Car Dealership Inquiries

[Anonymous]

I bought a new vehicle a few months ago...

Over the weekend I applied for the venture one mile card and was denied, why.....Because too many inquiries.

The dealership ran my credit with 6 different banks and showed me the best option, so frustrated..SO, so frustrated..

[OmarGB9]

Yea it sucks that even though FICO sees multiple inquiries within 30 days as one, lenders unfortunately do not. Sorry OP. Perhaps try calling a backdoor number and recon?

[FinStar]

---

@OmarGB9 wrote:
Yea it sucks that even though FICO sees multiple inquiries within 30 days as one, lenders unfortunately do not. Sorry OP. Perhaps try calling a backdoor number and recon?

---

Unfortunately, Capital One does not reconsider system-declined applications. 

Sorry to hear about the declined application OP. 

[Anonymous]

This is a practice that really should be illegal honestly. The dealerships are actually shopping for the biggest kickback for themselves more than they are the best rate for you. Hopefully in the future you will get your own financing from a CU lined up and freeze your credit before you go in to actually buy. 

Sorry for the denial. The sting should be gone in a year. 

[Anonymous]

FICO does not see multiple car dealership inquiries within 30 days as one. That is incorrect.

Most FICO algorithms have a 45 day de-duplication window. The 98 model uses a 14 day de-duplication window.

Where the 30 day factor comes in is as a buffer. Whenever you do an installment inquiry, it does not actually affect your score for 30 days.

The reason for this is to allow rate shopping without your score dropping for each inquiry WHILE you’re rate shopping. It would be kind of useless if only the first bank got your best score.

Likewise the de-duplication window is to combine them as if they were from rate shopping as well, So that you’re only dinged once for the multiple inquiries within the 14/45 day period.

Yes the practice should be illegal. They’re not looking for the best rate for you, they’re looking for the biggest kickback for them as noted by @Saeren.

That’s why you should always secure financing before you go to the dealership. Take this as a lesson learned.

At this point, the lender computers see the multiple inquiries and deny you. Even though it doesn’t affect your score with multiple dings for each inquiry, the lender’s computer still sees the number of inquiries and automatically denies it. If it were another lender, you could call for reconsideration and point out it was all from one purchase and probably get reconsideration. But as noted, capital one doesn’t do recon, just another good reason that I do not associate with them.

If you’re not going to secure financing before you go to the dealership, then at least pull your scores, find out which algorithm and credit bureau the dealership uses, and then lock the others and inform them they only have permission to pull from the one bureau.

That way at least only one bureau gets banged up. There shouldn’t be an issue since you already know which bureau has your highest score. The only reason they want to use all three is again to try to find the highest kickback for themselves, not for your benefit.

Nevertheless the best option is to secure financing before you go to the dealership so they don’t have the opportunity to bang up any of your files.

[JGGM]

Regarding the "biggest kickback" comments - you do realize we (dealerships) already know each bank's 'pay plan' right? Meaning if it was only about the dealership's pay - then we'd only use one or two banks.....not 16-20.

Often times - the number of inquiries depends on the credit profile - and not just a score. There is such thing as a 'bad' 740. Some banks view multiple auto loans worse than others, some score inquiries harder than others, some times the LTV is high (think rolling negative equity into a new deal), etc. There's any number of reasons. 

I'm not saying some dealerships do not work the way you suggested, but I do think it's a misrepresentation to say the only reason for the inquiries is to pad the dealer's bank account - if this was the case, you'd have one (maybe 2) inquiries. Also most states have laws that limit rate markup, etc.

At any rate, if inquiries is you're primary concern, just do as other people suggested and arrange your financing before you walk in to the dealership.

[The_Rooster]

---

@Anonymous wrote:

This is a practice that really should be illegal honestly. The dealerships are actually shopping for the biggest kickback for themselves more than they are the best rate for you. Hopefully in the future you will get your own financing from a CU lined up and freeze your credit before you go in to actually buy. 

Sorry for the denial. The sting should be gone in a year. 

---

This is NOT accurate.

I was an F&I Manager in large Dealership for many years.

Dealerships use a system called DealerTrack (or RouteOne) to shop several lenders for the best rate.

There are no "kickbacks" in dealer lending. Some lenders will allow a dealer to hold a point or two, but thats about it. 

The majority o the time, we were simply trying to find the best possibel rate for the customer. If they only submit you to one lender, you may walk away with an APR signficantly higher than if they submitted to multiple lenders and let them duke it out.

[The_Rooster]

---

@JGGM wrote:

Regarding the "biggest kickback" comments - you do realize we (dealerships) already know each bank's 'pay plan' right? Meaning if it was only about the dealership's pay - then we'd only use one or two banks.....not 16-20.

Often times - the number of inquiries depends on the credit profile - and not just a score. There is such thing as a 'bad' 740. Some banks view multiple auto loans worse than others, some score inquiries harder than others, some times the LTV is high (think rolling negative equity into a new deal), etc. There's any number of reasons. 

I'm not saying some dealerships do not work the way you suggested, but I do think it's a misrepresentation to say the only reason for the inquiries is to pad the dealer's bank account - if this was the case, you'd have one (maybe 2) inquiries. Also most states have laws that limit rate markup, etc.

At any rate, if inquiries is you're primary concern, just do as other people suggested and arrange your financing before you walk in to the dealership.

---

Exactly.

The misinformation on this forum regarding dealerships is mind-boggling.

I would NEVER hurt someone's credit just to get a "kickback" (i'm laughing while saying that).

[The_Rooster]

---

@Anonymous wrote:

If you’re not going to secure financing before you go to the dealership, then at least pull your scores, find out which algorithm and credit bureau the dealership uses, and then lock the others and inform them they only have permission to pull from the one bureau.

That way at least only one bureau gets banged up. There shouldn’t be an issue since you already know which bureau has your highest score. The only reason they want to use all three is again to try to find the highest kickback for themselves, not for your benefit.

---

It has nothing to do with the algorithm or bureau that the dealership uses.

It has to do with what algo and bureau the LENDERS use when the dealer submits your file.

If you lock 2 of 3 bureau's, the Dealer will simply get errors instead of Approvals for you, for any of the lenders that use the 2 bureau's you locked.

[Brian_Earl_Spilner]

I don't understand how you got denied over 6 inquiries. What other reasons were given? And I'm gonna assume you mean 6 inquiries on one report.