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Started By
Message
re: Buying a new/used vehicle is retarded vs 15-20 yrs ago
Posted on 3/10/25 at 7:34 am to CocomoLSU
Posted on 3/10/25 at 7:34 am to CocomoLSU
quote:
but how would paying it off right away (i.e. early) negatively affect your credit score?
The system is set up to reward people for paying interest. They want you to pay on time, but they want those interest payments. Paying off the loan excessively early takes away from those monies that were budgeted to be earned. Your credit typically won't be hurt too bad if you pay off a loan 25% early. Once you start getting into the 33% plus early payment, that's when the credit bureaus will ping you.
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Posted on 3/10/25 at 7:38 am to SuckerPunch
If you can’t pay cash, you can’t afford it.
Posted on 3/10/25 at 7:40 am to BabyTac
quote:
If you can’t pay cash, you can’t afford it.
I got enough cash under my pillow to buy a new vehicle.
Posted on 3/10/25 at 7:44 am to Westbank111
Ummm...you can carry zero balance on credit cards and maintain a FICO at 850+
The Fed is not the goblin of credit scores, it has however allowed the USA to be the biggest and strongest economy the world has ever known.
It took far less than 150 years to make the whole world run on the US dollar. Much older countries like China and the EU are envious.
The Fed is not the goblin of credit scores, it has however allowed the USA to be the biggest and strongest economy the world has ever known.
It took far less than 150 years to make the whole world run on the US dollar. Much older countries like China and the EU are envious.
This post was edited on 3/10/25 at 7:46 am
Posted on 3/10/25 at 7:45 am to forkedintheroad
quote:
Pay off loans early and they will absolutely knock your score.
Oh please. That's such horseshite. First, there is a difference between secured loans (auto and home) and unsecured revolving credit. If you're paying off a secured loan within six months, what is creating the "hit" on your credit is the fact that you did a hard pull for a $20-30k loan, not the fact that you paid it off early. If you finance with 5/3rd, for instance, any they use Equifax as their credit source, Equifax will usually update that you attempted, and funded, a 20-30k loan between two weeks and a month. The other two bureaus (Transunion and Experian for US consumers) will take longer to get that information, since they weren't the source bureau. They'll normally update within 45 days. There also is no "one" credit score anymore, a lot of people use custom models to target consumers in certain demos. Lenders can use a default score from each of the three bureaus, a FICO score, or they can roll their own to target the kinds of people that will pay 19% on a car loan, even if it gets repoed less than a year in.
If you pay off a loan in four months, other than the credit pull, all any other bank is going to see is "on time payment for four months, loan closed." That information will take a bit longer to filter back through the bureaus to show that you no longer have an outstanding $20-30k loan.
Posted on 3/10/25 at 7:51 am to SuckerPunch
quote:
ant negotiate without financing these days
If you believe this, you should stick to riding a bus.
This post was edited on 3/10/25 at 7:53 am
Posted on 3/10/25 at 8:20 am to Townedrunkard
quote:
I don’t know what yiu are talking about
Seemed pretty clear to me.
quote:
I have near a perfect credit score and paid off nearly every big purchase early. It only goes up.
Well, that's not been my experience. We have 0 late or missed payments with 100% paid on time (or early) for going on 20 years now. We're both in the 820's. We paid off her vehicle and saw a dip to just below 800, Makes zero sense to me. No new inquiries and no new debt out of the normal range. We're 100% on time and only have 3 lines of credit, one which we don't even use. I don't understand the credit game at all.
Posted on 3/10/25 at 8:22 am to Spelt it rong
quote:
We usually put half down and sign a 4 year but pay it off in under 2. Credit score drops like a rock each time
Don't you just love this mentality. You buy on credit, pay it off unlike so many others that go bankrupt from a pile of debt and they penalize you because they didn't have the opportunity to milk you for more interest payments. They get their money back with some interest and they are still not happy about it.
If I were a business, I'd want people to pay their debts in full, no matter how they do it instead of dealing with them going bankrupt or just skipping out on the notes.
Posted on 3/10/25 at 8:31 am to TackySweater
quote:
It’s good for your credit score to carry some balances and show you are a responsible borrower. In creditors eyes, it’s much better to have years of responsible borrowing as opposed to never having borrowed anything.
This is true.
But frick this and frick banks for this (and other things).
This is why it’s so freeing to never need any credit if you can get there. Your credit score doesn’t really matter much at all.
Posted on 3/10/25 at 9:20 am to Jack Ruby
quote:
Dealerships figured out it's much more lucrative to become a bank masquerading as car seller than to be an outright retail outlet.
Went with my wife to buy a truck last month and told them up front we had a certified check from the bank and would pay cash for the difference. The buyer application form was on bank letterhead and page 2 (which I had to ask for them to give me) said we authorize them to pull our credit. I sat in the finance guy's office with my arms folded like a toddler for 20 minutes saying "I ain't signing it" before he gave up and said they didn't need it anyway.
That's how important loans are to them that he fought me so long on a Friday night just to run my credit.
Posted on 3/10/25 at 9:29 am to SuckerPunch
Tried buying a used car this weekend and they would only budge 3k. Wasn’t in the cards
Posted on 3/10/25 at 9:33 am to leftovergumbo
quote:
That's how important loans are to them that he fought me so long on a Friday night just to run my credit.
They go hard in the paint for a few reasons. First their buy rate on a loan is usually cheaper than the sell rate they give you. Meaning their partners with the bank and take a percentage point or two from the loan. Good luck trying to get their buy rate on a loan out of them.
Second is incentives. They’ll get money back or bonus rates if they sell a volume of loans. They can usually get another half point or so that they can. Pass on to a buyer.
Posted on 3/10/25 at 11:55 am to leftovergumbo
If you ever want to see a car salesman at a loss for words, just go to a lot and look around. When he approaches and you start small talk with him, he will probably ask you where you work.
Just tell him you work at a bank and he will get really quiet really quick.
Just tell him you work at a bank and he will get really quiet really quick.
Posted on 3/10/25 at 12:06 pm to CocomoLSU
quote:
I’m ignorant on how this works I guess, but how would paying it off right away (i.e. early) negatively affect your credit score?
The credit bureaus factors your “mix” of credit into your score. If you have a credit card and a mortgage, then add an auto loan, then immediately pay it off, the “mix” component takes a hit and you also have a new hard inquiry to go along with what looks like “no change to your available credit”.
Other issue could the average age of credit. If a large chunk of your available credit is younger than the car note (say you bought a house after you bought the car), your credit gets “younger” when you pay off the car. That’s a ding.
Obviously these will impact people differently based on what their credit “looks like” (not how good/bad it is).
This post was edited on 3/10/25 at 12:12 pm
Posted on 3/10/25 at 12:08 pm to SuckerPunch
quote:
Cant negotiate without financing these days
Yes you can.
Posted on 3/10/25 at 12:10 pm to Spelt it rong
quote:
I don't understand the credit game at all.
Don’t bother trying. It’s nonsense.
You’re in the 820s. Just keep paying on time and monitoring for fraud. Don’t worry about all the other crap. Your score could nosedive 50 points and you’re still getting the best rates. Literally doesn’t matter.
Posted on 3/10/25 at 1:06 pm to ChatGPT of LA
Posted on 3/10/25 at 1:07 pm to Tr33fiddy
quote:
Credit is great but it shouldn't be required to purchase something. If I want to buy a new car outright I should be able to do so.
You absolutely can. You just may have to pay more for the same car than if you finance.
Posted on 3/10/25 at 1:09 pm to BabyTac
FYI some vehicles require financing to acquire because dealers are scums
Posted on 3/10/25 at 6:40 pm to fareplay
I had to buy a car last Sept. Mine was totalled in accident (not my fault. never caught the culprit)
so I was going to pay cash and the dealer put up so many roadblocks, (and I can understand not wanting to take some dude's personal check on a Sat.)
so they said" just finance and pay off when the account is set up and you get the first statement." which I did. right now, I could care less about my credit score.
so I was going to pay cash and the dealer put up so many roadblocks, (and I can understand not wanting to take some dude's personal check on a Sat.)
so they said" just finance and pay off when the account is set up and you get the first statement." which I did. right now, I could care less about my credit score.
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