A lot of clients ask me when they should get their car. My question is, is your credit holding you back from getting your dream car? Let’s talk about this for a second.
I’m going to read some metrics to you guys that I think are very interesting and if I can save you thousands and thousands of dollars, would you be interested?
Here’s the deal. 780 credit score or higher is considered A1 credit. Okay, so if you’re a 780 or higher, you’re what they call super-prime.
Best rates across the board, usually no issues with interest, low down payment.
We’re going to talk about that in a second.
Low credit score. The bottom of the barrel, you’re talking about getting the worst rates and you’re talking about getting the lowest of the lowest vehicles.
Bad rates, high down payment, horrible interest.
Okay, so no credit or low credit equals you not being able to get the car, your dreams.
The average score, 713, so far in 2019. The average score to get a vehicle is 713.
That’s for a new car.
For a used car, 658 is your credit score.
Where do you guys fall in that category?
Okay, I’m also going to read something to you here.
Super prime, and you’ll notice that as you go lower, you’re going to see this.
Your interest rate actually rises. So let’s say you guys are like a 780 to 850 credit score.
You’re looking at about a 4% new and used 4% interest rate.
661 to 780 credit score, 5% new car, 6.38% used car.
600 to 660, 7% new car, 11% used.
See how the used starts going up?
501 to 600, 12% new car, 17% used.
And what they call deep subprime, which is between 300 and 495, you can expect a new car to be able to pay 15% and 19.5% for your used car.
That is unbelievable.
Let me share something with you. Excellent credit. You’re talking about 500 to $1,000 down payment, okay?
On a $30,000 vehicle, $469 a month.
That same vehicle, okay. You’re at a 780 credit score, $472 a month.
The same vehicle, if you had a 540 credit score, 3 to $5,000 down, $649 a month, and you’re going to pay $11,000 in interest in that five year period.
Is that absolutely absurd or what?
Why in a million years would you want to pay $11,000 more for a $30,000 vehicle and 650 a month versus $475 a month for the same exact…?
We’re only talking about a $30,000 vehicle. You start going up into the $50,000 and you’re getting hosed.
I mean this is just, so now the question sometimes people ask me is if you can get me credit ready, am I going to be ready financially?
The question is can you afford the vehicle? Right?
So here are a few things that I’ve put together for you guys to be able to determine whether or not you can afford the vehicle if your credit was in a good place.
The first thing is can you put 20% down on your vehicle?
Okay. This is a good way to determine whether or not you can actually afford the vehicle if you had a 780 or 750 credit score, right?
Or even if you had a 550 credit score, look at this metric.
Can you put down 20%? Okay.
Number two, could you finance it for four years instead of five, six and seven?
Finance it over 48 months as opposed to the longterm because then you’re just paying higher interest. Okay.
And then number three, your car payment does not exceed 10% of your monthly income. Okay.
So if your monthly income is $3,000, your car payment should not exceed 300, okay.
So that’s what you want to look at. Like you want to look at those three metrics, figure out if you can afford it first.
If the answer is yes, then we need to say, okay, where is your credit score?
So here’s what I want you guys to do.
Set up, if you have not already, freecreditreport.com, okay.
I want you guys to set up freecreditreport.com, fcr.com.
That is Experian based. It’s a free service. I don’t get a penny off of it. Okay.
I’m not advertising for the company, but it’s an easy indication of a FICO model. Right?
Whereas Karma is going to be vantage 3.0 and then other scoring models.
This one is actually from FICO where we’ll be able to see different FICOs for the car models as opposed to just, so you’ve got FICO 2, you got FICO 5, FICO 8, FICO 10.
And I’ll be able to determine based on that where exactly you are.
So here’s what I want you to do. I want you to set up freecreditreport.com.
Now what I want you to do is post in comments your FICO score. Okay? Now if you go through after you set it up, you’ll be able to see FICO 2, FICO 5.
I want the score for FICO 2. That’s the model that I need.
So I need the one for the vehicle. Okay?
I need you to post in comments what that scores.
Before you think about going to a car dealership and buying a car, whether it’s used or new, okay.
Let uncle Mike help you because I don’t want you to pay $5,000 down and $700 a month for a $30,000 vehicle when I can look at your score and help you determine what you need to be able to get that vehicle at a much lower rate.
That’s why I come to you guys every day. How do I come to you every day?
I do it because I want to save you money, save you time, help your credit, make you money.
Listen, I was told this one time and I truly believe it.
If you want a client or a customer for life, make them money. So that’s what I want with you guys. I want to be able to not only help you with your credit but also make you and save you money.
So if I can save you thousands of dollars in interest and your down payment that’s making you money, okay?
Now post below your actual score for FICO 2 and then I’ll be able to determine where you’re at and give you the best reliable information possible before you go apply for the vehicle.
It still does calculate your score. Tradelines still count in the consideration of a vehicle and or loan as of 2019.
Here we are in 2019. We are still good.
So it may be, hey, we need to put a high limit trade line on so we can lower your overall utilization because maybe you’re at 80%, 90% and as we drop the utilization by putting new credit on your credit report, that’s going to lower utilization and also raise your score.
Okay, maybe it’s hey, I’ve got a repossession, okay, and I’ve got a bunch of collections, I’m at a 520 score.
Look, I need the help.
I need some credit repair and a tradeline.
Okay, we can help you there. Whatever the case is. Maybe you just applied for 50 places or maybe you’ve already been to the dealership and got a ton of inquiries and you need inquiries removed and you need some positive history. We have that combo.
We can help you with it as well. But set up a free credit report, post your score for the FICO 2 underneath in comments.
Give me a thumbs up so I can help you guys.
And also turn on the bell notification so that way every single day you’re getting the videos and we’re helping you.
My name is Mike with Wholesale Tradelines and until tomorrow, take care.