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Thread: Auto financing situation, rant

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    God/dess greenidlady1's Avatar
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    Default Auto financing situation, rant

    So, today we go to the Saturn car dealership to purchase a 2006 Saturn Vue. I want the very basic one that is a five speed manual for gas mileage. The total is 19k and some change. I wanted to put down 5k, therefore, making the amount to be financed 14k. I tried to purchase this vehicle last year in September with a 532 Fico score and could not with 3k down. The salesman told me if I would put 5k down and prove employment then they would be able to do it. I couldn't afford to do that at that time so here I am today with 5k, proof of employment and a 560 Fico score. Now, the car dealership goes by the "Beacon" score which was a bit lower for me at 528. Last time I was there they ran my credit to Saturn, GMAC, Americredit, Olympic Financial and Capital One. None of them would take my loan. I told the salesman I did not want my credit ran that many times again because it lowers it each time they run it. So, first today they ran it to GMAC. Their computers were having "problems" so it took a while. They denied it. They said that they thought Americredit would buy it but it was too late today and they would try tommorrow morning first thing. I am pretty aggravated about the situation. My car was hit at work and I did receive the 1500 check to get it repaired today but since it is about to die literally I would rather put the 1500 towards the new car as well. So, now I can do a 7k down payment. I don't understand what the problems is here. I do understand everything that is occuring but I don't understand why. I paid off everything negatively affecting my score, prove my employment and income, have a fairly recent car loan that was paid off in good standing and want to put 1/4 to 1/3 down on the vehicle. I have looked into Barnone, Funding Way, etc but the require you to use their dealerships and I don't want to finance something that I don't want. What should I do here? Please help

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    God/dess Bridgette's Avatar
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    Default Re: Auto financing situation, rant

    It's pretty ridiculous that people with a 520 FICO can buy a house with no money down but someone with a slightly higher score can't buy a new car with 30% down Really points to the absurdity of the current mortgage / real estate market.

    Anyway, have you tried other loan sources? I'm dead dog tired so can't think of names now but I'm pretty sure there are alternative funding sources that will let you buy any car, not just from their lot. At any rate, I can't imagine you NOT being able to get financing with that kind of money down. WTF are these jerkoffs thinking???

    Quote Originally Posted by pheno View Post
    When you lead a nontraditional life don't try to measure it with traditional milestones.

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    Default Re: Auto financing situation, rant

    Something does seem odd about them turning away a $5,000 (now $7,000) down payment...I guess they just don't want to make the sale that bad, eh?

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    God/dess greenidlady1's Avatar
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    Default Re: Auto financing situation, rant

    I know right, lol? I was looking a couple of credit forums this evening and found out that Well's Fargo does poor credit financing, as well as, Citi Financial, Chase and HSBC. AmeriCredit also does poor credit financing. The dealer is going to check with AmeriCredit in the morning and if that doesn't work I will contact one of these other companies. I am trying to have as little inquiries as possible though. Maybe if I talk to the finance manager tommorrow and offer another 2k they will be able to make it happen.

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    Banned Melonie's Avatar
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    Default Re: Auto financing situation, rant

    I don't understand what the problems is here. I do understand everything that is occuring but I don't understand why.
    Actually, many things have changed since last year in regard to loan / creditworthiness standards which have little or nothing to do with you personally ...

    - there were a record number of bankruptcy filings last year which negatively affected auto lenders along with mortgage lenders, and which affected 'subprime' lenders more seriously than 'mainstream' lenders

    - changes in US bankruptcy laws enacted last year now make it much more difficult for lenders to 'write off' a delinquent loan of any kind. Instead they are forced to keep carrying 'non-performing' loans on their books for typically 5 years of the Chapter 13 bankruptcy process. This potentially affects not only the lender's own financial health rating, but also can affect the lender's 'cost of money' (thus reducing profit margin on ALL loans)

    - federal bank regulators have recommended new tighter criteria for lender risk management, which includes not only borrower payment history but borrower 'cash flow analysis', the 'stability' of borrower income, and the potential (in)accuracy of stated borrower income.

    - bank boards are beginning to assess the probability of a borrower financial 'catastrophe' striking, i.e. how secure is their 'employment' likely to be, do they have insurance coverage to deal with an expensive health problem, is their 'net worth' a positive or negative number etc.

    - most state auto lending laws preclude auto lenders from assessing credit card like 'late fees', 'penalty' interest rates etc. to supplement the profitibility of 'shaky' auto loans.

    - used car prices have been depressed by last year's new car 'employee discount' programs, which increases the potential dollar amount of auto lender loss if a loan goes belly up and they are forced to repo / auction the car.

    the overall principles were discussed at

    There are also other fundamental differences between mortgage lending and auto lending which makes auto loans more risky for the lender. The largest is that mortgage loans can be 'repackaged' into mortgage backed bonds and resold to investors (which also transfers the default risk from the lender to the investors), whereas auto loans (and the default risk) must be held by the lender for the whole term of the loan.

    As such, many potential lenders are now simply walking away from 'shaky' auto loans, because they assess the potential risks to outweigh the potential profits.

    As you discovered, with 'mainstream' auto lenders tightening their lending / creditwortiness standards, the latest 'angle' in the subprime auto loan market which is growing to 'take up the slack' are so-called 'partnership lenders' like BarNone. These 'partnership lenders' actually have two income streams instead of just one... the subprime auto loans they write, and 'subsidies' paid by particular car dealers (in one form or another) in exchange for the 'partnership lender' steering business to that particular dealership. The particular car dealers of course recover the cost of those 'subsidies' by marking up the price of the vehicles they are selling - which they are able to do because the potential subprime car buyers are forced to purchase from 'partnership dealers' if they want to obtain financing. In essence, this allows both the 'partnership lender' and the 'partnership dealer' to earn more profit on the sale of a vehicle to a subprime customer than state auto loan laws would otherwise allow, but with the 'extra finance charges' actually being embedded in the inflated selling price of the vehicle rather than appearing as loan interest.
    ~
    Last edited by Melonie; 03-28-2006 at 04:51 AM.

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    Default Re: Auto financing situation, rant

    Why not just buy a decent second hand/used car instead ? For $7000 you MUST be able to find a really decent used car ... goodness... I found one for $1400 AUD! Granted, it cost me another $1000 AUD to do it up so that it would last another two years (at least)... still a bargain at around $2400 imo.


    enter: E3167322D9 for your 10% discount

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    Default Re: Auto financing situation, rant

    I’m no expert by any means but I read that with credit/loan Company’s not only do they look at your score but also they check to see how many delinquencies are listed on your credit report. A few months back my husband had a score in the late 500's and each time he applied for a CC he was denied, we requested a letter from the CC Company and it stated that numerous delinquencies showed up on the report.

    Also have you checked to see if the paid collections have been erased or updated on your report? My husband paid off all of his but they were still listed on his report as
    Unpaid accounts.


    Seraya.
    Last edited by seraya; 03-28-2006 at 04:14 PM.


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    Featured Member scorpio's Avatar
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    Default Re: Auto financing situation, rant

    first of all, you "beacon" and "FICO" are the same thing. They take the average of the three scores from the credit agencies. One question? Do you have debt? having even one maxed out credit card will lower your score more than a collection, this may be why your score hasn't dropped. Did you do what I suggested and go to experion.com, equifax.com, and transunion.com and pull your reports and dispute wrong info?

    btw, you CANNOT buy a home with no money down with a 520 score, so don't even go there. Try Wells Fargo, they have some really good programs for bed credit and if you have another auto loan that has a good history, they should be able to help-at around 20%. Unfortunately, you will have to take it. After 12 months of on time payments, Wells will refinance at a lower rate.

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    Featured Member lunchbox's Avatar
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    Default Re: Auto financing situation, rant

    I'm fairly certain all credit inquiries within a week or two only count as one inquiry towards your score. They do not expect everyone to just take their first offer.

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    Default Re: Auto financing situation, rant

    I've never heard of anyone buying a home with a 520 credit score and no money down.

    Greenidlady, do what Scorpio said and call Wells Fargo.

    Also, hit the Credit Bureau websites and start disputing all negative information that you can.

    And, Bridgette, it's easier to get a loan on a house (though not at 520) than on a car because I don't know of many people who skip out on paying their mortgage and hide their house in someone else's garage so it doesn't get repoed. There is a higher loss risk factor in car loans than in mortgage loans.

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    God/dess Emily's Avatar
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    Default Re: Auto financing situation, rant

    yeah, and new cars depreciate a lot in the first....oh, 2 seconds

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    Default Re: Auto financing situation, rant

    [QUOTE=scorpio]first of all, you "beacon" and "FICO" are the same thing. They take the average of the three scores from the credit agencies. One question? Do you have debt? having even one maxed out credit card will lower your score more than a collection, this may be why your score hasn't dropped. Did you do what I suggested and go to experion.com, equifax.com, and transunion.com and pull your reports and dispute wrong info?

    btw, you CANNOT buy a home with no money down with a 520 score, so don't even go there. Try Wells Fargo, they have some really good programs for bed credit and if you have another auto loan that has a good history, they should be able to help-at around 20%. Unfortunately, you will have to take it. After 12 months of on time payments, Wells will refinance at a lower rate.[/QUOTe

    I have no outstanding credit cards or loans on my credit report. I paid everything off except for medical bills. However, I did have one credit card account for 960 dollars that the collection agency agreed to take 630 as a settlement. I have the paid check and letter from the agency but the remaining 330 is still showing up on my credit. I mailed all three credit bureaus a copy of the paid check and letter. I called the collection agency and they claimed since I "saved" 330 that that is the reason it is showing up which I think is bullshit since they said they would take 660 as a settlement. I called the orginal debtor and they claim I owe nothing. I disputed the item to no avail. It is still showing up. So, I took a copy of the paid check and letter to the dealership with me. The dealership tried Americredit and I was denied. They then tried a place called "Drive Financial" which I did do some of my own research on. I read the company has lawsuits against them for scaming people. Plus they will only finance a used car despite the fact the used car may cost a lot more than the new one I orginally wanted. They also will charge 25% interest rate. They approved me but want the last two years tax returns and 7 references. This is not a problem but I am not crazy about the 25% interest rate or the fact that they have a lawsuit against them. So, I tried Wells Fargo and HSBC online, both denied me. My credit of course now is probably in the shitter from all of the inquiries. But, this is what I have decided to do. Keep my 7k and continue working hard. Go to my bank tomorrow which is Wachovia and apply for a secured credit card. That way I start rebuilding my credit, the dealer said one of the biggest problems is that it has been 6 years since I had anything "positive" on my report. I'll try to get gear shifter thing, (I don't know much about mechanics of cars), fixed which is what is wrong with my car besides it being wrecked. If that is fixed I can still drive it around here for a while. If I need to go somewhere further away I can rent a car. Anyways, I save my money and pay cash for something decent and used in the next few months. I think that is the best thing for me to do. I just don't want to get shitted just because of my credit situation that can be fixed eventually. What do you think?

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    God/dess greenidlady1's Avatar
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    Default Re: Auto financing situation, rant

    Quote Originally Posted by VenusGoddess
    I've never heard of anyone buying a home with a 520 credit score and no money down.

    Greenidlady, do what Scorpio said and call Wells Fargo.

    Also, hit the Credit Bureau websites and start disputing all negative information that you can.

    And, Bridgette, it's easier to get a loan on a house (though not at 520) than on a car because I don't know of many people who skip out on paying their mortgage and hide their house in someone else's garage so it doesn't get repoed. There is a higher loss risk factor in car loans than in mortgage loans.
    So, I should dispute all of my medical bills despite the fact that I know that are legitimate debts?

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    Featured Member scorpio's Avatar
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    Default Re: Auto financing situation, rant

    ah ha! So, you are saying you have no credit, except collections? Well, your score will not improve by paying the collections, you must re-establish new credit. So do get a secure card and pay on time. Also, dispute your paid collection directly with the agencies via the websites. It should report as a paid collection, zero balance.

    And no, you cannot dispute legitimate debts unless you find discrepencies in the way it was reported, such as wrong account numbers, duplicate accounts, collections over 7 years old, etc.

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    Default Re: Auto financing situation, rant

    Quote Originally Posted by GoldCoastGirl
    Why not just buy a decent second hand/used car instead ? For $7000 you MUST be able to find a really decent used car ... goodness... I found one for $1400 AUD! Granted, it cost me another $1000 AUD to do it up so that it would last another two years (at least)... still a bargain at around $2400 imo.
    I was thinking the same thing. A 2006 Saturn VUE will depreciate $7500 in the first year. Why not look at 2005 VUEs? I have a Honda CR-V, which I love, and it holds a good resale value.

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    God/dess greenidlady1's Avatar
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    Default Re: Auto financing situation, rant

    I think that is correct because the only things I ever financed were a car back in 2000 that was payed off satisfactory which is good but too far back according to the dealer. I had a computer that I paid off but did so late like 2 years ago and the credit card I was mentioning earlier. Other than that the only thing on my report is medical bills. Most of the medical bills will come off next year. I already did one dispute with all three agencies directly, Experian, Equifax and Transunion, on the remaining balance of the credit card because the collection agency and I settled it and I have the letter to prove it. However, they came back saying it was a legitimate debt but I have proof it is paid. I guess I should do it again?

    Thanks for your help.

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    God/dess greenidlady1's Avatar
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    Default Re: Auto financing situation, rant

    Quote Originally Posted by JoeyJones
    I was thinking the same thing. A 2006 Saturn VUE will depreciate $7500 in the first year. Why not look at 2005 VUEs? I have a Honda CR-V, which I love, and it holds a good resale value.

    I actually like the new style the best, otherwise I could care less whether it was a 2005 or 2006. I can get financed for a 2005 VUE through the Drive Financial but I afraid to because I read about them scamming people and having a lawsuit against them. So, I will just save my money and probably buy a used CR-V later on. I like the CR-V also.

  18. #18
    tampafldancer
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    Default Re: Auto financing situation, rant

    Have you tried getting financed through honda?

    I really don't know much about what I am talking about here, but they gave me a killer rate but i have pretty good credit. My friend got a loan through them (they used Riverside Financial) and he had not so great credit...

  19. #19
    tampafldancer
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    Default Re: Auto financing situation, rant

    Before them i used bmw and their credit percentages were CRAP... LIKE 9 percent.. and my credit was good..

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    Banned Melonie's Avatar
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    Default Re: Auto financing situation, rant

    Scorp, Venus and others with direct experience in the business please correct me if I'm wrong, but ...

    When a 'settlement' is reached between a creditor and a delinquent borrower, i.e. a $900 overdue balance being 'settled' for a $600 payment, the delinquent borrower still caused the creditor to 'lose' $300. Unless special arrangements are made, the creditor will still report the $300 as an outstanding unpaid debt - with associated negative consequences to FICO score - even though the creditor has agreed to stop efforts to collect the remaining $300.

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    God/dess Emily's Avatar
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    Default Re: Auto financing situation, rant

    Tampa> I have an 1.99% no money down rate on my 2005 Infiniti G35x (through Nissan Financial Services) but that was a promotional rate on certain cars. It was the end of the model year and they were trying to clear out the inventory of 2005s because the 2006s were already on the lot.

    You also had to have good credit and be willing to do a 3 year loan (yes, my monthly payments are really high, but for me, it's worth it.) Good deals always have catches.

  22. #22
    Star_bare_elegance
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    Default Re: Auto financing situation, rant

    My score is 581 it was 463 :-( even though it has raised a whole lot in the last 7 months I still cant get a car loan and all of my balances are 0. I have no collections on file anymore... life sucks with bad credit. I'm getting a $500 secured card so hopefully in a year I will be able to have a score of at least 620... maybe then I can get a loan

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    Featured Member scorpio's Avatar
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    Default Re: Auto financing situation, rant

    like i said before, paying off collections is a start, but you must then re establish credit to be able to get financing.

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    Default Re: Auto financing situation, rant

    Quote Originally Posted by Melonie
    Scorp, Venus and others with direct experience in the business please correct me if I'm wrong, but ...

    When a 'settlement' is reached between a creditor and a delinquent borrower, i.e. a $900 overdue balance being 'settled' for a $600 payment, the delinquent borrower still caused the creditor to 'lose' $300. Unless special arrangements are made, the creditor will still report the $300 as an outstanding unpaid debt - with associated negative consequences to FICO score - even though the creditor has agreed to stop efforts to collect the remaining $300.
    What happens is this: Original creditor charges off the debt (let's say it's Credito) and sells it to a collection agency (Idiotics). The Credito stuff will come up on the credit report as being "charged off". Idiotics will show that a collection company currently owns the debt. When the customers pay Idiotics for the debt, it will show paid collection (no matter how much the collection was for). However, it will not change the fact that Credito still shows being charged off. No matter what you do at this point, it won't erase the charge off.

    It will raise your score a bit by paying off all of your debt. Even if they were collections. However, at this point in your credit file, you have shown creditors that you are not reliable. You pay debt off, but not timely. They don't want to lend to people like that. They will lend to people who pay off collections and keep their credit clean for 6-12 months and they'll ignore that you ever had collections after 12-24 months of clean, timely payments (to whatever current creditors you have).

    Unfortunately, most people think that by paying off their collections, they should be able to jump their score 100 points over night and have no problems getting a big ticket loan. It's not that way. Paying off your collections prevents your score from being stalled or from falling.

    I will say that after 7 years, all of those negative reports will fall off. So, if those charge offs are from 6 years ago...then they will fall off next year which will help your credit score go up. The score will go up more once your collections are showed as paid...and after 7 years, those will fall off as well.

    It's important to note that after 7 years, GOOD stuff drops as well. Which is why once you get rid of the negative stuff, it's important for you to maintain good, timely payments...so, hopefully, in 7 years your credit score will be where you want it to be.

    Is that explained well? If I didn't explain it well, let me know and I'll attempt it again.

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    God/dess VenusGoddess's Avatar
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    Default Re: Auto financing situation, rant

    Quote Originally Posted by Star_bare_elegance
    My score is 581 it was 463 :-( even though it has raised a whole lot in the last 7 months I still cant get a car loan and all of my balances are 0. I have no collections on file anymore... life sucks with bad credit. I'm getting a $500 secured card so hopefully in a year I will be able to have a score of at least 620... maybe then I can get a loan
    Well, with that score, I would say that your collections are still showing up on your credit report, but just as being paid.

    Nothing will be removed from your credit except if it falls into one of 2 categories:

    1.) The information is fraudulent and it's proven that the info is wrong/fraudulent.
    2.) The 7 year mark has passed.

    If anything else, it'll be there until 7 years has gone by.

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