For Well Qualified Customers Only

[Guest Zack]

I've begun noticing of late, a higher number of automobile commercials on teevee offering some pretty attractive deals/terms to us consumers, whether we're leasing or buying the car.

 

As always, the blurry, fine-print at the bottom of the screen which provides as a disclosure of terms and offer, passes by faster than one can consume it.

 

But one disclosure that is usually one of the first, and noticeable, yet undefined, is "For Well Qualified Customers Only"

 

I think it's a given that if you're going to lease or buy a car you'll need at least good credit.

 

But what I'm wondering is what exactly defines a 'well qualified customer' from another and does this term fluctuate from one vehicle manufacturer to another?

 

FICO scores can determine how much we will pay for a loan; but is there a specific score [Fico] one must have to be considered a well qualified customer to take advantage of the best deals and terms we're enticed by in these commercials?

 

I called a dealership up today just for the fun of it and asked them this very question. They indicated I would have to "come-on-down" before they could give me a specific answer.

 

Shouldn't there be a specific and consistent answer to this question before we go-on-down so we know ahead of time what we're possibly getting ourselves into? Or if we even qualify for the advertised terms to begin with?

 

Anyone more familiar with this than me?

[Luv2play]

This is a question you may want to put to your local Congressman. I seem to recall that when the consumer protection bill went through recently, the car manufacturers were given a big exemption. You know the routine, they're hurtin', we (the government) own them, so let's let them do what they have to to make $$$. I may be wrong in my assessment since I am Canadian and none of this affects me directly. Also I'm not in the market for a new car and time soon as I tend to keep mine for 10 or 15 years.

[Diverdan]

There is no one answer across the board. If you have a history of financing cars through GMAC, Ford Motor Credit, etc. chances are you will be able to get a very favorable interest rate. If you shop around and are not set on a particular make or model, there are still some 0% interest rates for 60 or 72 months available as well. If this is your first auto purchase, then you may get your best rates through your local bank or credit union. A good credit history is essential if you want a low interest rate. The use of the term "well qualified customer" gives the dealer a way out of having to give every one the same offer, either on the price or the interest rate. As with everything else, it is "buyer beware" and make sure you read the fine print. Most dealers will not quote you a rate on the phone or define what they mean, as they only want to deal with serious customers, hence they want to meet you and make a judgement before they invest a lot of time (money) with you.

DD

[Guest Zack]

The use of the term "well qualified customer" gives the dealer a way out of having to give every one the same offer, either on the price or the interest rate.

DD

 

So if you and I both have a FICO score of, say, 802, that doesn't necessarily mean that we both will qualify as a "well qualified customer" meaning that we'll both get the same financing and deal advertised?

 

I understand the credit history scenario and all those factors. But if we both equally measure up - shouldn't we both be viewed as a well qualified customer?

 

Negotiating the price of the car is one thing. You or I may be better equipped or skilled than another at that. But the financing is what they are advertising here. How they determine a well qualified customer should be as clear as the morning sun rising over the Pacific. Shouldn't it?

 

If not, how can we as consumers ever measure anything of value against it and for our best financial interest and investment?

[+ deej]

So if you and I both have a FICO score of, say, 802, that doesn't necessarily mean that we both will qualify as a "well qualified customer" meaning that we'll both get the same financing and deal advertised?

 

An equal FICO score does not mean an equal risk. (And, FWIW, if you have a score of 802 MAZEL TOV!)

 

Many factors make up your FICO score. You can have a buttload of cash, no debt, and be unemployed and have a high score. Someone employed who has less cash and a buttload of revolving debt can have the same score only because they are employed and have a history of making payments on time. As strange as it may seem, the guy with the job and a long history of making payments on time is considered a better risk than the guy with the money, and he'll get the better offer.

 

The phrase "well qualified customer" is weasel words so they can decide who gets what, plain and simple. The dealer probably can't tell you what the actual criteria are because they don't know. The computer makes that decision, using programs written by a 13-year old nerd named Howie working in his mother's garage in New Jersey. Howie also runs the internet.

[Guest FTLdude]

The use of the term "well qualified customer" gives the dealer a way out of having to give every one the same offer, either on the price or the interest rate.

DD

 

^If there's a short answer to the question, this is it. ^

 

Of course the dealer won't give you a straight answer over the phone. They want you to come in so they can feel you out and 'sell you'. The dealers (like the credit card companies) can define the term anyway they please. If you have sterling credit, are a professional with stable employment history, and earn pretty good money they know you can apply for financing anywhere with more than likely approval at a very good interest rate. To them, this is the typical definition of the "well qualified customer". Its easy for you to get financing so they will put on their biggest smiles and try to talk you into buying either a more expensive car than you had in mind or the car you had in mind with a whole bunch of expensive options.

 

It isn't at all true that you need to have good credit to lease or buy a car. However, the person with anything less than perfect credit who really needs a car and has to rely on dealer financing will not fare that well. These are the people who fall outside the "well qualified customer" category and they are the ones that the dealers always try to screw with higher prices and interest rates. Of course, the worse your credit is and the more desperate they think you are to get the car the more they'll try to screw you. No matter how bad your credit is, they can find someone who will finance you. Naturally, the interest rate can get ridiculously high and a portion of it finds its way back to the dealer.

 

But even for the so-called well qualified customer, I don't think they go only by a specific FICO score. If you apply to a bank or a credit union the underwriters will also look at your credit utiilization and debt to income ratio before they make a decision. And if you do a quick decision online application, the computers run their own algorithms that analyze the same data to calculate risk. So you can never have been late on a payment, have a bunch of active credit accounts in good standing, and have a decent credit score and still not be a 'well qualified customer' if the lender feels that your credit utilization or debt to income ratio is too high. And you can have a slightly lower credit score with better utilization and debt to income ratio and get approval.

[NYTomcat]

Called my friend who runs a local Audi VW finance office. He confirmed industry standard right now well qualified customer at least 720 fico. Could be as low as 680. Used to be 620 lol

 

Also residency restriction. Lived in same geographic area for at least 18-24 months. And have no auto related lates. That's it

[Guest Zack]

Called my friend who runs a local Audi VW finance office. He confirmed industry standard right now well qualified customer at least 720 fico. Could be as low as 680. Used to be 620 lol

 

Also residency restriction. Lived in same geographic area for at least 18-24 months. And have no auto related lates. That's it

 

I guess "sign and drive" is well and alive on the East Coast. That was actually one of the commercials I was initially referring to.

 

"680" for a VW eh? Maybe I should move on up as apposed to coming on down.... Ahaha.

[JT Brooklyn]

There's a Commercial running now I think it is for Ford? The Woman says she just got LAID OFF BUT the Deal on the Car was to good to pass up?

 

Does this sound like a smart move you lost your INCOME and your making a Major Purchase! Unless I'm hearing this wrong?

[Mocha]

However, the person with anything less than perfect credit who really needs a car and has to rely on dealer financing will not fare that well. These are the people who fall outside the "well qualified customer" category and they are the ones that the dealers always try to screw with higher prices and interest rates.

 

Someone with less than perfect credit should not be going anywhere near a stealership. Nearly everytime I'd take mine in for an oil change they wanted me to buy a new car. Thats if I asked one of the sales guys where the service department was.

 

There are plenty of used (pre-owned to sound more ritzy) car lots that cater to those with less than perfect credit. Couple years ago I came close to buying what I believe was either a 98 or 99 BMW for $3,500 cash, but I know parts for the car tends to be pricey but went with an equally reliable one instead. Plus I didn't want to be riding Batman's weiner...

[Guest FTLdude]

There's a Commercial running now I think it is for Ford? The Woman says she just got LAID OFF BUT the Deal on the Car was to good to pass up?

 

Does this sound like a smart move you lost your INCOME and your making a Major Purchase! Unless I'm hearing this wrong?

 

You heard it right. I thought the same thing the first time I heard it. I think its one of the funniest in a long time.