Credit Scores for Buying a Car: Current Tiered Rates & Scores (Former Dealer Explains)
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Published 2020-08-14
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Today Ray and Zach discuss the five different credit tiers that car buyers can qualify for, and what their current rates are. Ray discusses how Auto FICO scores can be accessed in advance of going to a dealership, and provides some insight into how car dealerships use this data during the negotiation process.
0:00 Introduction
1:25 What are the credit tiers
4:09 Super prime rates
4:41 Prime rates
5:06 Standard rates
5:16 Sub prime rates
If you like this video, please let us know in the comments below!
All Comments (21)
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I had a home mortgage for ~12 years, paying only the min. each month. I refinanced, but still a lot of principal left when I sold the house. I had car loans early on. What I learned is the opposite of the American dream: Live way under your means. Do everything as cheaply as you can. Buy reliable cheap used cars. Pay cash as much as you can. Put any money into paying off loans, and then into a house or condo you may own. I am now debt free.
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I got a call from a Ford dealership today and the sales guy said. .. “I have a customer looking for the specific year/model/color of Ford you own and so if you’d like, we can give you a brand new one for the same
MONTHLY PAYMENT... How does that sound?” ... I told him, we paid it off.. and he was like.. “Ok, have a good day..” -
Pro tip: if you have bad credit, don’t borrow money to buy a depreciating asset like a car. Buy a cheap car for cash instead.
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Takes a set of brass balls to walk into a car dealership with a 297 credit score, win a $99 car and not have money for doc fees.
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tyvm guys i've been working on my credit for a few years now and now i know where i stand :D ty going for my first real car wish me luck in two months
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Thank you for putting out useful content here on YouTube!
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Great advice. Keep up the great work that you are doing.
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Enjoyed the video. Have a good weekend!
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Let's say I pre shop for a loan at BOA and they come back at 4%. I go to the dealer and they run the application, and BOA is a lender that you work with, same in terms of loan amount and years. Does the system know that BOA has already quoted me at 4% or is it blind to my other application? If the system knows, is BOA obligated to come back at the same rate they have quoted, could they come back lower do to the volume of business between the dealer and the bank?
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I'm addicted to this channel.
So much great info.
What great chemistry between you two.
Its like the 2000's version of the Smothers Brothers.
I really tune in to see dad's watch collection.
Keep up the good work.
😊😊😊 -
Thankfully, the banks I've financed through don't have prepayment penalties. That's something I always look for.
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Great video. I see a lot of people going in blind about this stuff!
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I read where the banks are starting to tightening loans and increasing their loan reserves as the see hard times coming.
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Thank you. God bless you both
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I know this is an older video, but I'd be curious to hear how often dealers/lenders use FICO auto scores (say auto 8, auto 9, I'm sure auto 10 will be coming along soon enough now that 10 and 10-T are out) vs straight vanilla FICO scores. When I last financed my vehicles, my lender actually used FICO 3 which threw me for a bit of a loop. For the non-FICO pros out there, FICO 3 is a harsh model and my lowest FICO score.
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Another pro tip - know what you can get on the open market and negotiate the best price you can while letting them think that you will finance with them. Turn down all of the crap they sell such as extended warranties (pays less than 30% out in covered repairs vs the price of the service) as all that really is good for is for ripping the customer off. Once the paperwork is done and you have your car, refinance 2 weeks later. For us, we went from 4.94% (with ultra-prime credit) to 3.39%
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25 years in the car business and 10 of that a car dealer finance manager. Beacon score of 720 and above gets the best rates. Anything over 720 doesn't matter. I'm a 819 and a 721 gets the same as me. Don't fall for this
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The part that confuses me is how lenders account for credit history. My auto scores are 700+ and my ficos are between 735-750 yet because I’ve chosen to pay for my cars in cash I don’t have history of loans. Obviously I understand how that can be a red flag but I can’t find information on exactly how it affects what tier you qualify for.
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Please review the tier levels on the interest factor charged on a leased vehicle. What can you expect to pay with the top credit score.
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This great company helped me with fixing my credit score and removing all charge offs from my credit reports
