Do You Still Qualify? Many Car Loans Now Require At Least A 720 FICO For Basic Financing!

The era of easy auto loans has come skidding to a halt.

Mortgages were among the first consumer products to be hit by the credit-market freeze. Now car loans and leases are drying up as dealers, auto-finance companies and other lenders are having trouble finding money to lend to car buyers. The upshot: Those with less-than-stellar credit are getting shut out of loans, and even some so-called prime borrowers are having trouble getting financing.

"You have to just about be walking on water to get financed," says Mike Jackson, chief executive of AutoNation Inc., the largest U.S. chain of dealerships. He added that the subprime market is "basically almost closed" but "even with our prime customers, banks are looking for a reason to say no."

AutoNation dealerships sold 532,862 light-duty cars and trucks last year, and this year, amid the credit crunch, that number could fall by as much as 20 percent, Jackson says.

2008 Paris Auto Show

2009 BMW 7-Series



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enthusiastx11 - 10/6/2008 12:42:13 PM

+2 Boost

the credit markets are truly frightening. maybe now consumers will understand the the rescue package was the very LEAST congress could get off their asses and do.

this will wreak havoc on the auto industry going forward.

Agent009 - 10/6/2008 12:54:00 PM

+1 Boost

I was talking to a doctor friend over the weekend and she was going to pick up a new LS on Saturday. She came back without the car stating that there was a judgment for someone else showing up on her credit record and it nixed the deal.

The bad thing is this has been something she has attempted to remove for over a decade and was easy to see it wasn't or ever was her. A simple affidavit always resolved any issue in the past with it.

However the financing says nothing must be on the record even if it is an obvious mistake (such as this).

snatchandgrab - 10/6/2008 12:57:28 PM

+2 Boost

I forsee a lot of Dealerships going bottom-up.

AMiodynski - 10/6/2008 1:08:15 PM

-1 Boost

Sadly, the dealerships closing will be the one's that had a majority of secondary clients...

Good bye Kia, Hyundai, Ford, GM, Nissan and any dealership that would make a living on secondary deals.

w209w114 - 10/6/2008 1:19:10 PM

+1 Boost

They estimate as many as 300 dealerships will be closed by the end of this year

w209w114 - 10/6/2008 1:18:31 PM

+2 Boost

Ive been financially responsible my entire life and when these are the times it sure pays off.

rocker - 10/6/2008 1:38:29 PM

+1 Boost

Truth be told a lot of good people have less than stellar credit ratings. But the lesson is live within your means. We purchased a home for half of what we could afford. We have one car paid off and another with less than one year on the loan and if it wasn't for my wife we would have 4 brand new cars. In other words, she is stable and I am unstable. Opposites attract(so says PAula Abdul).

AMiodynski - 10/6/2008 6:08:16 PM

+1 Boost

I'm the same way. Wife keeps us in check. I'm glad she does. Atleast we can sleep at night, and not worry about how are we going to pay for this now.

enthusiastx11 - 10/6/2008 8:37:23 PM

+1 Boost

live within your means. bingo. this is something that 90% of the american populace seems to have forgotten for 2 decades.

commander104 - 10/8/2008 12:34:19 PM

+1 Boost

Amen to the fiscally responsible wives. Mine recently discovered mint.com for budgeting. I finally saw on the screen that my net worth was less than -40K (student loans). Yeah, that's a negative sign.

golfer38 - 10/6/2008 1:48:45 PM

0 Boost

Auto finance has required a 720 "platinum plus" score since the lending institutions went to a score only rating system a number of years ago. This is nothing new.

Dealership's numbers are down because of lack buyers, NOT because of any change in lending policies. There is simply a large decrease in floor traffic.

Now I'm sure that sub prime borrowers will have a harder time getting a loan, for sure. That tends to effect low level new cars but predominantly the used car market.

Agent009 - 10/6/2008 2:07:53 PM

+1 Boost

Read the article a bit better please. Tighter restrictions are show those walking in are not qualifying. Actually down about 20%, so the issues are no buyers and less buyers can get qualified.

golfer38 - 10/6/2008 4:04:17 PM

0 Boost

I don't need to read the article from these "experts". I am actually in the industry with 19 years of experience. Unlike you, I live it everyday. What I'm telling you is accurate and real life, not conjecture.

sector - 10/6/2008 3:06:43 PM

-3 Boost

thumbs down :(

now broke middle class can't lease Bimmers any more...

BMW = Broke Middleclass Wannabes

QuantumMatrix - 10/6/2008 3:23:12 PM

+5 Boost

Nope they sure can't auto001, now they will go to Toyota and Lexus where they can lease and finance for ZERO percent interest...

LMAO...

Whelan - 10/6/2008 4:30:03 PM

+2 Boost

They should have given the package to the US citizen instead, even with taxes they would have gotten 30% back which would have been a lot and left each US citizen over 18 just about 200,000 dollars. Pay off loans, pay off cars, houses, buy stuff. Guess what, you just stimulated the economy and leveled off credit. :-)

rocker - 10/6/2008 5:27:10 PM

+1 Boost

excellent thought, god knows that package really helped alot today adn the end of last week

Htay7500 - 10/6/2008 5:47:12 PM

+1 Boost

2 of the closest ford dealers I'm familiar with closed their doors within a 6 month period..

2ndbimmer - 10/7/2008 11:44:48 AM

+1 Boost

I doubt it will be 720. Even if you do not live within your means, at least make some payments on what you owe! as long as you are not late, you are fine. i have been late a few times on basic bills and it didnt show up on my credit report. but, i was never late over 3 months, so it wasnt reported. at least make minumum payments.