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Auto Refinance Advice Needed

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Hey Everyone,

 

I could use some advice.

I have two auto loans that I need to refinance.

One is for a new work truck that I bought about three months ago. I took the rebate from the dealer with the intention of refinancing after a few months - the standard tier 1 rate was higher than what is offered by my credit union. The truck is in my name and on my personal credit report because putting it in the business name would have not allowed me to take advantage of some of the benefits offered by the dealer.

I also have a personal vehicle with a lease that is ending, so I need to roll that into a new loan. This car is more for fun and taking to the track, and I rarely drive it around town.

I have a third vehicle, and SUV, that is for personal use. I have ordered a new SUV to replace this one.

My plan was to refinance the truck and the car the same day as I took delivery of the new SUV that will replace the current SUV. I figured that was the best way to not freak out my creditors, and that it would minimize the impact on my credit score.

Unfortunately, the new SUV has been held up at the port for 5 weeks so far, and the dealer has no clue when it will be released for delivery. I really need to refinance the truck and car now, but I don't want to jeopardize my chance at getting a decent rate on the new SUV when it finally is released for delivery.

My EX FICO score is 740 according to Wells Fargo and one of my credit cards.

My EQ score is 717 and TU is 688 according to Credit Karma.

My EX & TU reports show three medical collections from 2015 that I am in the process of trying to get removed.

I have plenty of income to support loans for all three vehicles.

 

So what should I do? Should I refinance the truck and car now, or wait for the new SUV? What will cause the least impact to my scores?

Also, would it help to sign up for a credit monitoring service that shows all three FICO scores?

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3 hours ago, MarvBear said:

Do you know what LTV you will need to pull off the refinance?

I do not. But when I went to the credit union a couple weeks ago, they said I would have no problem refinancing both vehicles. 

 

I have a decent amount of equity in the car coming off lease. KBB shows it being worth about $35-37k and the balloon payment is $27k. 

And I have about $2k in equity on the truck (I got a hell of a deal when I bought it). 

 

I can go back and ask that specific question if needed. 

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18 hours ago, MarvBear said:

I would do it now then, based on what you said about your credit union.

Thanks for the advice. I’ll go there this week. 

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Well, I had some time set aside to go to the credit union tomorrow to do the two refinances. But I got a call yesterday that my new SUV has been released by the port and I should have it in a few days. So I’m going to stick to my original plan and do all three loans on the same day. 

 

Side note... the new car sat at port for 5 weeks. I went to the dealer on Monday to voice my displeasure to the sales manager about their lack of communication and that I was about ready to demand my deposit back. Less than 48 hours later the car is released from the port. Coincidence? I think not. 

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11 hours ago, cv91915 said:

I don't think the local dealer's sales manager has that kind of control over international logistics.

It’s a bit of a long story, but the cliffs notes version is that the dealer screwed up. 

 

If you custom order a car and the dealer tells the regional office that it’s a sold car, it goes through the port before cars that are just going to sit on the dealer’s lot as inventory. The sales guy didn’t mark it as sold in the computer. And the manufacturer seems to be holding unsold cars with this engine at the port right now. Supposedly because of CAFE compliance.

 

I’m sure the sales manager or GM called the regional office to fix their mistake.

Edited by DPB

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Good news!!!

 

I was approved for Tier 1 rates for all three vehicles. I wanted to do all three loans on the same day, but the Mercedes dealer didn’t have everything ready to go until 3pm on Wednesday. By the time I got out of the dealership it was after 5pm. Since Thursday was Thanksgiving I had to wait until Friday to do the two refinances. 

 

I ended up up not using the credit union that I have accounts with. I spoke to the branch manager and she told me that they are getting very strict with auto loans because their now former underwriter had approved a ton of bad loans recently. They wanted two years of tax returns plus balance sheets from both of my businesses and some other paperwork to verify my income and assets. Apparently this is SOP there now on all loans, even though the monthly soft pull from EQ showed my score being 790. So I decided to go elsewhere to save me many hours of searching for and copying documents. 

 

The new Mercedes is financed through MB Financial at 4%.

 

For the Audi that was coming off lease, I used the dealer’s finance department since I had to go there to sign paperwork to end the lease and officially purchase the car. Audi Financial’s best used car rate is over 5%, so they shopped the loan to about a dozen lenders (that’s the only negative because it ended up adding about a dozen inquiries to my credit file). I got the best rate from a large credit union with quite a few branches within 10 minutes of my house. So now that car is financed at 3.25%. It’s 4% minus credits for getting gap insurance through them and for auto pay. And the gap is refundable, so in a couple months when the LTV drops below 100% I’ll get a refund but keep the rate discount. 

 

For the truck, I went into a branch of the credit union that I did the Audi loan with. I asked if they would approve me for a second loan. They took a look at the loan for the Audi and said it shouldn’t be a problem, but that they’d have to do a new application and hard pull on my credit. They use EQ, which is my highest score. So I went ahead with the application, and they approved it. At this point they were getting ready to close for the day, so I’ll be going back tomorrow (Monday) to sign the paperwork. This one is also the same 3.25% rate with discounts. Considering the original loan from Ford was over 7% due to me taking the rebates when I bought the car, it’s a massive savings. 

 

While led I had my credit files unfrozen I decided to apply for a couple credit cards (I only have two and feel I need some more trade lines). I got approved for an AMEX Gold. I applied for a couple more cards the next day, but by then all the inquiries had hit so I was declined. Oh well. It would have been nice, but the AMEX was all I really needed. The rest would have just been a bonus. 

 

So it seems to have all worked out pretty well.

 

Marv, since you asked, the credit union offers 125% LTV. I’m right at 125% on the truck and I’ll be under 100% on the Audi once I make my second payment. Mercedes was willing to let me roll in about $12k in negative equity from the car I was trading in. So that would have been about 115% LTV. But I decided to pay that off. I used the $3k deposit from ordering the car as a down payment and financed the rest. 

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So I’ve thought about it for a few days, and I’m really annoyed that the Audi dealer had my credit pulled so many times. I had given them a list of three credit unions I wanted the loan through. I also told them to NOT run my application through specific banks. I had done a bunch of research first, so I knew which credit unions were offering the best rates.

 

So they completely ignored my instructions. I’ve verified that it isn’t an all or nothing thing either. The finance person chooses which lenders to shop the loan to. So instead of just three hard pulls, there were 11 from this one refinance. 

 

I’ve received the rejection letters from the credit cards that were declined, and every one of them state “too many inquiries” as the sole reason for rejection. 

 

Should I dispute the 8 inquiries that I didn’t approve? Also, would a “backdoor” call to the rejected card banks yield positive results if I explain that the dealership did?

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16 minutes ago, cv91915 said:

No, you should not dispute legitimate inquiries. 

Are they really considered legitimate if they are for banks that I specifically told the dealership to NOT apply to?

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12 minutes ago, DPB said:

Are they really considered legitimate if they are for banks that I specifically told the dealership to NOT apply to?

Do you have either a recording of the conversation or a copy of the instructions you gave them in writing?

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14 minutes ago, cv91915 said:

Do you have either a recording of the conversation or a copy of the instructions you gave them in writing?

No. Maybe I have to start recording conversations when talking about credit. 

Instructions were given to them over the phone and in person, so nothing in writing. 

Are they able to tell the credit bureaus that it was their mistake and remove the inquiries?

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12 minutes ago, DPB said:

No. Maybe I have to start recording conversations when talking about credit. 

Instructions were given to them over the phone and in person, so nothing in writing. 

Are they able to tell the credit bureaus that it was their mistake and remove the inquiries?

You can certainly ask.  That's the side of the transaction to work, if you think it's worthwhile.  I don't see the upside of wasting your time.

 

Disputing the inquiries with the credit bureaus could have unintended consequences (you don't want your credit file inadvertently flagged for ID theft/fraud, for example).

 

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14 minutes ago, cv91915 said:

You can certainly ask.  That's the side of the transaction to work, if you think it's worthwhile.  I don't see the upside of wasting your time.

 

Disputing the inquiries with the credit bureaus could have unintended consequences (you don't want your credit file inadvertently flagged for ID theft/fraud, for example).

 

Ugh. Ok. And thanks for the advice. I’ll stop by the dealership in a couple days when I’m near there. I’m fine wasting 15 minutes of my time if there’s a chance. 

 

Otherwise, I guess I’m stuck with a ton of inquiries for the next two years. 

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13 minutes ago, DPB said:

Ugh. Ok. And thanks for the advice. I’ll stop by the dealership in a couple days when I’m near there. I’m fine wasting 15 minutes of my time if there’s a chance. 

 

Otherwise, I guess I’m stuck with a ton of inquiries for the next two years. 

Inquiries aren't derogatory, they're just a record of fact.

 

Multiple auto inquiries in a short period of time on the same bureau are scored as one (which is minimal anyway).  Over 6 on any bureau aren't scored at all.  After 12 months they're ignored altogether. 

 

You have three collections on two of your reports.  Spend your time there.

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25 minutes ago, cv91915 said:

Inquiries aren't derogatory, they're just a record of fact.

 

Multiple auto inquiries in a short period of time on the same bureau are scored as one (which is minimal anyway).  Over 6 on any bureau aren't scored at all.  After 12 months they're ignored altogether. 

 

You have three collections on two of your reports.  Spend your time there.

Thanks for the info. I wasn’t aware of that. So maybe I’ll reapply in a year if I can’t get one of the declined cards to reconsider their decision. 

 

And I’m working on the medical collections. I spoke with an attorney already. He advised me to not proceed until after I got all the car loans completed just in case the CA decided to try and add the collections back to the EQ report. So now that all that is complete he’s going to draft a demand letter to everyone involved. 

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Are they able to tell the credit bureaus that it was their mistake and remove the inquiries?

No,   I have written letters, called etc, but have never had the ability to remove an inquiry placed via the dealership.

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