closing on my new home (i.e. is there any sort of credit pull to open an account with them?). I obviously don’t want to screw ANYTHING up there but if there is no credit implications then I’m not worried about it (unless there is something I don’t know). 

I’m just in a bit of a pickle here and am trying to find out the best plan of action.  Basically I have a 2002 Jeep Liberty paid off in full and I have been wanting to get a newer vehicle for the last 8-9 months or so but put it on the backburner while we built a new home.  My parents are purchasing the Jeep as a gift for my brothers first car (he’s 16) and they are flying up to visit the day AFTER we close on the home.  They are going to be here for 4 days and then would like to drive the Jeep back home.

So basically if that happens, I’m working with a 3-5 day window to get a new vehicle AFTER closing but BEFORE they leave.  So that might explain my interesting situation.  I’m just trying to do whatever would be best.  I’ve pretty much honed in on a few different car types in my budget range, its just a matter of garnering approval after we close and doing so relatively fast.

Also, I know a LITTLE about it but not enough to say I’m educated.  But how do multiple auto loan credit pulls work against my score?  If I was to do say USAA, DCU and a few others all in the span of that weekend following closing---how does that work and what damage will that do to my score? Obviously I want to be approved and at a fair/good rate but just not to the point where it'd REALLY affect my credit score.

Thanks again!!!

[Remember0]

DCU does pull a hard for membership (if it's same day or shortly within, they sometimes use the same hard for the auto). I agree regarding income, with your rent/mortgage at those amounts, it makes sense to give USAA combined income especially since they state all sources.

Do NOT apply for DCU membership or any car loan/credit card/whatever until after closing (heck, to be safe, wait a day after closing if you can, though that's just me being paranoid).

You can definitely find a car in that 3-5 day timeframe after closing. Heck, you could probably do it the day after or 2 days after closing. IMO negotiate car price by email after your home closes and you'll have it done by a day or two (look at the stickied thread here on negotiating by email). And call USAA (and/or DCU) to process your loan ASAP if it's not instant decisions.

The inquiries. Obviously first app to USAA and see. That's only 1 EQ inquiry. DCU is 1-2 inqs on EQ depending on if they use the same one for auto and membership. So we're talking 2-3 inqs. Your EQ FICO will probably go down, but I'd say the damage won't be more than 10 points (realistically less than 5). I do understand you're on the edge though of prime for auto purposes (680 generally), so I see how this can be a concern. Istill think it's better to do USAA by yourself (and DCU if USAA offers you a high interest rate) before the dealer. The dealer will send it out to dozens of banks and you'll wind up with dozens of inquiries. If you don't want that, freeze your bureaus after approval from DCU/USAA and insist the dealer use that imo. But tons of people go auto loan shopping and the inquiry hit is minimal (they only count as 1 inq for FICO if coded properly as auto, but that coding is spotty). I wouldn't worry too much about the inquiries if you apply to a few places...your FICO will survive haha.

And thanks for your service by the way! Random, but out of curiosity, what car(s) are you looking at?

[kskajohnson]

@Rememebr0

Thanks for the help, I really appreciate it.

The primary car that I am looking at is the Chrysler 200.  I went and checked it out a few weeks ago and just like the overall feel in one.  The whole purpose of me getting a new ride however was to improve on the gas mileage front without breaking the bank and unfortunately the 200 doesn't pack that much better in terms of mileage than my Liberty does.

My daily commute for work is 50 miles roundtrip (give or take a few) and so I was trying to find something a little more friendly at the pump....any suggestions?

I'm trying to stay under 20K just for the sake of not looking for a big payment right now as I am finishing graduate school.  It also has to be a full size car, I am 6'2" so one of those boxey cars just won't work for me.