Some Capital One info from the trenches...

[notavictim]

Well 2 years post discharge I was finally approved for a Cap 1 auto loan to $30K at 8.5% on an '09 or newer. For older used cars the % rate goes up a lot.

Some of the things I've been hearing from dealers:

"So you want to refinance in 6 months of on time payments with Cap 1? Well the fact that you have a Cap one auto loan is a red flag - and if you have a double digit rate that is a red flag. Let me see what kind of bank or credit union financing we can get for you. "

"Cap one for $30k? A more realistic car for you is this certified 2006 car for 20K including TTT, $1000 cash down. This 8% bank loan will look better on your credit rebuilding and with a certified car you could trade up in a year or two"

"It takes longer to show auto loan payment than 6 months - more like a year to two years to establish good auto loan repayment."

"A new car/luxury car with a high payment is good for credit and financing..."

"Capital One is not as good as you think. There are problems with it - the fine print..."

My thoughts...Certified used cars might be the hang up for these dealers. They depend on the certified status to make some extra money. However this may be a problem with the Cap one LTV limit of 110% NADA. I think that is what is sending these guys into a tailspin.

Any thoughts for or against these guys?

[StartingOver08]

What send's these F&I guys into a tailspin is that you have already lined up your financing! The dealers make more on the financing end then the actual sale of the vehicle.

I do agree with one of the statements above though, you can get better financing thru a CU, especially now. The rates are really low (for used vehicles in our area of S Fl 4% to 5% is the norm but I think 4 yrs old is the 'limit'). I would NEVER go through the dealer for financing though -since they make their profit by sticking you with a higher rate. Why don't you try to get financing directly thru a CU since you are post BK 2 yrs? That might open up the inventory for you a little bit.

As a side note, read the stickies on this forum (Buying a Car after BK) if you haven't already. The advice is very good.

[BKDefender]

EXACTLY StartingOver08 - Car dealers make more money by bumping up their financing rates than they make on the sale of the car. You're already approved, screw those guys and buy what you want, on your own terms.

--William

[notavictim]

Thanks guys - I guess they got me nervous and doubting the quality of using the Cap one blank Check. To me it looks above board. No strange small print. Am I missing anything?

[notavictim]

Here is some interesting info sourced from Informa Research Services Inc. and J.D. Power and Associates:

Informa's analysis of the rates lenders are offering to consumers in different credit tiers shows that between January 2009 and March 2010, the average rate offered to consumers with top-drawer credit -- FICO scores in the range of 720 to 850 -- dropped to about 5.8% from 7.1%.

The rates for customers with middle-tier FICO scores in a range of 660-689 were being offered loans at an average rate of about 9.4% in early March, down from an average of 10.2% in January 2009.

But people whose credit scores fell below the 660 level were offered loans earlier in March at average interest rates of about 13.2% -- up from about 12.9% in January 2009.

After the late-2008 financial-market meltdown, getting customers with credit issues into a new car loan was hard work. Customers needed to put down a third of the car's price or get co-signers if their credit scores weren't top notch, Mr. Gorham says. Now, even the consumer with a weaker credit score might get the loan, as opposed to being denied, dealers say.

[LSUTiger32]

Some of the things I've been hearing from dealers:

"A new car/luxury car with a high payment is good for credit and financing..."

I won't mention what I think about a FREAKING $30K car loan but this was funny. That should be in Used Car Salesmen for Dummies. Talk about a load of crap.

[notavictim]

What a Cajun lol. Come on just say it -

Anyway, I've been following the stickies on how to negotiate online and it has been working. I've got a $28K 2010 Passat down to $24.7 which is almost 1400 below invoice ($26,162 which includes destination fee).

[notavictim]

Well, pulled the trigger on a 2008 4runner. Dealer absolutely cringed at the Cap 1 check and I don't blame them. They are very complicated at the end of the day. Pros: they give you some confidence that there is a light at the end of the tunnel. They help you get better financing later through the dealers. Cons: dealers hate them because they are a pain in the butt to process. And you'll end up with other means of financing.

Ended up with Chase Custom at a painful but better than cap one: 10.5% 24 months - yes 24 not 6 months of paying as agreed and I can move to Chase regular and knock 3 pts off. No weird fees. No penalty to pay off loan early.

Cap 1 is the first great step for many of us. I will thank then for that. The key is to understand the loan to value part...and plan to put some serious money down on the car to go through with the cap 1...