HELP! The car loan was denied after I already bought the car!?
- Thread starter dogememe
- Start date
it is all about the lender underwriter and how he aligns and assigns about this deal and the lender loan policy
for example, my CU does not require a GAP policy on the loan; however, it first need to go thru underwriters requirements, so he/she may ask for GAP nonetheless; Also, we charge $600 for a GAP with an option of cancelling GAP within 2mnts if one decides
btw, have you asked a lender for a shorter loan timeline, such from 60mnts to 48mnts, or even less perhaps, that may be a worthwhile asking
for example, my CU does not require a GAP policy on the loan; however, it first need to go thru underwriters requirements, so he/she may ask for GAP nonetheless; Also, we charge $600 for a GAP with an option of cancelling GAP within 2mnts if one decides
btw, have you asked a lender for a shorter loan timeline, such from 60mnts to 48mnts, or even less perhaps, that may be a worthwhile asking
Nothing wrong with it of course IF you do it correctly. Not many people paying cash for newer used cars...really pretty similar to buying a new one. Buying much older cars with a loan of course is more risky but you lose the depreciation risk of being upside down if you don't put enough down. Bottom line to me has always been - 20% down and get the shortest loan term you can afford, get it paid off, drive it. Done it many times on used cars without drama in my life.
I think for me, one of the biggest things you can do to prevent drama buying new/used cars is....secure your own financing. Take that out of the dealer equation. I've almost always had a loan from my credit union for cars I've bought/financed. You get approved for an amount and have a blank check up to the amount to write at the dealer - if they can beat it and the loan isn't garbage/strange/etc. then so be it. I've actually taken my credit union's loans over better financing deals b/c in the end, Navy Federal Credit Union isn't going to screw me over as a long-time member (~30+ years). No drama/no worry about any of this. I have recently for my two newest vehicles (the 2018 VWs in the fleet) used dealer financing as a tool to get the absolute lowest OTD price (b/c they make that money back plus some in the finance incentives) b/c of course, the loans weren't great but it didn't matter b/c I knew both would be paid off in the first year and the math showed I would be ahead doing it that way. In the event that something happened...no issue, just re-fi with my bank and move along.
I wouldn’t be so optimistic that NF will not screw you over. It is still a financial institution after all. I have my first and only credit with NF. It was for the longest time at an 8% interest rate. Last year it increased to 14%. I’m a 20 year member keep in mind. Good thing the increase is irrelevant to my situation. It gets paid off every month. I cannot even remember the last time I paid any interest on the card. However make no mistake NF did not almost double my rate because they have my best interest at heart.
^ See what I did there
They increased your rate b/c if you haven't noticed....inflation = FED raising rate = higher rates now. All my cards and variable rate loans have gone up. That has nothing to do with you getting screwed over. NFCU is a v. solid credit union and conducts business "nromally" vs. this garbage the OP is dealing with.I wouldn’t be so optimistic that NF will not screw you over. It is still a financial institution after all. I have my first and only credit with NF. It was for the longest time at an 8% interest rate. Last year it increased to 14%. I’m a 20 year member keep in mind. Good thing the increase is irrelevant to my situation. It gets paid off every month. I cannot even remember the last time I paid any interest on the card. However make no mistake NF did not almost double my rate because they have my best interest at heart.
^ See what I did there
My APR is 13.15% as of current and was ~7% for the longest time....
Not trying to be an bhsurfer here, but really if you need to finance a car, save over half the down. I'm not going to lecture anyone about paying all cash, but that is best.
NF is ok. I have moved most of my stuff to USAA and will probably get rid of the card soon anyways.
I suggest making the payment to yourself and bank the money for 6 months or more. Then go in with a strong down.
Better yet, start making those payments to yourself 3 years in advance and pay cash or whatever. Pay yourself the interest.
I hate loans, even though I know it can be advantageous to balance things out. Like pay your mortgage and invest in a nice index fund.
I also know having a house free and clear, especially in a good area with appreciating prices, is a pretty dang nice feeling.
Did I say I hate loans?
Funny....I use USAA for a lot of my banking...they are definitely not looking out for you like they used to.
GON
$100 Site Donor 2024
Sorry this happened to the OP. Agree with Pablo, paying cash is critical for many reasons. Work three jobs if you can to get cash together, And when one works three jobs, very little time to spend money.
OP- we don't know your situation, sorry if the "good idea BITOG fairy" does not understand your constraints, like you have a long commute, have children requiring daily transport, etc. We are all rooting that you come out of this better than when you posted the situation. Things often happen for a reason.
Last edited:
My bank accounts are with USAA. I've been a customer of theirs for a long time. Their service has gone down hill, and there's very little benefit to using them if their customer service is average. Their insurance is higher than most, their interest rates on savings accounts are pitiful, their auto loans are roughly a point lower than most, but they're certainly not the lowest out there. I'm just losing reasons for staying with them.
I don’t think any of them are…
No, the lender only knows the loan is for a year, make, and model with "X" miles and buyer wants to borrow "Y" dollars. As long as the vehicle is worth "Y" and the buyer meets their credit criteria, they'll approve the loan. They don't care if you put down 1/2 the value of the car, then added an extended warranty, gap insurance, maintenance plan, etc.
AZjeff
$50 Site Donor 2023
A lot of us here are in a position to pay half down or pay cash for a nice, (even new) vehicle but that just isn't reality for most young working people. Especially in California. It seems the OP is trying to get away from the moon & back mileage old stuff he's been buying and wrenching since he's been around here. Pretty sure he said he works 2 or 3 jobs. Live and learn.
GON
$100 Site Donor 2024
OP,
Consider taking a second look at the definition of "half down". Half down on the overall out the door price of the vehicle may be a horrible action.
If one needs to put down money on a vehicle transaction, the amount should be based on the wholesale/ auction value of the vehicle. Any money paid for a used vehicle above wholesale/ auction value is dead money.
The less money one has, the more important it is to purchase a vehicle at or near it's wholesale value. Yes, this is very hard to do, but can be done with homework, patience, and time. I understand you may not have time.
When one has no excess funds, it is very hard to escape a upsidedown car loan. These loans often spiral into repocessions and/ or bankruptcy.
A alternate course of auction is to reach out directly to the credit union, and ask them what loan you can qualify for, at what rate, at what loan to value. Then with homework, patience, and time- if you need a car loan, you may have a loan that reduces the exposure a used car loan being upsidedown inherently brings to the buyer.
Consider taking a second look at the definition of "half down". Half down on the overall out the door price of the vehicle may be a horrible action.
If one needs to put down money on a vehicle transaction, the amount should be based on the wholesale/ auction value of the vehicle. Any money paid for a used vehicle above wholesale/ auction value is dead money.
The less money one has, the more important it is to purchase a vehicle at or near it's wholesale value. Yes, this is very hard to do, but can be done with homework, patience, and time. I understand you may not have time.
When one has no excess funds, it is very hard to escape a upsidedown car loan. These loans often spiral into repocessions and/ or bankruptcy.
A alternate course of auction is to reach out directly to the credit union, and ask them what loan you can qualify for, at what rate, at what loan to value. Then with homework, patience, and time- if you need a car loan, you may have a loan that reduces the exposure a used car loan being upsidedown inherently brings to the buyer.
I use Marcus with Goldman Sachs for savings that used to be at the bank. But while the bank pays 0.1% Marcus pays 3.5%. Better than any of our banks or credit unions. They do a bonus rate if you have a referral. I, or any account holder, can share one if anyone is interested.
I looked into USAA thinking I might qualify as my dad was a veteran but it took info and docs I don't have. Just as well as I'm better off with Marcus now.
I looked into USAA thinking I might qualify as my dad was a veteran but it took info and docs I don't have. Just as well as I'm better off with Marcus now.
When we bought our last new car (back in 2013) local credit union did just that, basically by listing some options on the car when they were calcing the LTV. IIRC correctly it was to give us a better rate rather than skirt the max LTV as we weren't putting money down if we didn't have to (only put "down" manufacturer incentives).
Possibly a stupid question but how do you have possession of a vehicle before the loan is not finalized (ie. vehicle not paid for)? I have always obtained financing from my bank whenever I've borrowed, they deposit the funds in my account and I write a check for the purchase. Is this not the normal procedure?
GON
$100 Site Donor 2024
This thread addresses that question:
Another story that validates never to finance with the f and I guy at the car dealership
Bring in your own financing or pay cash. never ever trust the f and I guy at the dealership, ever. https://www.npr.org/2023/02/04/1152932192/yo-yo-car-sales
bobistheoilguy.com
