I'm stuck, no one will finance me - dealership says FICO in the 640-range!!!

[HopeFaith]

Just wanted to post my experience yesterday at the dealer.

Hubs and I went to the KIA dealership today to trade in the car (very little negative equity)... and were told that we qualified for a 9.75% rate through a local credit union. We were very hesitant about this, since we've been declined by Capital One, HSBC, and offered over 22% through roadloans.com. They said they felt we met the criteria, but that they couldn't get an automated approval through their app system and couldn't call them for manual underwrite because they are closed on Sundays. Hmmmm.... well, we told the dealer we wouldn't sign the papers or take the car until we had a solid approval from the bank.

Good thing we didn't take the car home yesterday, because the dealership called back today and advised they could not get us financed! I am so angry, because we have 2-3 new inquiries on each of the bureaus per my montioring service. I am ticked, I told them to stop sending out apps immediately! A good Finance Mgr should be able to look at your credit once and know which bank is best suited for you... not shop your loan around like they're fishing for an approval! I am going to write several letters to the management and ownership of this dealership, I'm not a happy camper.

Good news is, at least we have a fully-functioning car. And although our current rate is 20.99% (!!!), I'm happy to pay my dues until I have a little bit more credit history built-up post-BK. I called our existing bank (Zions) about a refi... they said give it 6 more months of positive credit history and maybe one more tradeline, and I should be eligible for their cookie-cutter rate. I am happy to wait for that!

I am a little confused however... we got our current auto loans the day after our 341 meeting (approved by Trustee), we weren't discharged yet and our credit was MUCH MUCH worse. It did show on the bureau tht we filed. SOOO... how come we had 2 approved offers then, but can't get squat now? Our situation is so much better now!?!?!?!

[HopeFaith]

Wow, I already got a call back from the dealership right after I posted this. They said a company called Sixth Gear Financial will finance us for the following;

23k
$1000 down
6 Years
19%
$537/mo.

Hmmm, let me think about it for a second............ NO.

EDIT: Now they are saying 17% with -0- down, but the payment is similar.

[BassBoy]

Yikes. That's too high of interest and the term is too long IMO. The payments will total $38,664, therefore, $15,664 is the interest paid over the term of the loan.

Glad you said "No."

[sharksfan]

Look for a cheaper car. If your payments are managable with a 21% rate, you will be golden once you are able to refinance at say 10% (or less) in 6 - 12 months. Start with 72 months now. When you refi shorten the term.

Just IMO. We all have to start somewhere.

[jakeinTX]

Credit Report

Couple things to point out,

1st, each time your credit is pulled in a 30 day period for the same type of loan will not hurt your score. For example, you go in to buy a car The F&I Department will look at your credit to determine where is the best space to shop you app to. They try to spread their apps to many different lending places. Sometimes they bundle apps. This means they will go to a bank with two people that have really good credit and one person that has challenges. They tell what ever lender they sent them to if you want the two good ones you have to take the not so good as well.

2nd, like the other person said buy a cheaper car. You are trying to get a decent ride that won't leave you stranded. Keep it around $10-$12k at most and you will have a manageable car payment. The lenders know you cant refile another BK but you can default and they want to see if you will just pay or what they would like is for you to pay and let the less favorable loan run till the end.

Jake

[jakeinTX]

PS...Spot Delivery

Having been in the car business for years, the other thing for someone with a BK to avoid is a spot delivery. All dealers do this, they tell the person heres your car we will let you know all about your lender in a day or so. Just sign this contract and we will take care of the rest. The dealers do this to keep you from continuing to shop if they believe they can make a deal. When you buy a car from late friday afternoon till sunday night if you drive away in the car be prepared that the deal you were told about may not be the deal you get. By the way, don't sign over your trade or take the new car until a verifiable deal is in place. Once you sign over the trade they have bought it and if the deal falls through a week or so latter your car maybe gone! I have watched this happen, all the dealer has to do is give you the cash they would have put into your car which may or may not be enough to buy another car for cash if a problem arrises.

Jake

[HopeFaith]

Thanks for all the input! We decided to just keep the car until we can sneak an approval through Capital One. At that point, we'll either refi or purchase new. I'm surprised they aren't giving me a loan... I had a loan with them for a year that's paid/closed - and have never IIB anything from Cap 1. Hopefully they'll come around soon. If so, we could get our payment right under $200 with a refi!