Car finance declined, why?

techcastoni

I have an existing car finance agreement that is 2 years into its 3 year contract. Dealership has agreed to take the car back and clear the finance on this if I'm upgrading.

So they put me through the system and I get declined for no apparent reason. I'm an existing customer of the same finance company, I'm earning more than I was when I got the first agreement and I'm putting down a deposit. Never missed any payments, don't have any other loans and I have several credit cards with decent credit limits.

I thought maybe for whatever reason my credit rating was poor so I signed up for Experian only for them to tell me that my score is 997 out of 999!

I've carefully calculated a budget for the car and I know I can make the payments quite comfortably. Plus I've also got the chunk of money I was saving for the final payment on the car I got on the first agreement.

In my mind, I'm a fiscally responsible customer with no history to suggest otherwise and yet money is being left on the table.

What really gets on my nerves is that I have friends and friends of friends who aren't earning as much as me, they don't keep up with payments and they do overspend yet they drive around in cars more expensive than the one I'm trying to get.

Can someone please tell me what I'm missing here?!

BoGoF

Oh dear the old Experian credit score again- totally meaningless as you have discovered.

How much do you earn and what debts do you have, including the existing car finance.

Oh and it's not a competition to have a more expensive car than your friends, or it shouldn't be.

Apples2

Sounds like between the lot of you, none of you actually own a car.

Just buy one with the cash you have, stick your pseudo payments into a savings account until you can buy one outright, you will save yourself thousands.

techcastoni

BoGoF wrote: »

Oh dear the old Experian credit score again- totally meaningless as you have discovered.

How much do you earn and what debts do you have, including the existing car finance.

Oh and it's not a competition to have a more expensive car than your friends, or it shouldn't be.

I'm on £30k-£40k and I have no debts other than the existing car finance which I could pay off. I know it's not a competition, but I don't understand how they were able to get the finance and I'm not.

techcastoni

Apples2 wrote: »

Sounds like between the lot of you, none of you actually own a car.

Just buy one with the cash you have, stick your pseudo payments into a savings account until you can buy one outright, you will save yourself thousands.

Not particularly helpful, but if it makes you feel better to make a comment like that then so be it.

Not sure what I said that makes you think that I or the people I know have a car. I'm not buying a car to 'save myself thousands' as you put it. I'm well aware of how much a car costs thanks.

BoGoF

techcastoni wrote: »

Not particularly helpful, but if it makes you feel better to make a comment like that then so be it.

Not sure what I said that makes you think that I or the people I know have a car. I'm not buying a car to 'save myself thousands' as you put it. I'm well aware of how much a car costs thanks.

The point they were making is that none of you actually own the cars you are paying for. In fact you are perfect customers to the finance companies. Buy a motor that depreciates quick as. They entice you in with a trade it in offer giving you way less than you owe and add the outstanding credit onto your new car, and so it goes on and you never actually 'own' a car.

With regards your credit refusal, is there any negatives on your record. The fact you have no other credit history is intself a negative but it's usually easier to get car finance than any other as in effect the loan is secured on the car to a certain extent.

Credit_Crunched_2

Ask the dealership for details of the credit agency they use to conduct their searches. They will have a standard script which they should read to you, and the agency and its contact number should be included.

I would say that there must be an issue somewhere along the line (Possibly an error on your credit report), as having worked in the motor industry for more years than I care to remember, even in these difficult times, it is very rare for a finance house/bank to decline unless you have missed/late payments on any other agreements, or if you do not fulfill the affordability criteria.

Its worth checking to see if any late payments etc are logged on your file.

Mara69

techcastoni wrote: »

I have an existing car finance agreement that is 2 years into its 3 year contract. Dealership has agreed to take the car back and clear the finance on this if I'm upgrading.

Is this the same as consolidating a loan - in other words although you're going to stop this agreement early it is still counted as debt?

techcastoni wrote: »

...I have several credit cards with decent credit limits.

techcastoni wrote: »

I have no debts other than the existing car finance which I could pay off.

So all the credit cards are at zero balance?

BoGoF

Ah, didn't spot the "several credit cards with decent limits".

Perhaps this is the problem. How much available debt do you have?

meer53

techcastoni wrote: »

I have an existing car finance agreement that is 2 years into its 3 year contract. Dealership has agreed to take the car back and clear the finance on this if I'm upgrading.

So they put me through the system and I get declined for no apparent reason. I'm an existing customer of the same finance company, I'm earning more than I was when I got the first agreement and I'm putting down a deposit. Never missed any payments, don't have any other loans and I have several credit cards with decent credit limits.

I thought maybe for whatever reason my credit rating was poor so I signed up for Experian only for them to tell me that my score is 997 out of 999!

I've carefully calculated a budget for the car and I know I can make the payments quite comfortably. Plus I've also got the chunk of money I was saving for the final payment on the car I got on the first agreement.

In my mind, I'm a fiscally responsible customer with no history to suggest otherwise and yet money is being left on the table.

What really gets on my nerves is that I have friends and friends of friends who aren't earning as much as me, they don't keep up with payments and they do overspend yet they drive around in cars more expensive than the one I'm trying to get.

Can someone please tell me what I'm missing here?!

Since you took out the original finance, lenders have seriously tightened up their criteria. As you say you have several other credit cards with decent limits, this may be what has caused the decline. Even if they all have nil balances on.

You say you earn £30 - £40k, there's £10k difference, is it 30 or 40 ? My salary is a fixed amount, it's not a variable between 2 figures. If yours varies because of overtime etc, you will find that this won't be taken into account as it can't be guaranteed.

I wouldn't worry about how other people afford their cars, there will always be someone with a more expensive car than yours.

techcastoni

BoGoF wrote: »

The point they were making is that none of you actually own the cars you are paying for. In fact you are perfect customers to the finance companies. Buy a motor that depreciates quick as. They entice you in with a trade it in offer giving you way less than you owe and add the outstanding credit onto your new car, and so it goes on and you never actually 'own' a car.

With regards your credit refusal, is there any negatives on your record. The fact you have no other credit history is intself a negative but it's usually easier to get car finance than any other as in effect the loan is secured on the car to a certain extent.

No negatives on my record. Hold a couple of credit cards, always paid up in full when the bill comes. I've had a loan before of equivalent value to the car I am buying and paid that off in full too without any missed payments.