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Posted in Auto Loans
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Question By
dee1001

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what credit score is needed for an auto loan?
what credit score is needed to be approved for an auto loan?
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Every bank has different qualifications. There is no good answer for this! I would say if you score is 580 or higher you can get a loan but the interest depends on the bank qualifications there all different. Start with Honda and Toyota. Ally financial does GM and Chrysler and they are a pain. Ford wont touch you if your under 640. Even with a low score there are banks that wont drain you. Shop around. Like I said Honda Financial and Toyota Financial services are you best bet with a 580 to 640 score if you have good credit then look at GM or Chrysler which is Ally financial and if your credit is perfect look at Ford. Its a hard question to answer. Honda Financial is the easiest bank to get financed buy though!

Reply by
Daniellamarie03

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I see what your saying , however Ford sucks! I wouldnt go with Ford if my life depended on it. lol Im an import kinda girl!

Reply by
SDCARMAN

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Helpful to 10 out of 22 people

Does not matter which brand you go to its the banks Capitol one is buying deep

Reply by
zachary1234

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Working in the buisness I worked for nissan and you needed average credit 620 or so for nmac to look at you. A good buddy of mine works at honda and I know for a fact put a 530 person in a new honda civic thru honda finacial with 11.99 interest. The customer was someone i didnt have a shot getting done at nissan but my buddy got it done at honda. I always send people i cant get done to my buddy and he comes thrue 90% of the time. But understand credit in the 500s is a 12 to 24% interest zone. Being in the biz and what ive seen Toyota Financial and Honda Financial look at more then the score and are easier to get financing thru.Capital one is a secondary finace company SDCARMAN's and therefore has nothing to do with Honda FInancial or Toyota Financial. Capital one has there own qulifications like 580 score and a 2400 dollar month income requirement and no bankrupcies in the past to years. But toyota and honda financial is looking at payment history and will be very relaxed when it comes to credit score. I guess what im saying is if your score is 530 but they see you pay your bills but they tend to be late. Its what they call slow credit no collection you pay but the payments are late thats why your scores low then the likelyhood they will pick you up is high with honda and toyota financial. With Ford motor credit and ally this is not the case scores low denied! Cap one denied ect....So thats why i said toyota and honda financial services cause they look at the whole picture and base their decision on that, while others ford motor credit and ally see you as a number only and dont look at everything. So in conclusion coming from a guy 15 yrs in the buisness 580 to 640 score Honda financial and Toyota financial services are your best bet to get a 90% gauranteed approval.

Reply by
Lomarsmom

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I only have "Fair" credit and twice I have received low-interest loans from American National Bank out of Omaha, NE. Check them out!

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Reply by
Michagm56

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Thank you, very much; because this is very helpful for me; I am looking to get a loan for a car this year; and this is the true. I(we) was going with Toyota/ Honda; more so Toyota.. my question to myself has been answer... 

Reply by
jess41982

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I have poor credit based on the credit karma ratings. Based on suggestions on these posts I went straight to Toyota today when I needed a new car and even though I had to put a little more down than I hoped to and my interest rate was a crazy 24.99% I got approved for the car and left within a few hours. The finaning guy even suggested that I look into a refinance in about a year and a half and my credit should be reporting better as long as I make on time payments which could drastically reduce my interest rate. During the entire process I was never treated like a less than favorable customer and when my credit situation improves and I need another car in the future I will definitely do business with Toyota again.

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Helpful to 30 out of 38 people

I would definitely try a credit union.  First check to see which ones you can join, there are some with pretty easy criteria.  Then apply at one of them, as they are very good  about dealing with damaged credit. 

They have excellent rates, even for me who had a Chapter 7 meltdown 3 years ago.  I still got a 2.9% rate for 5 years on a 3 year old car, full financing including sales tax and registration fees. 

Reply by
cg2020cg

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Just as a note.  I have had 5 auto loans in the past 15 years with Ford on 2-3 year-old Grand Marquis' vehicles on their lot..  I have paid them all off individually and MUCH earlier than agreed.  I had a financial hiccup in the past few years and they won't finance a dime!  So much for LOYALTY!  I'm just saying.

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My car buying/refinance journey

Helpful to 324 out of 347 people

Idk if this will help anyone but here goes... In September 2013 my old car went kaput! I was desperate for a new(er) car so I went on Cars.com and narrowed it down to a few cars. I checked th out and settled for a 2011 ford focus (nothing fancy) for $10995. My score, according to the dealer was 573 (transunion) I got approved by capital one auto with an 18% APR and had to pay 1,000 down. Payments were $262 for 73 month... Ouch! A few months later (jan 2014) I went through my long time credit union I was planning on putting $4,000 towards the principle and rolling the remaining to the CU, but alas they declined me. Last month (Feb 2014) I went to a different credit union. I made an appointment and went in person to speak to a loan officer. I explained what I wanted to accomplish (putting $4000 towards principle, lowering payment) with her and she pulled up my credit report in front of me looked it over and asked me questions, finally she pulled my score 640 (transunion) and said that everything looked good. Next day she called that I was approved. Went in to the bank again and signed my new loan 6.74% APR 60 months at 186 a month! I did it for 60 only because you never know what hardships may occur but I'm planning on paying at least an additional $1,500 per year on top of my normal payments to complete paying it in about 3 years. So from bad deal to good deal in 5 months. It's possible you just need to work on your credit and pay, pay, pay! My score is proof of that 573-640 in 5 months! Oh by the way score on credit karma shows 614 so it's lower than what the CU shows due to the different models used I suppose

Reply by
Yos53

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This is the best advise out of all the crap I read and I can relate.  Thankyou.

Reply by
mjrkx250

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The banks and credit unions use a different credit score than you would get on KC or any other credit score site. They use one specifically for the auto industry, at least most do. It will almost always be a little lower, for two reasons. First it's that way by design, it allows them to get away with charging a higher interest. Second reason is also by design, they put more weight on some things in your credit history and less on others. 

Also, if you shop around, do it all within a day or two, that way you don't get hit with multiple hard credit inquirers that will hurt your score.

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Leasing is not buying

Helpful to 431 out of 484 people

Why would anyone take out a loan to lease a car? You're borrowing money to give away money on something you can't keep.

How I bought a new-used car from a dealer:

1. Research, reasearch, research. Study all the little dealer tricks and prepare for them in advance.

2. Trade in your old crappy car, if you must, but you'll get more momey if you sell it yourself. The dealer will want a grand or two down in any case.

3. Make it about the APR, not the monthly note. They will pad either as much as they can. Far better to get a slightly higher note at a low interest rate than a "cheap" monthly note at a high interest rate.

4. Be prepared for the "yo-yo" game: 30, 60, even 90 days after you buy, and try and try to register your car, you'll get that call claiming, "There was a problem with your financing..."! Be prepared to return the new car 100% clean and demand your old car and money back. They will find a way to accommodate you, believe me.

5. Remember, when you buy a car on credit, you own the note, not the car. If you pay off the note, then you own the car, even if that's six years later. DO NOT sign a six-year note unless there is no other way and all other conditions above apply. NEVER sign a seven-year note. Ever. That's insane.

6. The first chance you get to pay off your note, do it. Take the temporary score hit.

7. Drive the car into the ground. If you chose wisely, it should last 10-15 years or longer with proper maintenance. By then, you should be able to save enough money to pay cash for any car you want--preferably not from a dealer.

Reply by
korn7kid

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great advice but you lost me at #6? whats the temporary hit you take from paying off a note?

Reply by
longshot15

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Helpful to 4 out of 7 people

Great advice

Reply by
HateCarSalesman

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Now here is a person who knows how to purchase a car ...

I would like to add one additional bit of advice.  On your down payment put the least amount the Dealer will accept.  As long as you have the Terms ie:  Payment/Month, Interest Rate, & Length of Loan/Years.  Put any additional funds you have towards your first payment (directly towards the Principle).  The Dealership takes most of the money from down payments   as profit it really doesn't help your deal.  It's how they structure the front & back end of deals.

Enjoy your car.

Reply by
sellacar

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you have no idea what your taking about!!!!! ONLY GIVE ADVICE WHEN YOU KNOW 100% THAT IT'S THE TRUTH. OPINIONS AND FEALINGS ARE NOT FACTS.

Reply by
krazykat314

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I know this post is almost 2 years old to the day after it was written but it was still extremely helpful.

I have been driving since I was 17 but I have never owned my own car. At 60 years young, I have decided to bite the bullet and do it. Friends are very generous lending me their cars or driving me places but I'm sure that gets very old for them very quickly. Plus I miss  out on the freedom to jump in a car when I want to do what I want.

First, I was thinking of buying a used car, then taking out a loan for a leased car and then I read this. If I can manage a loan in the first place, I can buy a car.

Thank you for this advice. r Reply

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It all depends

Helpful to 213 out of 228 people

I just financed a car one month ago with a 585 (which is a huge improvement from my sub 500 score a year ago). I did'nt get the best interest rate, but that's the price you pay when you have poor credit and no money to put down. I put $500 down and received a 14.74%. Fortuntaely I havent missed or had a late payment in 18 months and only one credit card with a low balance.

Reply by
betaswan

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That's a huge interest rate, I'm glad u got the car but in the end you will almost pay double what the car was initially worth.

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Reply by
ANT289

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Helpful to 64 out of 84 people

That is fine just pay extra on principle as much as you canand as often as possible.

Reply by
bigrigj2

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If you dont mind me asking, who did you finance through

Reply by
mentallyclear

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Has your 18 months of timely payments raised your score?

Reply by
brandim311

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How did you raise your credit that fast? 

Reply by
emmy2316

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Who Did You Get Your Loan Through?

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Reply by
stgcret

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Helpful to 4 out of 5 people

With 18 months of on time payments, you should be able to refinance to a lower interest rate.

Reply by
mjrkx250

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Something I would definitely recommend is checking with a credit union. My credit was in the mid 500's and I got a rate below 5% less than two years after I had to file for bankruptcy. Key is I had always paid my bills on time and never was late except on the two credit cards I had filled bankruptcy on.

Reply by
cg2020cg

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Also, you should be able to refin. now and get that 15% down to 10 or less.

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620 credit score

Helpful to 102 out of 107 people

That was my credit score almost 2 years a go i bought a 19k suv with 3000 trade in and 500.00 cash as a down and i was picked up by Toyota Financial at 8% interest my payments are 350.00 a month...i have never been late or missed a payment and my score is climbing.  If i buy again it will be with Toyota Financial there amazing :)

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Reply by
Michagm56

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Thank you, for your writting this; once again that is who I'm going with (Toyota) Financial for us this is the way to Go...

Reply by
DtotheG

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sounds like you got Fed in the A

Reply by
DtotheG

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Sounds like you got Fed in the A

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Helpful to 117 out of 127 people

make sure you get refinanced, when i was 20(2010) i bought my first vehicle, dropped out of college for a great life choice, 10.xx% interest, i got it refinanced 1 year later and now got 3.65% APR.  just make on time payments and you can drop it nice, and build your credit.

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auto loan

Helpful to 75 out of 82 people

Also,with a subprime credit score under 680 Equifax,  you have to be able to prove over $2000 in monthly income.

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Kia will finance with bad credit

Helpful to 15 out of 15 people

I had a credit score of 527 and got financing for a (gently) used Kia Rio5 hatchback at the local Kia dealer. The interest is high, but I got a car to drive. I had tried to get financing on a used Toyota Yaris at the local Toyota dealer, and when all financing options there failed, the sales person sent me to the Kia delaer (no kidding...). After only one payment, my credit score has went up to 596.

Also, there are companies (Here in Texas the business is called "Drive Time") who will finance you regardless of your credit. The cars from these companies generally have fairly high miles (80k, etc.) but some of them have lower mileage. You can't be too picky about the car, I suggest you go with the lowest price and just get on the road. I have heard that these types of places don't help your credit as much as buying from a dealer, though.

Drive Time here in Texas has dealers all over the Dallas/Fort Worth area, so I could have selected any car from any of their many dealerships. I went in, and got approval, then they gave me a list of cars within my budget. I could have gotten some ncer cars, but the down payment was higher. They have everything from small compact cars, to cars like Impalas, to pickup trucks. When I lived in Michigan there were businesses like this as well. If you have terrible credit, and need a vehicle, they can get you on the road. I think the only requirement is to have a job.

I love my little Kia Rio5, though. I'm glad I went this route. I plan to make double payments, and get this loan down fast. You gotta re-set your priorities if given the chance to re-build your credit. You can't be a stomp-your-feet, red-faced child screaming "I gotta have it" for toys, phones, computers, games, and you name it for stuff people buy on credit. You just can't. Start with the smallest credit debt and work your way out of debt. If you get a chance, check out a Dave Ramsey "Financial Peace University" course. It costs $100, and is ten weeks, and will fill you full of ideas on how to become debt free. One suggestion? >> Take a pair of scissors to your credit cards... TODAY. Stop buying stuff on credit, and stop living beyond your means.

Good luck.

Reply by
smead91

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Just out of curiosity. When kia financed you did you have any reposessions or collections on file?

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credit and scores

Helpful to 29 out of 31 people

I worked for Ford Credit. I was in Purchasing for Fairlane Credit under Ford Credit  before 9/11.  They placed me in collections collecting on the paper I had been pucrchasing.

A little known trick to paying your car off sooner is make a full payment for your first payment. Then, if you are paid every two weeks send in half of a payment. You can even round your payment upwards. When you do this you cut down on the interest you are paying on a car and will pay it off sooner.

Besides, even though they say you have a grace period of 10 days if you consistently pay that payment 10 days after the due date you will have money left over that is due at the end of the note.

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Something To Keep In Mind....

Helpful to 11 out of 12 people

It's not always about IF you will be approved for a loan, so much as WHAT you'll be approved for. In November 2014, my car died and I thought it was going to be the end of the world because I only had $2,000 that wasn't allocated towards other bills and my credit SUCKED. I had a 585 TransUnion score, and the Equifax and Experian with in the 550's. I did a ton of research on dealers that offered loans with bad credit (not buy here, pay here) and internet loans that were "100% Approval Guaranteed". Now, let me stop right here- DO YOUR RESEARCH. If you research these internet loan sites, you'll find most of them throw your credit application out to about 5 lenders to see what terms they come back with. Since it's all done around the same time, I'm told it only counts as 1 Hard Inquiry on your credit. Nonetheless, many of the loans will come back with approvals at high interest rates, but what you need to watch out for is the terms under which you can purchase a vehicle. A lot of them will have limits on how old the car can be and how many miles the car can have. 

After reading through all the information, I decided the internet loan deal wasn't really for me; so, I continued to investigate dealers that would provide loan terms with bad credit. After pouring over hundreds of blogs and other sites, I remembered seeing 1 blog where someone was able to obtain a loan through CarMax- which was perfect because the car I wanted was there for about the price I wanted to pay. I called my local CarMax dealer and spoke with a salesman. I explained NOTHING regarding my credit situation or what I was looking for, other than the car I wanted. He called me back within an hour and provided terms from 1 lender that would finance me- American Credit Acceptance. Again with the research, I poured over reviews and information from current and previous customers. The reviews are less than perfect, but they're the ones helping me out so a lot of negativity was easily dismissable. 

I decided to proceed with the loan. After $2,000 down payment (only $400 down payment was required), warranty and gap insurance, I financed about $17k at 18% interest over 72 months- making my payment about $400/month. For a 2012 VW Jetta fully loaded with 23k miles on it, not too bad- only considering my credit situation. Now, here's where you have to find the value out of these loans. These loans are designed for people, based on past credit history, that are likely to miss payments or stop paying altogether. Of course the finance company is going to charge you high interest. If you stop paying after 6 months, they have about $2k that you've paid them in interest, plus your downpayment. They've already made money off of you so they could care less if you stop paying for the car after 6 months. What this loan does for YOU, as a newly responsible credit builder, is give you a chance to repair your credit and work towards the goal of obtaining a loan with a better interest rate. After two months of having the loan, and only one installment completed, my TransUnion score has increased to 613 and Experian and Equifax are going up as well. 

With the research I've done, I'll continue to pay my car loan while I finish paying off my $3,000 delinquent student loan. By the time the student loan is in good standing, I should have a score worthy enough for an unsecured card from CaptialOne. Depending how quickly my credit score rises will determine how quickly I apply for the loan, but I am treading carefully as I don't need anything screwing up what I've already done. Moving forward from that, I plan to either trade in or refinance the car I have in early of 2016 in hopes of a better interest rate so I can pay more on the principal than the interest.

Reply by
kitkat8156

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Helpful to 1 out of 3 people

Awesome, dveezy!

I think your doing awesome.  Once the student loan is paid off, IMo you should see if you could refinance.

 I got my score up to 647 from 550, with 3 credit cards (NEVER maxed, always low balance or paid off).  My student is in collections.  I put 1k down, trade in car (fully owned) and rebates, was able to finance 15333 with 4.1% at 75 months.  with my payments being 232.10, I'm going to round it to 235, (saves 2 months) and pay extra when I can.

and my student loan is down under 500 bucks now.

Good luck!

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