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Credit Scores and Vehicle Financing

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Comments

  • damienwgdamienwg Member Posts: 39
    Hey Terry thanks for all the friendly advice. I apologize for neglecting to elaborate, so maybe that's why your so righteously indignant. Lets try to cool you off a bit. First, the gas bill was put in her name without her authorization. The medical bill only became an issue when her mother switched her insurance to her name while she was living at another residence...if we have to dispute it through the credit bureau that gives us strong grounds to have the collection removed. And I know this because its the exact same argument that got the $50 bill removed - it was the ambulance co-pay. She got screwed with the phone bill when her roommate kept it in her name when she moved back home.

    Nontheless, it's been three weeks and this is where we're at:
    -Gas bill has been removed from credit report by having account responsibility moved to her sister. No family court scuffle was needed. We got the letter from the gas company, opened a credit bureau dispute and faxed the gas company's letter.
    -Mystery $50 charge has been removed from credit report by disputing through credit bureau
    -We're still waiting on the paperwork explaining why Kaiser didn't pay the medical bill - they currently have no explanation
    -Some progress on phone bill, but no guarantees to remove it from bureau until it's completely paid, which she is now doing.
    -New Credit Report: 2 positives (student loans), 3 collections (we're still waiting for the gas bill to be updated - likely end of week)
    -New Credit Score: 540
    -Best APR she's been spotted without a co-signer so far: 42 months 14% for 13K (we're looking for cars in the 10-11K range).

    We go to her mother's credit union this week to see if they can beat it with her mom as a co-signer. If I can get her to 48 months 10% I'll be happy. In the next three months I hope to help her get one or both of the remaining two collections (medical & phone bill) taken off so that she can refinance for an even more competitive rate (if possible) or at worst have her mother taken off as a co-signer.

    And I encourage everyone to completely ignore your advice for medical bills. This industry survives by overcharging everyone for premiums, and paying as little as possible on claims. While away at college, I had the experience of having a collection agency contact me regarding $1800 physical therapy bill for an injury that was covered under my insurance. After working on it on and off for about a year I finally got the necessary documenation to prove that the insurance company dropped the ball. The balance of what I was supposed to pay ended up being about $300. Gosh, I'm sure glad I didn't just take the insurance company's word for it and pay the bill like you suggest. I'd be out of $1500.

    Finally, I want everyone to know that applying for a loan in many ways is like applying for a job interview. I have no doubt that without proper documentation proving the credit report marks are incorrect, coupled with strong advocacy proving that she is a responsible individual (college transcripts, clean DMV record, payment records from things not on her credit report, long list of references, etc.) and a well-laid out professional advocacy, that she would not have been approved for the loan she has. Two dealers have been unable to get her financed with their banks, and she's been rejected by CapitalOne and E-Loan. It took just 15 minutes of me talking to the loan officer at her bank to convince her that they should approve her - and they did.
  • rroyce10rroyce10 Member Posts: 9,332
    ....... Like my great Grand Daddy used to say: some people would rather be "right" - than President .......

    **Nonetheless, it's been three weeks and this is where we're at:
    -Gas bill has been removed from credit report by having account responsibility moved to her sister. No family court scuffle was needed. We got the letter from the gas company, opened a credit bureau dispute and faxed the gas company's letter.
    -Mystery $50 charge has been removed from credit report by disputing through credit bureau


    ......... instead of showing a credit bureau "dispute" .. you could have paid the $50, got the receipt, showed it paid and been over it .. lenders get a little suspicious on "disputes" ......

    -We're still waiting on the paperwork explaining why Kaiser didn't pay the medical bill - they currently have no explanation

    ......... this could have been handled on a 25 minute phone call and a few letters/fax's 6/8 months ago .. anytime you let medical bills sit for any length of time, they have a tendency to go south and get lost in the system ...

    -Some progress on phone bill, but no guarantees to remove it from bureau until it's completely paid, which she is now doing

    ......... that's the way phone companies work .. it went into collection and they've written off their books ... phone companies are like Elephants, they have a loooong memory .. they know that "sooner or later" you'll pop-up and they will get paid because of a location move or a change of jobs and you've got to get another phone, all the phone companies are interlinked and some keep a 10 year history ...

    -New Credit Report: 2 positives (student loans), 3 collections (we're still waiting for the gas bill to be updated - likely end of week)

    -New Credit Score: 540

    -Best APR she's been spotted without a co-signer so far: 42 months 14% for 13K (we're looking for cars in the 10-11K range)
    .

    I'm glad things are working out .... but you could of completed the first 3 in 2 days, had the proper paperwork and already been to the credit union with it ~ and she would have been driving 2 weeks ago ...... ;) .... but I'm sure "she" appreciates your hard work in the last 3 weeks ......



    Terry.
  • qbrozenqbrozen Member Posts: 32,891
    So yesterday I decided to apply for a new car loan at capitalone because they are advertising 5.49%. My credit scores varies depending on the provider of the number, but its in the 720 range, and my wife's is in the 710 range.

    They call to tell me I've been approved, but at 5.99. Hmmmm...

    So then I see Eloan is also offering 5.49. I applied through them and got 5.49. Go figure.

    I guess my question is, can the line in FICO be so fine that one place can offer you their top rate while someone else can't?

    '11 GMC Sierra 1500; '08 Charger R/T Daytona; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '08 Maser QP; '11 Mini Cooper S

  • danf1danf1 Member Posts: 897
    The line can definitely be that fine. Also different banks score differently. Some of my banks have a top tier at 700+, some as high as 760+ and I have 2 banks that don't use score at all.
  • jnhjnh Member Posts: 3
    Our daughter (23 yrs.) had to get another car due to her lease ending (she & dad co-leased but dad made pymt). She is a student w/2 jobs & has a mortgage pymt. but can't afford a car pymt.
    We decided to buy the next car instead of lease. Her dad would co-sign & make pymts until she can afford to make them.
    She bought a Toyota Rav4 on 8/20/05 - the dealership faxed us (we live in another state) the joint credit application, it was filled out, signed & faxed back. She drove home with the car late that night.
    Last week she got a letter from Toyota finance saying her credit application was denied (letter said to contact dealer) & got the first billing statement in the mail.
    She called us & said she talked to the dealership & was told to disregard the letter because the finance manager had "fixed" the problem. She asked why hers was the only name on the billing statement & was told she qualified for the loan on her own because of her excellent credit. Toyota finance says the loan is final & can't be changed. None of us understand how this happened or why. She says Toyota knew all along the car was to be a joint purchase. She thought she signed a joint loan application.
    How did she get approved for this loan? No matter how good her credit is there is still her debt to income to deal with. She would be paying out almost all her GROSS income if she paid her mortgage & the new car pymt. Does anyone know if this is legal or if we can do anything to change the loan?
  • danf1danf1 Member Posts: 897
    Apparently, Toyota Financial did not consider her debt to income ratio when they looked at her application. I submit all of my credit applications over the internet. Most of my banks use an automatic approval system that doesn't catch things like debt to income. I got a deal approved today where the person only had 2 items on their credit report for a total of $2,200. No human would have approved it, but the computer read the score and I'm good to go.
  • rroyce10rroyce10 Member Posts: 9,332
    ....... Sounds like Toyota looked at her past and present car loan history ... with Dad paying, she never missed a beat .... if you feel it's super important, get with your daughter and you can be put on the paperwork by calling Yota *direct* .. don't get the dealer involved, it will just slow down the process - and maybe not even change it .......

    Terry.
  • erin3erin3 Member Posts: 3
    Hi everyone. This is a question that I have had on my mind because it doesn't make any since to me. Can a bank deny you a loan even if you have a good job making 2500 a month and have two co-signers. Is it just me or does it seem that the bank or the dealer really doesn't want to work with me. The car itself is loaded. It does have a few miles on it (106,000) but that still shouldn't be a good reason for me to be denied a loan. . . . or is it?
    Erin M
  • jaserbjaserb Member Posts: 820
    Lenders these days are pretty lenient, so if they aren't willing to work a deal there's usually a darn good reason. Put yourself in the bank's shoes. You're going to give someone a 5 year loan secured by a vehicle. If that vehicle already has 106000 miles on it at the start of the loan, there's a very good likelihood that it will have some sort of catastrophic problem during the loan term. If that happens, the car will be worth so little that a lot of folks - especially those with credit problems already - would simply walk away from the loan, leaving the lender with a broken car worth approximately 0. I have an acquaintance who did exactly that recently, and the lender got stuck with a truck that had 190k miles and a bad transmission.

    So why do you want to buy a car with that many miles unless you can afford to pay cash? I'm an advocate of buying hi mile beaters, under two conditions:
    1. You can do minor (and even some major) repairs yourself, and
    2. You can afford to write off the vehicle if it has a major failure.
    I've done this successfully, but I've also been known to put a car up on jackstands in my garage and swap out a clutch. If you need to take a car to a mechanic every time something breaks it's very hard to drive old cars economically.

    I think one of the ten commandments of car buying should be: "Thou shalt not owe money on a car with over 100k miles." You mention that the car is "loaded", which is a good thing on a newish car but not so much on an old one. Loaded means there are lots of things to go wrong as the car ages.

    Just out of curiosity, what kind of car is it and how much do they want? I'd be willing to bet you can find an option with far fewer miles for similar $$$.

    -Jason
  • damienwgdamienwg Member Posts: 39
    ......... instead of showing a credit bureau "dispute" .. you could have paid the $50, got the receipt, showed it paid and been over it .. lenders get a little suspicious on "disputes" ......

    I couldn't disagree with you more, because you're flat out wrong. Following your plan the debt would have stayed on her credit report for 7 years as a paid collection. Our way, we waited 3 weeks got it removed from the report on the grounds that I previously discussed, paid the $50 bill and have both a receipt showing the debt has been paid and a credit report showing that it's been removed. It's okay Terry, you can compliment us where appropriate. Lord knows you have a lot to ridicule.

    To anyone reading, anytime you have a mystery debt on your credit report file a dispute, wait for the results of the investigation and then contact the company to determine if the debt is legitimate and then determine how to settle the debt. If it's been removed pay it immediately so there are no grounds to put it back on, get a receipt and print up a copy of your credit report showing it's been removed...ideally the copy should show the investigation results. If it hasn't been removed and it's been verified as legitimate go to the original creditor or collection agency and negotiate to have it removed and to pay the debt. Even at this stage these collection agencies are provided flexibility as to when you pay, how you pay (incrementally or lump), whether they will remove it or not and under which conditions to remove it. But that's all Act Two and Three. Act One is to make the company prove their claim. You'd be surprised how many companies can't.

    Having a closed collection account isn't a whole lot better than having an open collections account.

    ......... this could have been handled on a 25 minute phone call and a few letters/fax's 6/8 months ago .. anytime you let medical bills sit for any length of time, they have a tendency to go south and get lost in the system ...

    You don't have to tell me about the latter. The Kaiser bill is even more complicated than I've let on, but I can say from my experience, it is never just a 25 minute phone call and a fax or two away from getting an insurance company's to pay claims that they've already denied. And my aunt who has 30 years of medical billing experience will tell you the same thing.

    I'm glad things are working out .... but you could of completed the first 3 in 2 days, had the proper paperwork and already been to the credit union with it ~ and she would have been driving 2 weeks ago ......

    Its the natural tendency of humans or maybe I should be more specific and say Americans to accept a gift for $100 today than wait a week for a gift for $200. It takes a certain amount of discipline and appreciation for long-term benefits to choose the latter. My philosophy is try to do it right first and get it over with. And the benefits are showing. Now instead of having the gas and ambulance collection accounts on her credit report for the next 7 years, having to go through family court, and paying a significantly higher APR and thereby monthly car payment, she's got a credit score 15 points higher (with probably another 10-25 coming when the Gas Co. collection is removed) and has cut the number of negative marks in half.

    ....... Like my great Grand Daddy used to say: some people would rather be "right" - than President .......

    I'd like to be both :)
  • erin3erin3 Member Posts: 3
    The car is a 2001 Chrysler LHS. They want 7150 for it. I guess I understand. But it still seems a little silly as a factor to consider when approving or in my case denying someone for a loan. There are other cars in the dealers inventory that are for the same amount but there just not cars that I could see myself in. (i.e. PT Cruisers, Durangos, Stratus). I guess I'm just going to have to look some where else for a car. The Chrysler use to be a fleet car (used for businesses) the particular business that use to own it, traveled a lot so I guess that's the reason why it has so many miles. I picked the car for the particular reason actually because I know that dealing with a car that used to be owned by a business means that there has never been any real damage. And if there were it would show up on the Carfax report. I just think that if the car had only 99k then I would have been approved. A thousand and six mile difference.
    ~Erin
  • isellhondasisellhondas Member Posts: 20,342
    In your case, I think the bank was just being smart. The car you want and the other cars you mentioned aren't known for great long term reliability,

    A clean Car Fax report doesn't mean much either. A lot of "fleet" cars receive minimal maintenance.

    You may have dodged a bullet here.
  • jaserbjaserb Member Posts: 820
    Assuming you put 12,000 miles a year on that LHS, by the end of a 5 year loan it would have 166,000 miles. I don't know anybody that owns a Chrysler product with over 150k miles that's still on its original transmission. I'm sure they exist but it's not a bet I'd like to make. For around $7k, you would be much better off with something simpler and more reliable, with lower miles. Even if it's something you "can't see yourself in" at that price point it's a lot better than walking once your loaded up high mile ride conks out.

    For small cars, Chevy Prisms and Mazda Proteges are a lot of bang for the buck. Maybe a Ford Focus or a Hyundai Elantra, if you can find one with plenty of warranty left. Civics and Corollas are nice, but pricy. If you need something bigger the Ford Taurus, Buick Century, and Chevy Impala are all pretty good deals. There are lots of decent cars out there in this price range, so I'm sure you can find something with a lot more life left in it then that LHS. Good luck!

    -Jason
  • rroyce10rroyce10 Member Posts: 9,332
    .... ** couldn't disagree with you more, because you're flat out wrong. Following your plan the debt would have stayed on her credit report for 7 years as a paid collection. Our way, we waited 3 weeks got it removed from the report on the grounds that I previously discussed .... **

    I think you kinda missed my point, or either I wasn't very clear (as usual) .... I would have made the payment, got the receipt, got the loan -and then- filed for the discrepancy ....

    All that said, you did the right thing with a plan and then followed through with it - most don't ........ by the way, the "7" years stuff is an Urban Legend .. a credit history can show forever, I've seen Montgomery Ward credit cards from 1985 and college loans from 92, it's up to the consumer to check his/her credit every 6/8 months -- especially nowadays with identity theft and internet purchases .........

    you did good ...............

    Terry ;)
  • anonymouspostsanonymousposts Member Posts: 3,802
    It's the law. If you have negative information on your credit report that is older than 7 years you should dispute it. The only negative reporting that can stay longer than 7 years is a bankruptcy. There are federal laws that stipulate the rules.
  • rroyce10rroyce10 Member Posts: 9,332
    .... **There are federal laws that stipulate the rules** ........

    Thats nice in a perfect world, but we don't live in one .. the Mayor of New Orleans and the Governor of Louisiana certainly proved that, but that's a topic for another time and place ... in the meantime, probably 75%+ of the consumers run around with 8/15 year old historys on their credit reports - I've seen ttttthousands of em' ....



    Terry ;)
  • damienwgdamienwg Member Posts: 39
    We went to the credit union and with mom as a co-signer we got her approved for 12% for 60 months. Her Experian FICO is lower than her Experian score by 20 points, probably because Sallie Mae just added about 2K to her student loan debt, by dispersing this semester last week.

    I'm satisified with 12% 60 months for the next 2-4 months. 12% is far from great, but not as bad as it could have been, and at least the payments are spread out to 60 months, compared to the 42 she got spotted by herself. The 2-4 months will give her enough time to clear off those negative marks and pay off some principle so she can refinance on her own. I just hope I can talk her out of getting the 12K Altima (her dream car) and into getting the 9K Jetta...both are about 2.5K below Blue Book trade-in value, so they're great investments. I just don't want to see her stretched any thinner than she has to be. I'd much rather her pay off a good 2-2.5K on the Jetta and trade it in in 6-12 months for a similar or even brand new Altima she's currently considering, leaving her, after trade-in, with just ~8-11K to finance. I'll be busting my [non-permissible content removed] looking for a private party Altima at a steal though. Ultimately though, it's her money so if she wants to pay $70 extra a month, it's not taking food off my plate - at least not directly. :confuse:
  • damienwgdamienwg Member Posts: 39
    Our daughter (23 yrs.) had to get another car due to her lease ending (she & dad co-leased but dad made pymt).

    For a young person you absolutely should buy your first car Me and my girlfriend had this whole discussion and really it came down to where does she want to be 3 years from now. She could either get a similiar or same model 2-3 year old vehicle now, investing $5-7K into it over the next 2-3 years and then buy the new car she wants at about the same payment. Or she could lease a brand new car now, essentially spend the same or similar amount on the car monthly, be limited in her mileage and have nothing to show for it in 3 years - back to square one.

    Leasing is best for people who are affluent and/or self-employed. The latter allows them to write off the vehicle. For first time buyers or buyers with little to no capital it's a horrible decision.

    Also, and someone correct me if I'm wrong, it's much more difficult to get financed for a lease than a purchase.

    Now regarding the Toyota dealership...how thoroughly did you read the loan papers? When you finance through a dealership you have to go through that loan contract with a fine tooth comb. If anything even hints that you're "subject to loan approval," you tell the dealer to call you when the loan has been approved and they've got the monthly payment books to give you. Then you go home and wait for their call. Do NOT drive that car home! Its hard to leave it, I know, but essentially what a lot of these guys do is sell you a car more expensive than you can afford (well they all do that really), making you believe that you can afford it by showing a sheet of paper with a rate they know you won't get approved for, have you sign for the car, take it home, and in 2-3 weeks slap you with the real rate and/or ask for more money down, which isn't anywhere near as attractive. It's probably the most used and most abusive car dealership scam going.

    My advice, and I have no idea if it is possible is to go to your local credit union, explain the situation to them, and see if they would consider allowing you to refinance through them. If you can't do it now because it is too soon, they should be able to tell you at the very least when you could. To my knowledge it is not illegal if the loan contract you signed states anything like "subject to loan approval."

    Either way, I'd figure out exactly what happened, and if you don't feel satisfied with their explanation go to your local news station, consumer advocate groups, Better Business Bureau and state consumer protection agency and scream bloody murder.
  • rroyce10rroyce10 Member Posts: 9,332
    ... ** 2-3 weeks slap you with the real rate and/or ask for more money down, which isn't anywhere near as attractive. It's probably the most used and most abusive car dealership scam going** .....

    Oh - my - gawd ..... you didn't print that with a straight face, did you ..? ...... that is probably the most naive statement I've ever read at Edmunds ....

    Terry.
  • steine13steine13 Member Posts: 2,818
    Damien,
    Have a seat, my son.
    We need to talk.

    "[..] but essentially what a lot of these guys do is sell you a car more expensive than you can afford (well they all do that really), making you believe that you can afford it[..]"

    "Upselling" is part of almost every retail situation, from McDonalds -- do you want fries with that? -- to getting cable TV. But nobody can "make you" buy the more expensive car; this is supposed to be a transaction between adults.

    "[..] by showing a sheet of paper with a rate they know you won't get approved for, have you sign for the car, take it home, and in 2-3 weeks slap you with the real rate and/or ask for more money down, which isn't anywhere near as attractive. It's probably the most used and most abusive car dealership scam going."

    That's just silly. Some sleazy dealers out there may try that on their more hapless customers, but it's not a good ploy. You see, if the customer refuses the new terms, he or she gets to bring the "new car" back. The car they've been riding around in for "2-3 weeks" and have been smoking in and getting it dirty and driving maybe 4-800 miles in... the dealer does NOT want that car back. It's technically new in that it hasn't been titled yet, but it's gonna be a bear to sell.

    The dealership will lose money if they do this a lot. They're not in business to lose money.

    If this ever happens to you, just go and take the car back. I think you'll find they'll make the original deal work, even if they have to pay money to the bank to do it.

    Usually what happens is the dealer puts together a shaky deal, sends the customer away in the new car so they don't run to the competition, and lights a candle at Our Lady of Internal Combustion and prays the loan doesn't bounce.

    I'm not in the business, and I know what I know from listening to the older boys here on this forum. And I believe you're barking up the wrong tree, and that you would be better off listening and learning for a while rather than dispense advice. This is not a put-down. If you think about the situation for awhile, I think you'll realize that what you allege is not likely to make a car dealer any money.

    Peace,
    -Mathias
  • manamalmanamal Member Posts: 426
    And, if you can not make the deal work now (after the original financing fell through), consider that you had 'free' use of a new car for several weeks. I can assure you (not being in the business), that the dealers hate to see a deal go bad after a few weeks even more than the buyer does. No money out of your pocket, money out of thier pocket.

    Right Terry?

    What I don't understand is, in marginal cases, why do dealers do spot delivieries? I guess if one dealer does not do the spot, and the next one does, then the next one gets the sale.
  • danf1danf1 Member Posts: 897
    We spot deliver because we don't want you thinking too long about your deal. Regardless of how much we are or are not making on your deal, if you go home over the weekend, talk to your neighbors, parents or consult the prices paid forums here, somebody will tell you that you are getting ripped off.

    As a F&I person, I am expected to be almost perfect. It is ultimately my decision whether or not to deliver a car. I cannot let emotions get involved. The managers will sometimes plead with me to deliver, but if I'm not comfortable with something, the deal will wait. Nobody at my dealership has the confidence in their knowledge to override my decision as I am rarely wrong. Even on the last day of the month when the store needs that 1 more unit. If I can't get it approved, it is no good.

    Now I know of other dealers in my area that are a little bit more lenient than my store is, and they seem to put people out in cars that I shudder to think about doing without an approval in hand, but they have their practices, and I have mine.
  • jnhjnh Member Posts: 3
    By leasing the car (02 Jetta GLS wagon) for our daughter we were able to put less down & have a little lower monthly payment & it gave our daughter a new, safe, dependable car after she moved from CA to Oregon to start her job & school. Yes, your paying for the use of a vehicle you will not own at the end of the scheduled lease termination.
    Fortunately for us our daughter was very responsible with the mileage, at turn in her mileage was 44,641 (contract was 48,047) so we were not charged with any excess mileage & she kept it very clean. We received a refund of $513.37 from VW credit. However, we had to get another vehicle for her.

    The Toyota loan credit application that was faxed to us (in CA) required my husbands s.s.#, gross monthly income & signature. The car purchase was made in Oregon so we didn't read the loan papers but our daughter said the dealer knew it was a joint venture and she believed the paper work was done accordingly. The loan amount & monthly payment is exactly the same as quoted to our daughter & they did not ask for more money or a higher finance rate.
    When my daughter got the letter from Toyota Financial stating her loan had not been approved she contacted the dealership & was told by the finance manager that she could disregard the letter because he had fixed the problem and the loan was approved, when she asked him why the billing statement was in her name only he said the loan had been approved on her credit alone. How or why the paperwork went from a joint application to a loan in our daughters name only is still a mystery.
    She did talk to Toyota financial & was told the loan could only be changed by refinancing. Toyota did agree to add her dads name to "her" account and starting with the next payment due send the statement to her dad.
    It just seems really strange that her dad signed paperwork to buy this car with her and somehow it ends up in her name only. At the very least I think the dealership owes us an explanation as to how this occurred.
  • danf1danf1 Member Posts: 897
    Did your husband sign a contract or just the credit application? If he didn't sign the contract, then apparently they did not need him to sign for her. They probably did that in order to save themselves aggravation with sending paperwork all over the country. If I can get a deal done with a buyer in front of me, that is always my preferred method.
  • mrscmrsc Member Posts: 2
    I make 41K (before taxes).

    I want to trade in my 96 Maxima (I fully own it), for a 02 GMC Yukon (financed).

    If my credit score is 500, it would be a miracle.

    What do you think are my chances of being approved for financing? Should I assume that the interest rate will be Extremely high?

    I am terrified!
  • mrscmrsc Member Posts: 2
    The dealer is asking for $18,995 for the Yukon. My cars trade in value should be around $3000 or a bit less.
  • manamalmanamal Member Posts: 426
    I am guessing that your interst rate will be high. A score of 500 is very low.
  • jnhjnh Member Posts: 3
    I looked at it again...it was a joint credit application.
    However, it was made clear to the dealer that the car was to be purchased jointly. Dad was paying the down payment & he was/is the one making the monthly payment.
    Our daughter has good credit but not enough income.
    All the dealer had to do was fax through the contract for a signature. Why have him sign a joint credit application at all?
    Our daughter said she did not know the contract she signed was anything different than what had been talked about. She did tell us the dealer looked at her credit application & asked her if that was all she made and if she had another source of income like a trust fund.
    She said she made it very clear that she did not earn enough to buy the car on her own & she did not have a trust fund. She said she told the dealer her Dad was making the down payment on the car.
    She was very upset when she got the loan denial letter from Toyota Financial & after her conversation with the dealerships financial manger. She feels like they just disregarded everything that was discussed prior to the contract signing & feels she let us down.
    It may have been less aggravating for them but it was not what we wanted and in the end they have lost a service customer.
  • danf1danf1 Member Posts: 897
    If they were going to do it in just her name, then they should have explained that to her. I can understand your frustration with this. It does seem that they weren't listening too well. On the other hand, no bank that I know of will accept a faxed contract. They are 4 or 5 part carbonless copies and all lenders require original signatures.

    I'm not trying to defend this dealer's actions, just trying to make sense of it for you.
  • isellhondasisellhondas Member Posts: 20,342
    I'm sorry, but I have to ask...

    WHY a gas guzzling Yukon?

    In addition to high car payments, you will be getting 14 MPG if you are lucky!

    And, yes, you MAY get financed but you will definatly be paying a very high interest rate. do you really want to do this?
  • Kirstie_HKirstie_H Administrator Posts: 11,147
    Do you have any additional cash, apart from your trade-in vehicle, to put down on the Yukon?

    MODERATOR /ADMINISTRATOR
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  • erin3erin3 Member Posts: 3
    I didn't get the car that I wanted. I ended up getting a 2002 Mustang with about the same features as the Chrysler. I actually got it at a better deal for the type of car that it is and don't worry the bank didn't deny me this time because it only had 60k in mileage. I really do feel that I made a better deal with this car. Thank you everybody. I appreciate the help. I felt kind of like the bank and the dealer was trying to rip me off with this being my first purchase of a car and everything, but I guess you just have to understand that not everybody is trying to scam you. :shades: :):D;)
  • angela22angela22 Member Posts: 3
    Long story short: i have terrible credit. :cry:
    After living in NYC for 3 years and going completely broke (in fabulous shoes), my FICO score is a dismal 540. Now that i am in my mid-20's and finally realized that new york city is a marketing scam, I have moved back to the suburbs to live with my parents. :sick:

    My situation is this: I have been working at a high profile company for 1 year and two months. I just got promoted with a raise and am making 40K a year. Sounds fine, but my credit report reads like a public service announcement for irresponsibility. I have a judgement, charge off and defaulted student loans. All of which I have been paying off for the last year. In March, my student loans will no longer be in default status, which will improve my FICO score considerably.

    I was sticking to my budget and the clouds were starting to part, but my current 10-year-old honda accord is dying -- and i truly believe wants to take me with it to the grave. I mean, it's basically a death trap. There is no way i can wait until March for my credit score to improve before i get another car.

    I would like to purchase a newer used car (toyota corolla or honda civic) for around 15K, but am worried i will be laughed out of every dealership. Can I even get financing? I have gathered around 3K (sympathy money from various family members) for a down payment, but have no possibility of a co-signer.

    My questions are:
    1. Is there any hope of financing for a person in my situation?
    2. Should I attempt to apply for e-loan or capital one financing if there is a possibility of them rejecting me, thus driving my score even lower?
    3. If i get a financing at a horrible rate like 21%, could i refinance in 6 months if my FICO score improves?

    I know there are way bigger problems in the world, but I'm starting to get really depressed.

    Help?
  • michaellnomichaellno Member Posts: 4,120
    I'm sure you'll get much better advise from others, but let me attempt to answer your questions:

    1. Is there any hope of financing for a person in my situation?

    ANS: With $3K down on a (presumably) $15K car, I would think your chances are OK. If you drop your price point to, say, $10K, your chances would improve.

    2. Should I attempt to apply for e-loan or capital one financing if there is a possibility of them rejecting me, thus driving my score even lower?

    ANS: You might try a local credit union with ... they have some of the better rates available. The bank you do business with might not have the best rates, but you can talk to them directly and explain your situation. Might help, might not, but it can't hurt to ask.

    3. If i get a financing at a horrible rate like 21%, could i refinance in 6 months if my FICO score improves?

    ANS: Absolutely. As has been explained many times, you can always look to refinance after 3/6/9 months to lower your payment. If nothing else, paying on the original loan ought to help raise your credit score.

    One other comment I have is that you are picking the right cars .. something small, inexpensive and reliable. Cannot stress the importance of that last adjective .. you should keep this car for a long, long time, and a Civic or Corolla should fit the bill to a T.

    Now, I'll throw it over to the experts to see what they have to say.
  • rroyce10rroyce10 Member Posts: 9,332
    .. ** What I don't understand is, in marginal cases, why do dealers do spot deliveries? I guess if one dealer does not do the spot, and the next one does, then the next one gets the sale ..... **

    I been a little busy the last couple of weeks, but this is a good question and I wanted to answer it .....

    Losing the deal to another dealer is only part of it .... ya hafta remember, there is 3 different credit bureau's .. Equifax, Trans union and Experian .. someone could have 580 on one, a 550 on another and a 625 on the other bureau .. if you go to the other credit range, it could waiver between 750 and 820, it all depends on the barometric pressure and who the Atlanta Falcons will be playing against on Sunday ...

    See .. some lenders use Equifax, some use TransUnion, some use all 3, some use 2, some throw them up in the air and take the first one they catch and some use NCB which is a national combination based on the alignment of Venus and Saturn and very popular with mortgage companies (this way they can charge you that extra eighth or quarter point, or more in closing costs - or both) ..... keep in mind, it ain't like it was 6/7 years ago when lenders could read through a credit report, most bank reps today can't read a bureau, they don't even understand them - they only go by the Fico and their corporate "guidelines" ......

    Dealers also have to depend on the "proper" information they receive from the customer and here's a perfect example ..... - I had an "ex" Congressman (well known I might add) that was flipped in his current vehicle by $7,000 .... and when I pulled his credit, 2 reports were almost alike and showed puuuurfect .. *but* .. ~ TransUnion showed a foreclosure that was 3 months late and an "opened and closed bankruptcy" .. meaning, he started the process 6 months ago then never proceeded with it, .. *but* .. ~ he's been current on all of his bills and his debt ratio was ok, except that darn foreclosure was showing up and that score was 75 points less ..... when questioned about it, he responded: "it was just a rental property and handled by a management company, it was no big deal and their error - blah, blah, blah" ... (hmm, a rental property worth $600,000 and it's no big deal.??) ....

    So, I said I would do the deal .. *but* .. I needed $10,000 down to cover the negative equity plus the taxes and flea's, and that still put him $5,000 over MSRP and the documentation on the "management company" ... it's still a risk (in my mind) to the lender .... long story short (too late) I finally got him approved after 4 days with 2 of my best finance guys working on that deal night and day (who by the way, are stronger than the 82nd Airborne in a fire fight) and then pulling some strings with the lenders, and it didn't hurt throwing them 160 A+ deals to go with .. *but* .. 5 out of the 7 lenders did a "pass" and the other 2 wanted to be at 9% for 66 months ... see, Mr. Washington DC wouldn't pay that 9% ....... "That's ridiculous ....! ..... I can get 6% anywhere.!" ..............

    That was 3 weeks ago, and last night I saw him at the Chart House and still driving that miled-out Benz .. I guess he couldn't produce the documents, the money -- or the 6% ..*but* .. I did see the foreclosure sign on his "rental" property ...l..o..l.....



    Terry ;)
  • jlawrence01jlawrence01 Member Posts: 1,757
    I know that this is a radical idea ... why don't you buy the car that you can afford now ... like a $3,000 car. There are plenty of reliable cars that will get you back and forth out there. (I drive one everyday.) That will allow you to save the money to buy a better car down the road.

    I just don't think that the prudent solution to being in debt is to take on more debt.
  • danf1danf1 Member Posts: 897
    Or buy a $6,000 car with a 50% down payment. That will give you some good reestablishment on your credit report (assuming you pay as agreed) and probably get you a more reliable car than $3,000 will.
  • angela22angela22 Member Posts: 3
    Thank you all for the useful advice...

    You're right, more debt is the last thing i need right now. But, my job is secure and I have a lot of things I would like to accomplish in the next 12 months that require a reliable car.

    I have had so much car stress in my life for the past 8 months that i just want a truly reliable car -- especially with winter coming. I thought getting a car that would last for 8 or so years would relieve that stress for a bit.

    I suppose my biggest problem with buying a car that is less expensive car -- that may only last two or three years -- is that it will come up with a lot of service problems. I would rather pay a ridiculous car payment on a vehichle I will have for 8+ years than pay my mechanic to fix whatever breaks on the 7-year-old car I could buy for $3-6K. For instance, I really don't want to shell out $700 to fix a transmission on a car that may need a new radiator 3 months later. Or, is that the price I should pay for my irresponsibility?

    I guess the new question is, for my long term car, credit and personal goals (the latter would have to be put on hold), is a $3-6K car the best option for my situation?

    Any advice is appreciated.
  • jlawrence01jlawrence01 Member Posts: 1,757
    If you want to buy a $12k car ... and pay the 20%+ interest and be in debt for another 3-4-5 or more years, you are an adult, you can do it. A lot of people do every year. That is why the bankruptcy filings are up big time in recent years and why credit counseling is so popular these days.

    In the 30 years that I have been driving, I have never paid over $7k for a car and I make it to work everyday with no problems. Whether a car is reliable or not is more dependent on whether you maintain the vehicle or not. On my current vehicle, I have spent about $450 this year on repairs and maintenance and it is a '96 Olds with 112k miles. I spent about $800 last year.

    Sure, if you drive an older $3-6k vehicle is surely not going to impress anyone nor is it going to be stylish ... but, oh well
  • steine13steine13 Member Posts: 2,818
    A $3k car that is going to be reliable is not esay to find.
    Mind you, a car that's WORTH $3k is no problem, but 80% aren't for sale, 10% are for sale because of some trouble, and 10% are fine and the asking price is $5,800...

    I'm in favor of the $3k cash car, but I think the best bet is a $6k '02 Taurus with 60k or so that has been maintained. Plenty of car, plenty of life left, good reliability, and cheap to fix if and when.

    If it's gotta be new; Corolla or Civic and a long loan and ugly payments. No experiments, and no EX's either; low price and simple equipment is the key here.

    Good luck,
    -Mathias
  • Kirstie_HKirstie_H Administrator Posts: 11,147
    I'm with the $6K car crowd, for several of the reasons mentioned above. As danf1 mentioned, by financing the additional $3K, you'll help build a positive credit record as you pay it off on time, and the payments are just not going to be that much. And as steine13 said, there are many more $6K vehicles available for sale than $3K cars, and you've got a lot more options in choosing a reliable vehicle.

    Purchasing a used vehicle will also help you keep your insurance costs lower than if you buy new.

    If you look through our topic called Used Vehicles: Best Values, you'll see a load of suggestions in your price range, or you can post a new question and we'll give you more ideas. The Taurus, Chevy Prizm, Mazda Protege, and Honda Civic have all been listed many times as good value used vehicles that traditionally have very reasonable maintenance costs.

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  • jaserbjaserb Member Posts: 820
    "Mind you, a car that's WORTH $3k is no problem, but 80% aren't for sale, 10% are for sale because of some trouble, and 10% are fine and the asking price is $5,800..."

    Truer words have never been spoken. The holy grail at $3k is to find a car that has a good enough reputation, condition, and maintenance history that you can expect to get another 50k or so out of it with no major expenses. That's a tall order for average joe car buyer, who doesn't really have the background or experience to figure out what is and isn't a good deal at that price point..

    A 6-8k, low mile, underappreciated domestic (Buick Century, Ford Taurus, possibly a 2002 or newer Focus) is probably your best bet. Used Accords / Civics / Corollas in that range are going to be old, miled up, beat up, or all of the above. Keep the financed amount low enough that your likely 21% interest rate won't kill you, then pay it off ASAP and enjoy the beauty of payment free motoring.

    -Jason
  • kyfdxkyfdx Moderator Posts: 235,200
    Gee... I agree with everyone else.. go figure...

    Actually, getting a car anywhere from $6K-$10K would be ideal for your situation.. You have $3K to put down, so you shouldn't have any trouble getting financed.. Also, with only $3K-$7K financed, the total interest won't be that significant, even at high rates.... And, you feel you could handle the payment on a $12K loan, so there should be plenty of money left over for maintenance and repairs...

    If the $6K car just doesn't work for you, their are a lot of nice cars in the $8K-$10K range... Used Prizms, Proteges (my favorite), and Tauri/Centurys/Aleros, etc... Those would be relatively late model cars, that although out of warranty, should be reasonably reliable for at least three years..

    At that time, you can reassess your financial situation.. You should be many thousand dollars ahead in depreciation and finance expenses over buying a $15K car.. And... if it turns out you were overly optimistic about your finances, you won't be in another bad situation, like over the last few years..

    Hope for the best, but plan for the worst..

    regards,
    kyfdx
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  • angela22angela22 Member Posts: 3
    I think it's been firmly established that a used car in $6-10K range is the way to go. I appreciate all the advice -- it's great advice that I didn't consider, but needed to hear.

    So my new question is sort of complicated and I'm not sure if it belongs in this section, but here it goes:

    What are my best used car choices. I'm hoping for specifics. What year and how many miles should it have? A few that were mentioned are the Mazda Protege, Chevy Prizm, Ford Taurus. That's a great start, but after some online research i've noticed that (other than the Taurus) most of these used cars mentioned are not widely available in my area -- at the local dealerships were I could actually get financed.

    I have a feeling that an aggressive car salesman might push me into the wrong direction if they don't have any of the cars mentioned. I don't want to make a mistake by spending too much money on a car past its prime. ;)
  • jaserbjaserb Member Posts: 820
    If you buy a car you hate there's a good chance you'll get fed up and dump it for something really expensive. Drive a few of the cars mentioned first before you commit to anything, so you'll know whether or not you can live with it. Lots of people like the Chevy Prizm, for example, but I rented one for a week and just couldn't get a comfortable driving position.

    As for mileage, most cars have a fairly expensive service due at around 60k miles, especially if they need a timing belt replacement. New tires, belts, hoses, transmission flush, etc. are all generally needed at about that range. So if you buy a car that has over about 50k miles either make sure it has had the 60k service done (and has new tires, etc.) or use that as a negotiation tool.

    Some specific models / years:
    2000+ Ford Taurus. Big, roomy, comfy, not real exciting. There are 2 engines, both 3.0 V6s. If it has a decal on the side that says DOHC it's the good engine, if it says FFV or there is no decal it's the not so good engine. Both engines are fairly reliable, but the DOHC has much more get up and go, without hurting gas mileage. If you don't get the DOHC motor make sure you get the car really cheap.

    2001+ Ford Focus. Nice smaller car. Avoid the 1999-2000 models that had a ton of recalls. One nice thing about the Focus is you can get everything from a 3 door hatchback to a station wagon. My favorite is the 5 door hatch or ZX5. Nice looking and very practical.

    2000+ Nissan Sentra. Not the best looking small car, but it's cheap, reliable, and good on gas. One major bonus is that the engine has a timing chain instead of a timing belt, making the 60k service cheaper. The SE-R and 2.5 Limited Edition models have the bigger engine from the Altima, which is powerful but really sucks gas. The standard 1.8l motor is probably fine.

    2000+ Mazda Protege. The pick of the litter if you like to drive, and it's sharp looking to boot. In 2002 they got a 2.0L motor in place of the old 1.6 which was a bit gutless, especially with an automatic. The Protege5 wagon is a real looker but is a bit pricier. I see 2002-2003 sedans with asking prices in the 8-9k range all the time. In 2003 (I think) Mazda went to a 4-yr 50k mile warranty, so you may even get some warranty left here.

    2001+ Hyundai Elantra. I'm probably going to be mocked for mentioning it, but they're cheap, have a 5yr 60k mile warranty, and I know plenty of people that have had good luck with them. The GT model even has leather.

    2002+ Suzuki Aerio. A bit funky for my tastes but they're way cheap, super reliable, and made in Japan. If you like the looks and can find one they're not a bad bet. For a few more $$$ there's even an AWD model, but that will probably break the $10k mark.

    So, there are my picks in the $6-10k range. I like small cars, so that's what I know about best. If you find a car you like, use the Edmunds TMV for a good estimate of what the going rate should be and take the printout to the dealer to see if they'll meet that price. Stay far away from VWs, Daewoos, Kias, and non-Aerio Suzukis. Good luck!

    -Jason
  • audia8qaudia8q Member Posts: 3,138
    I think your Taurus/Sable suggestion is a good one...these cars can be had for cheap money and they are reliable, reasonable to fix and very safe in a crash....They sold my demo about a week ago and I took a used 2004 sable for a few days. 24valve, leather, roof, good jukebox and the gas mileage was decent....you get alot of car for little $$$
  • jlawrence01jlawrence01 Member Posts: 1,757
    The only problem with the Taurus is that while they are generally reliable - I have owned quite a few - they are also more likely to have those annoying $200-300 repairs a couple of times a year on parts that you would not expect.

    Personally, if I was in a just starting out and buried by debt situation, one of the later model Ford Escorts. We scored a 1997 Escort 4dr Sedan with about 30k for about $2500. As it was a cash deal, we could avoid carrying the comp and collision.

    BTW, there was an article in Forbes a few issues back about "upgrading" fleet cars with leather and other upgrades to boost used values.
  • kriyakriya Member Posts: 10
    I finished graduate school recently. I've got a job lined up, but I don't start for three weeks. I'd like to apply for a car loan (for a used car) and get the car squared away before I start working in the new place(no public transport there), but I'm not sure if I'm going to run into snags if I tell them what I'll be making before I actually start working at the company. Currently I do not have any income.

    I won't see a pay stub for at least five weeks (two weeks after I start working). Will the financing company ask me for one immediately? Will they call to confirm that I'm actually working there already? If I apply now and they turn me down, can I apply in six weeks again? Will dealer financing require me to have an income while applying or do they accept the job offer letter with salary stated on it, for a used car?

    I appreciate any insight and suggestions
  • bdr127bdr127 Member Posts: 950
    The answer to your questions: Every financing company works differently....

    For those with a "Recent College Grad" program, they'll require you to show your diploma w/ date and a letter from your new job saying that you are hired as of "X" date. You don't need to tell them when your first paycheck is..... Is the absence of credit history the issue? Do you just not have any (or limited) record of credit cards, loans, etc?
  • danf1danf1 Member Posts: 897
    If you can get your future employer to give you a letter stating what you will be making and when you start, that should suffice for all of the college grad programs that I deal with.
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