A question that our financial team gets all the time is: Do some credit scores get preferred financing? The answer is not as easy as yes or no. Everyone’s credit situation is different depending on age, their life situation, if they already own a car, and many other factors. Many people believe that certain people with higher credit scores have access to “preferred financing options”. This is not necessarily true. For example, here at Performance CDJR in Clinton, we do not have secret “credit tiers” that some people fall into and others do not. So for us the answer is no, we do not give people with certain credit scores preferred financing.
However, what is true is that higher credit scores typically get better interest rates. This is not up to us, it is the banks and our financial lending partners that determine interest rate for specific people. Credit score is definitely a part of their formula that determines a specific person’s car financing rate. There are many different reasons and causes for people’s credit scores. We know you, and when you’re here at Performance in Clinton, you’re family. However, the banks and our lending partners do not.
Therefore, all they have to go on when considering your interest rate for car financing is your credit score. If you have a high score, especially over 700, they assume that you will likely pay your loan off. Therefore, it is more likely that you will get a lower interest rate on your auto loan. If you have a low credit score, whatever the reason, it is simply more likely that you will get a higher interest rate. While this may seem unfair, it is unfortunately how the lending system works.
This is a fairly general analysis, because everyone’s financial situation is different. There are many other factors that go into a car deal, such as down payment, or if you trade in your current car to help pay for your vehicle purchase. We have helped thousands of people to buy a car, and all of them had different backgrounds and financial situations. Come see us on Warsaw Rd in Clinton, and let us help you too.