Credit score and car financing...

[helloedchen]

is there a set formula that lenders use to calculate APR when you finance a car using your credit score?

i'm about to get a car, just want to get a general idea about what i'm going to expect...

 

[RossMAN]

What's your credit score? If you don't know, you can order a copy of your credit report including your credit score for only $12.95 direct from EquiFax.com and you can view it online instantly.

Are you going to buy a new or used car?

 

[helloedchen]

I already received my credit score, just trying to figure out what i'm going to expect when i get a car in regards to financing. I'm leaning towards a new one right now, which i heard yields a lower APR.

 

[Viper GTS]

Originally posted by: GideonX
I already received my credit score, just trying to figure out what i'm going to expect when i get a car in regards to financing. I'm leaning towards a new one right now, which i heard yields a lower APR.

Yes, you'll get a lower APR but the depreciation offsets that.

Buying used is still smarter.

Viper GTS

 

[StageLeft]

Originally posted by: Viper GTS

Originally posted by: GideonX
I already received my credit score, just trying to figure out what i'm going to expect when i get a car in regards to financing. I'm leaning towards a new one right now, which i heard yields a lower APR.

Yes, you'll get a lower APR but the depreciation offsets that.

Buying used is still smarter.

Viper GTS

Agreed. Buying a new car just to make some cash on the low APR is, in almost all cases, a very bad idea from a monetary standpoint.

What "used" car will you be considering? Older the lower the APR. Also what is your credit score?

 

[flyfish]

If your FICO is over 700 you are golden.

 

[helloedchen]

right now im hovering around 600, which i think is average or a tad under. not entirely sure...but i am keeping my options open in regards to new/used. was just curious how dealers/lenders calculate financing in regards to your score.

 

[Mill]

Originally posted by: GideonX
right now im hovering around 600, which i think is average or a tad under. not entirely sure...but i am keeping my options open in regards to new/used. was just curious how dealers/lenders calculate financing in regards to your score.

600 is a good bit below average.

 

[StageLeft]

Originally posted by: Millennium

Originally posted by: GideonX
right now im hovering around 600, which i think is average or a tad under. not entirely sure...but i am keeping my options open in regards to new/used. was just curious how dealers/lenders calculate financing in regards to your score.

600 is a good bit below average.

Millennium is right, but it's also about 80 above millennium

 

[helloedchen]

which is why i asked, i wasn't sure what it was

anyone purchase a car recently with a similar score? care to offer some numbers on what you are paying and so forth?

 

[Mill]

Originally posted by: GideonX
which is why i asked, i wasn't sure what it was

anyone purchase a car recently with a similar score? care to offer some numbers on what you are paying and so forth?

You are going to get raped on your interest rate if it is used, and if it is new your rate won't be very good either. I had a 678 FICO AND a co-signer when I got my Explorer.

 

[db]

Get your loan thru a good credit union.

 

[helloedchen]

Originally posted by: Millennium

Originally posted by: GideonX
which is why i asked, i wasn't sure what it was

anyone purchase a car recently with a similar score? care to offer some numbers on what you are paying and so forth?

You are going to get raped on your interest rate if it is used, and if it is new your rate won't be very good either. I had a 678 FICO AND a co-signer when I got my Explorer.

what rate did you receive? if you dont mind me asking...

 

[RossMAN]

I would go used.

Even if you buy new you won't qualify for all these "0%" or "1.9%" APR offers, they'll most likely stick you with 10.5%

640 and higher is average, I was 648 last summer afraid to look now what it is.

 

[helloedchen]

yea, i'll look for used also. thx for info fellas

 

[Mill]

Originally posted by: GideonX

Originally posted by: Millennium

Originally posted by: GideonX
which is why i asked, i wasn't sure what it was

anyone purchase a car recently with a similar score? care to offer some numbers on what you are paying and so forth?

You are going to get raped on your interest rate if it is used, and if it is new your rate won't be very good either. I had a 678 FICO AND a co-signer when I got my Explorer.

what rate did you receive? if you dont mind me asking...

Used 2001 15k Loan. 6.25%

 

[helloedchen]

cool, thanks for the info

 

[Oakenfold]

Originally posted by: Viper GTS

Originally posted by: GideonX
I already received my credit score, just trying to figure out what i'm going to expect when i get a car in regards to financing. I'm leaning towards a new one right now, which i heard yields a lower APR.

Yes, you'll get a lower APR but the depreciation offsets that.

Buying used is still smarter.

Viper GTS

It may make financial sense in some cases to buy used but to be honest with the way people drive in today's world used cars frighten me.

 

[Pacfanweb]

If a credit union is an option for you, use it. You won't get a better rate with a score like yours.

You can certainly get financed at a dealership, unless you have a repossession on your credit. To get the best rates, banks/lenders like to see 700+ type scores, sometimes 720+.

There is no magical "formula" for getting financed. I've personally gotten people with sub-500 scores financed, and was totally shocked about it.
On the other hand, I once had a lady wanting a used Navigator, with a 520 score and 10,000 bucks down....and she got declined. Nobody could believe it, but we couldn't get her deal done, even with 10k down. She didn't have a repossession or any lates on a car loan.
You never know what will make you attractive or not to a lender.
Whether you get financed with a marginal credit score oftens depends on how friendly your dealer is with the lender, how much you're putting down, etc.
Sometimes it seems that what side of the bed the person processing your loan got up on matters, too.

 

[helloedchen]

thx for the info! i may be able to get to a credit union through work. but i guess it never hurts to try the dealer/lender route, may never know what you might get.

 

[classy]

Being as though I work as a real estate agent I know fair amount about credit scores. Average is about 675 or so. Good credit begins at 700+. Excellent credit is anything above 720. Me and wife personally are at 776 which is pretty good. The best rating is 850. You don't have bad credit but you are below average. Now purchasing a car is quite a bit different from buying a house. Your scores for a car loan to get the best rates don't have to be as high as those if your going to buy a house. If you have low debt you should be able to get a decent rate. Say like the best rate is 9%, you should be able to get 10%. You won't get raped, but you won't get the best rates either.

 

[helloedchen]

currently i don't have any late payments, over limit, etc. type of problems. the only problem i have is a large sum of debt from school loans. do lenders see that as a problem? i have a steady full time job, but its not listed on my credit report. should it be?

 

[Descartes]

FWIW, I got a better rate through Nissan North America than I did through my credit union. I'd say I have average to good credit. I also put down $7k, so that apparently helped reduce the interest rate a bit...

 

[StageLeft]

Originally posted by: GideonX
currently i don't have any late payments, over limit, etc. type of problems. the only problem i have is a large sum of debt from school loans. do lenders see that as a problem? i have a steady full time job, but its not listed on my credit report. should it be?

Don't worry about your job - it will be taken into consideration when you get the loan.

Just make sure that if you're offered a high rate like 10% you don't spend too much on the car because you'll be kicking yourself later when you realize how much money you're paying in interest alone.

 

[helloedchen]

yea, sucks tho, cuz i'm looking at a bimmer but it looks like i may be able to get one for under 20K...but this all depends on the rate i get in the end.