Thursday, October 30, 2008

Car Deals Are Plentiful (but Bring Good Credit)


If you have great credit, you're in the driver's seat right now -- as automobile dealerships scramble to clear lots of excess inventory. Still, according to the New York Times, your good credit won't clinch the deal. It'll just get you to the bargaining table. Customers should expect to put about $3,100 down, up from $2,500 just a year ago. What's more, the best deals are going to customers who have FICO scores of 786 or higher. Yikes. A year ago, the best terms could be had with a FICO score of 741.

From the New York Times story:

But unless you pay in full with cash, you may find that the game has changed. Many lenders are tightening their standards, and as a result, customers with a so-so credit history will pay more for a loan, while those with poor ratings will find themselves shut out. Loan lengths are getting shorter and amounts are getting smaller; even the best customers may be required to make a larger down payment.

If you are unsure of your credit situation, don’t bother to visit showrooms, said Tom Quinn, vice president at the scoring division of Fair Isaac, the company that developed the widely used credit scoring system known as FICO. Obtain a credit report first and learn your FICO score, he said. People with scores of 700 and above are considered prime customers.

The rest of the story can be read here (link).

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18 comments:

Anonymous said...

My GF just has been approved 5.0% autoloan from PenFed.Her Equifax credit score is 666.It took 5 minutes.

GlobCredit.com said...

Yep. Penfed and other credit unions are the way to go right now. Just another reason why I recommend getting a credit union account. My story on that (link here)

Congrats to your GF, Anon.

The Lion said...

Not fair :( . I need a new car (mine broke) and I don't qualify anywhere but the buy here pay here lots. No way am I paying 30+% in interest on a car!

GlobCredit.com said...

Lion, do you have a Penfed account?

The Lion said...

No. Well, yes I had one but they would only give me savings - no checking and would hold all deposits for 9 days. So I closed it down.

It is just a mess.

GlobCredit.com said...

Interesting, Lion. I suspect there is a story, but this isn't the forum for it. Feel free to shoot me an email.

lupoman said...

Getting ready to Pull the Trigger Myself on Penfed for a Car loan!! 15 days!!

TheVibeRAIDER said...

"Expect to put about 10 percent down in cash."

I haven't bought a new car since 1989 and it was 20% down back then!

GlobCredit.com said...

I put about 20% down on my last car too. That was at the turn of the century (2001).

GlobCredit.com said...

Lupo, post a picture of it when you get it.

Congrats.

lupoman said...

Will do man!! I am kinda wondering How much PenFed will ask for me to put down, actually kinda freaking me out lol. Wish Anon would post back with how much his GF had to put down.

Yes I know the typical amounts to put down on a car. But this ain't a typical bank,(CU) its PenFed, and I am active duty, ( A recession-proof, pension guaranteed,impossible to get laid off job!) I would expect Penfed to cut some slack, besides they are in that elite group of banks that is having no problems.

TheVibeRAIDER said...

lupoman,

You're a military man? I'm a Navy kid; Dad is retired Navy. Brother in Air Force. We're a family in USPS.

Put 20% down if you can. You'll thank me later! No more playing around the credit game, even with PenFed.

If you can't do 20%, buy used. That's what I did.

Of course, that's IMHO.

;-)

lupoman said...

Goofy Misspellings above, didn't know how to edit lol


Well i wasn't planning on buying at all, But that New Challenger Has My name it, its just calling to me!! I cant stop thinking about it!!

GlobCredit.com said...

You don't have to worry about it, Lupo. I come along and clean the place up afterward. I just deleted the post completely.

lupoman said...

lol, thanks bud!! BTW, You got mail!

GlobCredit.com said...

Thanks. I will check my email now.

Anonymous said...

I agree. It is tough even though there is excess inventory. The dealership wants to and needs to move it. It is the banks backing the loans that are putting on the brakes...and asking for a big downpayment, a shorter term, a 720 FICO, and pay stubs.

Having said that, its stacked in your favor to negotiate a long term 0% financing deal on the car/truck you really want. If you've got the credit, it is truly a buyers market.

GlobCredit.com said...

Anon, 100% agree with you.

I have a car purchase coming up in March. I'm hoping for a 0.9% deal (or something close to it). It is absolutely a buyer's market if you have strong credit (and a decent down).

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