CHAPTER 7 - FINANCING

he majority of cars over $10,000 are financed. While car loans area bit simpler than leases, there are still complexities to be aware
of. The first thing to know is that the interest rates you receive arepredominantly based on your credit worthiness. A FICO score
over 700 on at least one of the major credit bureaus (Experian, Equifax andTrans Union) is considered to be “prime.” Below that begins the “nonprime”

and “subprime” sectors that often includes higher interest rates, variousstipulations (called “stips” for short) and sometimes exorbitant bank fees. (^)
Subprime accounts for about 40 percent of all car loans.

T

are. TIP: Before you go shopping, find out what your credit scores^

I say “scores” because they can vary from one bureau to another by a largeamount; I usually see variances of 20-30 points, but it’s not unusual to see
60-100 point spreads from high to low. You can get a free copy once a yearfrom AnnualCreditReport.com or the individual credit agencies.

Tighter regulations on lenders have made it not only easier to get yourscores, but also to correct inaccurate information on your bureaus. You can (^)
do this yourself or pay to have it done. The field of credit repair is full ofsketchy characters, so you must be careful if you decide to go that route. (^)