Edmunds Answers

Voted Best Answer

  • avatar karjunkie 04/07/09 10:33 am PST

    You'll need a credit score of at least 680 to get approved for 0% APR and typically no less than a credit score of 600 to get 8% APR. When you apply for low-APR financing, the car dealer runs your credit information by the manufacturer's financing division (most big manufacturers have their own credit divisions that operate dealer financing). Usually, the approval decision is based on your FICO score, as well as your income. So who qualifies? Good question. It varies by manufacturer. If you're in the market for a Toyota, for example, your credit will have to fall in the top two tiers (out of nine) that the company uses to categorize customer credit. Unfortunately, the manufacturers won't get more specific than that, but it pretty much goes without saying that if you're about to take out a loan (any type of loan), then you should review your credit report beforehand to make sure there aren't any errors or omitted information that could negatively affect your score. If you don't qualify for 0% or low-APR offer (or decide that the rebate is a better deal), be sure to shop around aggressively for the best rate on your car loan. In addition to dealer financing, be sure to price loans from your own credit union or bank. For many drivers, the rebate is the better deal anyway. Just which is more beneficial depends (in part) on the interest rate you'll be charged if you take the rebate, and how long you plan to keep the car. Generally speaking, the longer you plan to hold on to it, the better low-interest financing will be for you.

Answers

  • karjunkie 04/07/09 10:33 am PST

    You'll need a credit score of at least 680 to get approved for 0% APR and typically no less than a credit score of 600 to get 8% APR. When you apply for low-APR financing, the car dealer runs your credit information by the manufacturer's financing division (most big manufacturers have their own credit divisions that operate dealer financing). Usually, the approval decision is based on your FICO score, as well as your income. So who qualifies? Good question. It varies by manufacturer. If you're in the market for a Toyota, for example, your credit will have to fall in the top two tiers (out of nine) that the company uses to categorize customer credit. Unfortunately, the manufacturers won't get more specific than that, but it pretty much goes without saying that if you're about to take out a loan (any type of loan), then you should review your credit report beforehand to make sure there aren't any errors or omitted information that could negatively affect your score. If you don't qualify for 0% or low-APR offer (or decide that the rebate is a better deal), be sure to shop around aggressively for the best rate on your car loan. In addition to dealer financing, be sure to price loans from your own credit union or bank. For many drivers, the rebate is the better deal anyway. Just which is more beneficial depends (in part) on the interest rate you'll be charged if you take the rebate, and how long you plan to keep the car. Generally speaking, the longer you plan to hold on to it, the better low-interest financing will be for you.

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