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Discussion Starter · #1 ·
I got good news and really bad news today. The good news is I got a call from Chevy today saying my car is in transit and should arrive at the dealership in a couple of days. The bad news is I got a letter in the mail today saying my loan application was denied because the loan amount is to high and I have too much debt.
My income is high enough that I could afford the monthly payments on 72 month financing at the 4.9% financing they would have given me.
Any advice on how to get financing? I was denied through the financing offered through Chevrolet.
 

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Try your local Credit Union or bank- do you have a relationship with one? If so, they will likely be more considerate than going through what is known as Indirect Lending - all based on credit scores, which suck. You may need a greater down payment/equity. I am former banker...I wish you the best
 

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Discussion Starter · #4 ·
The weird thing is my credit score was 750 when they checked at the dealership but my rejection letter says 670.
 

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The dealer finance sources use a different credit scoring system that lowers one's score from the Credit Bureaus - I don't understand how/why, but if you know a local banker, they will look at 'you' and not some automated system. If you don't know a banker, ask around among friends.
 

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Bunch of factors. Credit score, income, down payment. I got mine in AZ my loan took literally 5 minutes to process. I have about 680 score and high income. I put 20k down and got approved in 5 mins with no verification, ie no pays tubs, no bank statements. I got 4% interest and Chevy did shopping for me. May need to see if you can increase down payment or ask what banks they shopped. Otherwise your local credit union etc. One thing I found out is banks don't like to give car loan notes of more than $50k so if u can keep loan under that would be helpful. Another option is look into a lease.
 

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Discussion Starter · #8 ·
Ok this is crazy. False alarm. The dealership just called me and said my car just arrived and would be ready to pick up tomorrow! I told him about the loan rejection letter and he said they apply for the loan with a few different lenders and accept the loan with the lowest rate. They reject the other lenders thus my rejection letter.
Thanks everyone for the financial advice. I will get my finances in order.
Also I didn't order this car, the dealership had it on their website as waiting for delivery and it wasn't claimed. I went to the dealership and signed for it and they said based on my credit score my loan would be approved. It turns out I was approved!
 

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Congrats! Glad it worked out. We'll have to have Arizona meet soon :)
 

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Great for you! Sorry bankers created grief, but great for resolution !
 

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Glad it worked out and I feel your pain. I just bought a Silverado last weekend and went through the same thing. I have high income but a fairly high debt load on my cards so my score is around 680. Dealership report came back 40 points lower! They shopped the loan and Ally (the old GMAC) came back 3 points higher than the bank they ended up placing it with. Came back 1.2 points lower then the "estimate" we originally discussed. So I'm happy.

Another thing to understand is larger dealers package loans to get better terms. They shop the banks with their weekly contracts and the banks bid on the batch. That let's the dealership get marginal people financed and roll more cars. My local dealer group moves about $20m in loans a month so the banks compete with each other to get the business.

Regardless, if you can get financed with your bank or credit union prior to walking into the dealership it makes the experience far less stressful.
 

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I'm happy for you
 

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'One size doesn't fit all' is a problem with Dave Ramsey
 

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I had a similar issue. Seems like the banks may be a bit nervous about the cost of the car when you have a high debt to income ratio. Additionally, I have three other cars in my name ( wife and two boys). I ended up having to use my wife as a cosigner since I didn't want to put any money down other than my initial $1k. You'll need additional money down to decrease the amount financed or you'll need a cosigner. Yes, I know....that sucks
 

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Not to be that guy, but it would be wise to put more down. Reason I say that is because with only 1k down on the base model you'll be look at over a 8 hundred dollars car payment. Which is insane! If you don't include insurance and taxes. If you want this car without the stress of thinking what might happen if I lose my job then put a bigger amount down, I say no less then 15k. Doesn't matter if you make good money if you spend it all before it even touches you're hand. This is from a guy who make 90+k a year. Please reconsider more down.
 

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Show me an extraordinarily low APR with gap insurance included, and I, too, would put the bare minimum down. It all depends on the particular set of circumstances.
 

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Show me an extraordinarily low APR with gap insurance included, and I, too, would put the bare minimum down.
1.99% APR (PenFed) and $149/6 month (Geico).

I put $5k down and financed the rest.

I could have paid cash, but why bother - the money is comfortably resting in a brokerage account earning over twice the APR of the loan.
 

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1.99% APR (PenFed) and $149/6 month (Geico).

I put $5k down and financed the rest.

I could have paid cash, but why bother - the money is comfortably resting in a brokerage account earning over twice the APR of the loan.
That is the general idea. But be sure to take risks and taxes which eventually must be paid on the brokerage account into consideration.
 
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