when i watch tv or read magazines i see those lexus and mercedes benz commercials offering insane stuff to "qualifying" customers.
what exactly does that mean? i would assume fico would need to be like 760, but what are the other factors that make someone a tier 1 candidate?
at some point i would like to buy a car and i want to qualify for the best.
is there such a thing as walking into a dealership with an 800 credit score and being given a great rate without having to prove income, etc?
The highest tier depends on the company, and some companies will extend their best rates to multiple tiers. If you want to be safe, usually a 720+ score will get you the best rates accross the board, but some more lenient lenders (I believe Nissan is like this), will give there best rates to 620+ from time to time. Just depends on the lender and the time of year.
There shouldn't be a point, ever, that a lender sells a car without verifying proof of income. Credit score is not equivalent to good income. There are young kids with a thin credit file (AUs on their parents accounts) that have 800 scores.
Also, be aware that some lenders classify their best borrowers as "tier 0", so just ask the finance manager to list out the tiers and rates if your salesperson doesn't know.
What the other factors that are important to qualify for top tier? For e.g. min income, max DTI ratio, min down pmt, etc. What are the other factors.
Anyone on this board who has/had experience please share.
I believe that most major auto finance companies base the rate at which you borrow ( tier 0, 1, 2...) on your FICO or auto-enhanced FICO score. Your downpayment, income and DTI% will determine how much they will lend you at that rate.
Just to add my experience to the bunch. I went into Hyundai and they denied me for their finance company because of a $167 medical collection that was 6.5 years old. I went into Suzuki a few days before and they gave me a print out with my EX score of 701. Hyundai wouldn't let me see my score, but said it was 680. They completely denied only because of the collection. I have also never had a car loan so they also mentioned that. Now I am just waiting till the begining of the year for the collection to fall off. It also gives me time to save some more money.
so would it make sense to have a car loan and pay it off before getting the "major" car loan?
i may need a major car loan down the line, im talking about 60,000. not now, maybe a year from now, that's why im trying to do my due diligence and find out everythign i can.
i will be out of the country for 4 months summer 2012, so i gotta do all my preparation and research now
it's all down to the lender but as others said anything above 720 shouldn't even cause a blink or a single question, just approved!
Not Toyota goes to 650
Nissan goes to 595-610 it seems based on the finance manager and pushing!
and really if your income factors out on the util of current debt to new car loan debt it won't matter rather it's for a Plus 2 or a 100k Mercedes... score qualifies and income qualifies you are probably driving away with it!
thank you kindly