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Seven Things To Know About Car Loan Credit Reports

Edmunds.comEdmunds.com Posts: 10,059
edited April 2017 in Editorial
imageSeven Things To Know About Car Loan Credit Reports

It's essential to know these credit report basics before you go car shopping.

Read the full story here


Comments

  • ClintClint Posts: 10
    Mr. Eleazer's statement dealers have access to the best financing available is not accurate. Dealers have access to a variety of financing options. However, those options do not always translate to the best available financing. Mr. Eleazer knows the word 'best" is not a word F&I managers should ever use.

    Furthermore, his suggestion dealers are eager to share that financing with customers is very misleading. One thing Mr. Eleazer fails to mention is, while dealers are very happy to have customers finance through the dealership, he fails to mention one of the primary reasons for this is it allows dealers a chance to make a considerable profit. Dealers often add to the interest rate at which a customer actually qualifies. For example, a customer may actually have been offered a 2 percent interest rate by the dealer's bank. However, the dealer may offer the customer a 3 percent interest rate. Of course the dealer and folks like Mr. Eleazer pocket a nice portion of the difference. This is called dealer reserve. It is most successful, from a dealer's perspective, with the more unsophisticated car buyer and with the subprime, people with poor credit, market.

    Finally, new car dealers do not finance vehicles, contrary to what Mr. Eleazer states. The financing institution finances the vehicle and establishes the base interest the customer will have to pay as well as the amount of money which will be included in the loan. The F&I folks, like Mr. Eleazer, use that information to concoct a deal which will result in the most profit of the dealer and the F&I manager.

    Prior to visiting any dealer, a potential buyer should research the financing options available to them as well as the going prices for the vehicle and KBB or other value for any trade vehicle. With this knowledge, a buyer can assure a good deal.

    With proper research, it is almost always a good idea to allow folks like Mr. Eleazer an opportunity to arrange financing. They often really are able to arrange a lower interest rate than the buyer is able to obtain. However, the key is to make sure Mr. Eleazer and other F&I managers do not add to interest rate.

    And always, watch for those pesky document fees.
  • ken117ken117 Posts: 249
    The last person anyone should consider taking advise regarding an auto loan is an auto dealer's finance and insurance (F&I) staff. The F&I person is actually just another sales person usually the best in the dealership. The F&I person has a primary goal of not only completing the deal but to increase the overall profit for the dealer. The F&I person has considerable training as to how to accomplish this goal. As such any advice from such a person is dubious at best.

    The good thing is a knowledgeable buyer is more than a match for the best F&I person in the world. Personally, I always find it amusing to anticipate the next gambit the F&I manager will play. Making a game of dealing with the F&I manager can be a hoot.
  • dansnydansny Posts: 1
    Pure balony! Banks like BofA and CapitalOne offer similiar or better rates than stealerships. And, always ask for a test drive BEFORE signing/filling anything out! And, if the dealer denies your request. Then move on to someone who will, because you're the one who is paying. It could even be a waste of your time just talking about a car that has to be junked or is not for you.

    Buying a car requires lots and lots of patience! It took me almost 5-months to find my dream car and not even have the slightest doubt in my mind of my decision.
  • veeoneveeone Posts: 1
    I just bought a $40K car, dealership ran at 3.99%, credit union beat it at 1.98% - and sold me a warranty for $2900 and GAP protection for $895. Credit union has exact same warranty for $1900 and GAP for $395 - let's see who's screwing who on financing - dealerships! And then to find out that a week later when we were looking at maybe another car purchase for my husband, that they took the information from MY purchase app and ran us to 4 different banks without our permission and they said they took it from the previous app! Isn't that just slightly illegal!!!!!! There's no app on file for that car that we were looking at, nothing signed - nada and they just blatantly decided to 'shotgun' us to multiple banks when we told them the night before we were not ready to do anything with credit or purchase yet? A-holes.
  • Clint-Exactly where in my statement did you read the word "best"? "We generally get rates lower than most customers can obtain elsewhere and the amount we can typically get financed is greater than most local banks or credit unions."

    As to your statement that the "new car dealers do not finance vehicles", one need look no further than the top of a Retail Installment Sales Contract they signed at the dealer and the description in the box where the Dealership name reads Creditor-Seller. That means the dealer IS the originating creditor and therefore IS handling the initial financing until it is assigned/sold to a finance company.
  • darthvader87darthvader87 Posts: 2
    edited August 2015
    #3 is complete BS

    I used to work in retails and used car sales, the reason why they want to run credit check on you because the dealer will get a "kick back" (more money from credit unions) when the car salesman will get an increase in their commission, and the store will look "good" if you perform a credit check, either if you pass or not, or if you want to purchase a car or not.

    Most car salesman do not care about identity theft as long as the information you put down matches your driver license.
  • veeone said:

    I just bought a $40K car, dealership ran at 3.99%, credit union beat it at 1.98% - and sold me a warranty for $2900 and GAP protection for $895. Credit union has exact same warranty for $1900 and GAP for $395 - let's see who's screwing who on financing - dealerships! And then to find out that a week later when we were looking at maybe another car purchase for my husband, that they took the information from MY purchase app and ran us to 4 different banks without our permission and they said they took it from the previous app! Isn't that just slightly illegal!!!!!! There's no app on file for that car that we were looking at, nothing signed - nada and they just blatantly decided to 'shotgun' us to multiple banks when we told them the night before we were not ready to do anything with credit or purchase yet? A-holes.

    a lot of used dealership will run your credit report through many banks to get you the "best rate". that means your credit will be checked up to 10 times.
  • Can a dealership run my credit with out a singed paper if not where can i find it in the books and what can do about it....
  • steverstever Posts: 52,462
    edited January 2016
    You probably found at least some of the following links - the first one is from the "enforcer". Your permission does not have to be in writing for what I've read, so it may boil down to your word against the dealers.

    FTC Staff Advises Automobile Dealers May Not Obtain Credit Reports on Consumers Out for a "Test Drive"

    Impermissible Credit Report Use (Nolo)

    If a credit bureau, creditor, or someone else violates the Fair Credit Reporting Act, you can sue and get damages (Nolo)

    "According to the Federal Trade Commission, a car dealer does not have a permissible purpose to get your credit report if you're simply asking for information about vehicles and prices, or if you just take a car out for a test drive--because at that point you haven't initiated any transaction."

    Car dealer pulling credit report multiple times
    (consumered.com)

    The FCRA at car dealerships: the FTC’s curious conclusions about “permissible purpose” (fcradefense.wordpress.com)


    They ran his credit without approval
    (hanfordsentinel.com)

  • Adrian144Adrian144 Posts: 1
    I owned a home for 18 years, never once late on the mortgage payments. Sold in 2006 and all 3 credit bureaus recently removed this and say I have no recent credit? Then dropped my scores nearly 150 points. I called Equifax explain my situation, I was told the error will be corrected after some month nothing change they were giving excuses Same goes to TransUnion and Experian. I was frustrated I wanted my score back until I came across (Lewis Richarlison) A former Staff of TransUnion who explain and confided to me to consult this credit agency 'Captain Spy' who had helped many repair their credit and that was exactly what I got when I contact his gmail [email protected] he help me increase my score by 200 points clear Items on it Which I confirm on all 3 credit bureaus. I'm really grateful captainspyhacker2 @gmailCOM contact him on +1502-378-7817 if you have any similar issue related to this he will help you out
  • DaverceeDavercee Tampa, FloridaPosts: 102
    Thanks for the tip! Will take note of that.
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