Car Dealership Financing Roadblocks

[fstbttms]

Our Chapter 13 closed about 5 weeks ago. I am shopping for a Toyota Certified Preowned vehicle and am wondering what kind of response I can expect when trying arrange financing through the dealership. My credit score is 719, BTW.

[justbroke]

Most of the creditors will look purely at your score and factors affecting your score. For example, factors could include # of inquiries in last 12/24 months, utilization, missed payments, public record, and certainly performance on other vehicle loans. In fact, most vehicle creditors use a specific FICO score known as the Auto Score. However, credit unions will generally use some other form of FICO (straight FICO 9, or FICO 8).

From my experience of having an 700+ Auto Score, you should fare well. The only issue is that interest rates are a bit much these days. I would assume that you would be Tier 1 or Tier 2 and would get the best rates if your Auto Score is the same as your FICO 8/9. The question will also be which credit union score they pull and from which bureau. I'll assume it will be the Auto Score and from Equifax and/or Trans Union.

Personally, I'd shop my auto loan at a credit union first. Don't just let the dealership shotgun your application.

The following is from Naperville Toyota.

Basically, the higher your credit tier, the more likely you can afford your car payment each month and the less of a financial risk you appear to be to lenders. When it comes to Toyota credit lease tiers and Toyota financing tier rates, a credit score of 720 and above is considered “excellent” and tier 1 credit. According to Toyota, this means you “have a long, established, positive credit history.”

• Tier 2: A credit score of 690 to 719, which is considered “great.” It means you “use my credit wisely and never miss a payment.”
• Tier 3: A score of 670 to 689, and that’s “very good.” This tier means you “have a positive credit history with no recent late payments.”
• Tier 4: A good credit score ranges between 650 to 669 and means you’re “responsible with my credit and usually make my payments on time.”
• Tier 5: A fair credit score ranges from 630 to 649 and means you “try to be responsible with my credit but have had some recent credit challenges.”
• Tier 6: Below 630, you get into the poor credit tiers. A poor score of 610 to 629 means you “have a number of issues with my credit.”
• Tier 7: A very poor score of 580 to 609 means you “have significant credit issues or have only very recently established credit.”
• Tier 8: An extremely poor score of 579 or below means you “have an extremely poor credit history or I have no credit history at all.”

https://www.toyotaofnaperville.com/t...t-lease-tiers/

[fstbttms]

My credit union has a 13% and change interest rate for used vehicles in a the age rage I’m interested in.

[shipo]

I would let your dealership shop the loan; two years after my wife's Chapter 7 was discharged, our (then) long term credit union was unwilling to offer her a loan on a new car, our dealership shopped the loan and came up with another credit union offering better rates than the ones we might have gotten had we stayed with our credit union.

Another thought, if you can hold out until the public record drops off your credit reports in 2025, doing so by either limping along with what you've got or buying something good enough to tide you over, you will be in a much better position to negotiate rates. In my case I opted for this plan and drove my old 2006 until last year when I ordered a new car just after my Chapter 13 fell off; I ended up with a loan rate which would have been unobtainable with the public record still on my reports.

[fstbttms]

Good info, thanks. Unfortunately, my current work truck is on its last legs and the replacement I’m looking for falls within a specific age range. A range that will soon exceed the Toyota Certified Preowned (which my wife insists upon) criteria. So I need to buy sooner, rather than later.