New Car Financing - A Numbers Game

Prime, Sub-Prime, Mid-Prime...so what are you? What does it all mean?

Your status when it comes to getting a new or used car loan can help or hurt you, but what institution you chose can also be a factor in getting a good interest rate and/or term.

Prime customers usually have a beacon score over 700.
Mid-Prime customers usually have a beacon score from 600-700
Sub-Prime customers usually have a beacon score under 600

There are many variables that can effect which category you are likely to fit. The following criteria will help determine what kind of loan he/she will receive:

• Term - How long do you want to pay off the loan?
• Monthly Payment - How much can you pay per month (based on your debt-to-income ratio)
• Residency - How long have you lived at the same address?
• Employment - How long have you worked at the same company?
• Liquid Funds - How much do you have for down payment?
• Trade-In - The value of vehicle(s) he/she will trade-in?

Dealerships have a responsibility to you to find the best loan available for your circumstances, for example, a sub-prime customer who visits dealer to purchase a used car might get a better rate on a new car. A Prime customer might get a better interest rate from a credit union than a bank so every option must be applied.

The Sales and Finance managers at Golling's have years of experience and work very hard to find the best possible loan for each customer. Many of our customers visit the lot knowing which institution they want to administer their loan, but our finance team has success finding institutions with better terms and rates by knowing their risk management systems and asking the right questions about each customer's specific situation.

Although Chrysler does not have it's own Financing, they work closely with Ally Bank (previously GMAC). Chrysler Family Dealers are encouraged to work with many loan providers to give their customers the broadest range of loan options.

Contrary to popular belief inquiries from a car dealerships and real estate companies do not effect your credit score and multiple inquiries from lenders only count as one inquiry. The credit bureau will understand that you are trying to purchase one car and will count multiple lender actions as one action.

If you are concerned your beacon score might put you in the sub-prime category, but you are ready to start your car search, start putting some money aside for a solid down payment. This will help a lot when you find the car you want.

Golling's Arena Chysler Dodge Jeep Ram General Manager says, "Rates are very low right now. We have programs for customers in all three categories. Before you sign your loan contract, make sure you speak with an experienced finance manager. An excellent car dealer will take time to make sure you are getting the loan that works best for you."

Call us at 937-276-5056 and ask to speak with our new or pre-owned sales or finance manager to get started. You can also fill out a finance application on our website.