hossb12

any of you guys who work at a dealer. Do scion dealers only finance through Toyota financing? I am used to dealers having lots of different fiancing sources. I was turned down for financing by my local dealer, they only used toyota financing, but was not given any other option except a cosigner. Is it just this dealer or is this the norm? Please let me know< the worst part is now that I drove the car(Tc) I love it and really dont want to use a cosigner. thanks

cliffy1

In most cases, TFS is the best option we have. There are second chance lenders, but they tend to have MUCH higher rates (think 15 to 23%). They are also much more picky about verifying income, time on the job, time in residence and such. Those "second chance" lenders also will normally require a higher down payment than TFS.

There is one other reason dealers don't like dealing with those lenders for a Scion deal. Those lenders charge a fee ranging from $300 to $600 to the dealership to process the loan. Federal laws prohibit us from passing that on to the consumer in the form of a higher selling price. Depending on the poarticular situation, we may also be limited in how much money can be made by the dealership on the financing end so it becomes unprofitable for the dealer to sell the car.

If you can't get a co-signer and your own bank will not finance you, you need to come up with a substantial down payment. If you can do none of the above, you need to look at another car where the dealership can mark it up enough to make it profitable to sell to you.

hossb12

Thanks Cliffy, now this is what Im dealing with. I went to another dealer and they are trying to get me financed. The deal is that my autoFico is 669 per the dealer, but becasue of some negative old trade lines they claim all they can do is use a secondary finance and the rates will be crazy like 18%!! Do you know if TF works like this? That even though the score is high they will refuse a deal? I just feel like Im getting shafted here and there is no way Im gonna 18%.

cliffy1

This is one I would not be able to answer without a lot more details. There are two parts to the finance process. The first is getting approved. That involves looking at income, job stability, credit history, debt to income, down payment and equity position (more on this shortly). The second part is the rate you are approved for. Obviously the first part is VERY subjective and the second is entirely objective.

Now... how could a person with a score in the 660 range be turned down and be forced into second chance financing? If your old credit problems involved a repossession, forclosure or bankruptcy, they want to see how you've paid other lenders since that happened. If you only have one credit card since then, there still is no track history for them to base a decision upon. If there was a repossession with TFS, you're done until you pay off the balance, even if that balance was written off years ago. Past due child support is also a disqualifier with TFS.

Another issue can be a trade-in. If you are trading in a car that you owe more money on than its worth, its going to take a large down payment to get you approved. Even without a trade, its going to take a decent down payment. On customers with shaky backgrounds, TFS wants to finance no more than 80% of invoice of the car. That's not 80% of the total out the door cost including taxes, its 80% of the dealer's cost on the car. So, on a tC that costs $17265, if you have taxes and fees of $800, your out the door cost is roughly $18000. Invoice is rouchly $16200 and 80% of that is $12960. You need to put enough cash down to be financing no more than that amount.

There is some flexibility with this. A co-signer helps. A good story helps. Yes, a good story. If you had medical issues a few years ago and you can show that the derogitory credit stemmed from that and there hasn't been anything bad since then, the dealer may be able to negotiate with TFS to get that down to 90% of invoice. Military deployments are another good story.

Really, it all depends on the specifics of the case. There are no rules and its very subjective. This is when dealer shopping is a huge benefit. Shop for the dealer who is most willing to listen to you and work with you.

One other thing... if you got turned down by TFS at one dealer, another dealer can't get it approved for another 30 days unless there is a substantial change in the deal.

hossb12

thanks man. my bad trade lines are some very old (almost 7 years) charged off credit cards,so Im sure that doesnt look good. I have no repo,foreclosure or bankrupcy. I was just surprised that TFS would be so cut and dry. Ive never heard of a dealer be so casual about making deals, Iguess with 8 weeks wait time on Tcs they just dont care too much, the worst part is the car is ssuch a good value its tough to go and buy something else that is more money and I dont like as much.

cliffy1

Cut and dried? Its really far from that. Have you asked them how much down payment would be required for TFS to approve you? Your score will put you at 5.65% if you can get the approval. See if they wont work with you on this if you really want the car.