Terrible Credit but Loan Approved!

[spearmint]

I don't understand this. My credit is dreadful and I plan to file Ch7 soon. Recently, though, my old Toyota had problems. It's on its last legs. Anyway, the service dept at the Toyota dealership suggested I try to get a loan for another one. Within two minutes the head salesman came over, took my app, and later that day I heard I was approved!!! High interest rate but approved. (I did mention I wanted to buy a used car around $10K though).

I don't understand. My credit rating is about 500 so how come I was approved????

I decided to fix my old car and try keeping it running for another six months but soon I will have to get another vehicle. I am just confused as to how I could get approved! Is it because it was Toyota and they are having problems right now?

It's making me wonder if Ford would approve me! (I think I want to get an American made vehicle this time.)

What do you think?

[StartingOver08]

Spot delivery is alive and well in America...I bet they were going to let you take the car home and then in a couple of weeks call you with a change in terms.

You made the right decision. The first thing you do when trying to get out of a hole is to stop digging.

[spearmint]

How can they let you take a vehicle home - after signing papers - and then say they want to change the terms?

[NHC]

Spot delivery is alive and well in America...I bet they were going to let you take the car home and then in a couple of weeks call you with a change in terms.

You made the right decision. The first thing you do when trying to get out of a hole is to stop digging.

Not only would they have called to say the terms were changed but on top othat they would 'really need a few grand down to keep the payments where you want them'...oh, and they don't have your old car anymore so forget about renegging on the whole deal...and even better, should you decide you don't want the "new" car and the "new" terms I'm pretty sure that in signing all those other 'car' papers you would have signed a nondescript little piece of paper that says you're willing to pay them 50 bucks for each day you drove the car....???....I hate Stealerships.

[justbroke]

There is a different "scoring" model used for car loans, than there is for homes. Almost everyone has heard of FICO, but hardly anyone knows that a different scoring model is used for cars.

Very generally speaking, if you haven't ever had a car repossessed and have had relatively good payment history with auto loans, your car score is going to be great. I remember when my score started to tank (into the 600s) yet I was easily approved for a Lexus SUV and Cadillac Escalade SUV with 3% financing (Thankfully, I never actually went through with the purchase!)

I do agree with the others, although I have never had that problem. I always made sure I had financing before I ever walked into a dealership. The old "take her home and just leave your title and old car here" is a good indication that there is no financing.