Financing a New Car..???

Question

What number should your credit score be in order to finance a new car?

Answer 1

If you have to ask, you can't afford the new car.

It really all depends on how much car you are trying to finanace and who is doing the financing. how much down payment, and other factors.

Maybe you should save some more money for that down payment.

Answer 2

Auto finance is what I do for a living and auto loans are based on the following factors;

1. LTV (loan to value).
2. Term requested.
3. Age of vehicle.
4. Miles on vehicle.
5. Down payment/rebate.
6. Time on job.
7. Time at residence.
8. Monthly income before taxes.
9. Credit score/profile.
10. Debt to income ratio.

As long as the above are within the lenders guidelines I have seen people get approved with scores as low as 500.

Much more important then score is your credit profile. I look at credit every day and see people every month with scores of 700 that can not buy a car because their score is based on 1 credit card with a $500.00 limit paid 15-times and a couple of student loans.

While this type of profile generates a great score it does not show the ability or the willingness to actually pay anybody.

What you need for the best scores and profile is 3 credit card accounts (revolving) with balances below 30% of your credit limit and 2 cars, homes, boats, furniture or personal accounts (installment) all with good long payment history's.

This will give you the score/profile needed to get just about any loan you will need at the best rates.

Answer 3

It really doesn't matter, you can usually find a place to finance a car. Some car dealers only want to see that you are working and that's good enough for them.

If your credit score is low, you'll end up paying a much higher interest rate.

A word of advice; be very careful when financing a car if your credit is bad. Often unreputable dealers will take advantage of you by selling you a car for a lot more than its worth, then sticking you with a high interest rate, force you to by a warranty. You'll end up spending far more than the car is worth.