That's not surprising. Different companies (banks, car dealerships, mortgage brokers) use different methods of capturing a credit score. I usually send for my free annual credit report from the 3 main companies - and my score is a little different in each one.

I can check both of my credit card online and their score is different as well.

https://www.thebalance.com/the-credit-score-car-dealers-really-use-3974683

When we bought our last car, we both had good credit scores and so walked out of that dealership with a new car, our old car, and no money down AND a no interest payment! We had intended to pay cash for the car, but gosh, to pay for it monthly with no added money, that was a no brainer. To answer your question, I don't know. We buy cars so infrequently and usually pay cash. It's the haggling that I hate. They want to sell you their car at retail and buy your car at wholesale. Sigh.

I was told when I purchased my last new car, that "automotive credit scores" are different than "overall credit scores" because I hadn't had a car loan in 11 years. So I got punished for keeping my old vehicle in good working order for all those years? I think it's all a scam. Unfortunately, I'll also be looking for a new car soon.

The score you see on your credit card statement is not a true FICO score, it’s an educational tool and those are usually higher than your true FICO. If you go to Myfico.com you can get your actual FICO but keep in mind, there are 3 different credit agencies and therefore you may still see 3 different scores. You should probably Google and learn more about them so you have a better understanding of how they work because when it comes to car shopping the more you understand about the process, the less chance a salesman has to “play” you.

To answer your question regarding how a dealer will use the FICO, the FICO is used to determine the risk you present as a borrower and the rate lenders will offer you. If the salesman knows you are a higher risk, he will know your financial options are a lot more limited than someone with a higher score. The pricing he offers you will be slanted more to his favor because he knows you have less bargaining power. That’s why many sales people will prod a bit about your financial situation almost immediately.

The best way I’ve found to buy a car is to get your financing pre-approved by your lender before you ever step foot on a lot. That way you will already know your rate and the price range you can afford before you start shopping. When the salesman asks you what kind of payment you’re looking for, just tell him you already have your financing taken care of so it takes that part of it out of the equation entirely. And never ever disclose what you’re pre approved for. That will tell them a price range to stay in and you’ll most likely pay more for the car than you would have if they didn’t know. It’s his commission after all.

Like most people, I HATE to be followed around the lot by the sales person and will leave if they insist. Whenever we’re approached initially, I immediately tell them, we’re just looking but if you give me your card, we’ll come ask for you if we find something that interests us. And in recent years, I shop online and will call to arrange for a test drive before I ever step foot on the lot. I tell them I’ve just started looking and am not ready to buy at all. They will take a copy of my license when I get there and usually won’t bother to inquire further. I take my drive and either talk to them or leave but I’m the one in control of the situation. The minute you loose control, is when they will get as much information from you as possible and use that to their advantage.

Once the pricing is settled, if they can still offer you a better deal with their financing then go for it.

ETA: Shop as late in the month as possible. Dealerships always have monthly goals they are expected to meet or exceed, chances are, you will get a better deal if the month is almost over and they are pushing to increase that number.

Lastly, do your homework, always know what the price range of the vehicles your considering are and be willing to walk away if the dealer refuses to offer a price that is within that range. Trader.com or KBB.com (both owned by the same company) can provide all the information you’ll need.

I wouldn’t be organising the finance through the dealer but through my bank.

Ditto Colleenoz. Get your loan elsewhere. The dealership is a middleman.

I think Kool Beans summed things up quite nicely. The place you get your loan, a financial institute (bank or credit union) vs thru the car dealership’s own financing (which usually btw is their own branded financial services) can be comparable. Sometimes the dealership wins out. By a lot. Do your due diligence as with anything else financial.

Many times, if you are a repeat customer with good credit, that is taken into consideration in your favor. I even try to use the same sales person at the dealership I use.

The last two cars I bought, the "lender" tied to the car brand had special pricing promotions going that beat what I could find externally, by a fair margin. I don't think there's a rule of thumb that always applies, circumstances change all the time. If there's a promotion going on, what's offered through the brand may be best. Otherwise, maybe not.

For pricing, True Car is useful.

My husband doesn't have anything bad on his credit, but I think that Barbara nailed it...he has not financed a car since he bought a 2002 Saturn. Then, he has no loans/financing recently, at all...probably the reason for the lowered score. We don't even have a mortgage, about all he has for recent financing is a small dental loan that he just paid off...HA!

Thanks everyone for your input!

Always walk in with pre-approved financing or the ability to pay. Then let them make their financing offer. Also understand how auto loans work. The lowest interest rate is not necessarily the lowest gross output by the time you pay off the loan. There are a lot of calculators available online.

If your DH is with Capital One their auto loans are very competitive. We have bought two vehicles using them and they beat out the other options including our credit union.

This is one example of why having an active credit history is important. Under utilizing credit can hurt you as well as over utilization when it comes time for a major purchase. People are also shocked to find that when they pay off a vehicle or home their credit score temporarily drops. They stop buying on credit with the erroneous idea it will grow their score. But in reality using credit wisely is what is needed.

"The lowest interest rate is not necessarily the lowest gross output by the time you pay off the loan."

Huh? A payment calc is a payment calc. For a given amount financed and a given term of months or years, the lowest interest rate will produce the lowest payments, monthly and in total.

#1 Your credit card company is not an official expert on your credit score.

#2 NEVER finance a car through a dealership.

#3 Walk away they were screwing with you.

We never in the past financed an auto loan through the dealership. Our last car we did. For one month. If we financed through the dealership because we got a $1000 incentive off the price of the car. When the first payment came due we paid the whole thing off with our line of credit. I find credit scores screwy. We had excellent credit score and when we went for the car they said it was lower. We didn't do anything different that we knew of. Here when we had the higher credit score we were still paying on our son's student loans. Then since we payed them off and owe nobody nothing that makes the credit score lower. Go figure.

Elmer - For you a payment calculation is most likely based on all factors considered. But a lot of people only see low interest rates, not calculating factors like pre-payment penalties, how extra payments are allocated or sometimes even the length of the loan. Then there are the people that buy based on the lowest payments as opposed to the best deal. A cash incentive can be a better deal for some people than a zero interest rate. Nothing in auto financing is really free.

Darcy, re: #2 - If a dealer is offering 0% financing, or some other % that is less than the interest one can earn on your money by leaving it in the bank, it would be a bad financial decision to not take it. Never say never.

I don't buy a new car very often, but have twice financed through the dealer because there was no or very low interest, so I was able to leave $50k + in the bank earning interest instead of using it to buy a car. That adds up to several thousand dollars in my pocket.

I never walk into a dealership to buy a car. That's what we used to do before the Internet.

When I bought my Mazda, I went to the Mazda website and "built" the car I wanted. I selected the color, trim, engine, if I wanted a back-up camera or not, etc. I picked all of the features I wanted.

Then I entered my zip code and selected a distance, like how far from that zip code was I willing to go. I selected 25 miles. I clicked "submit" and then sat back and waited for offers to come to my email.

The requirements I selected, i.e. the things I wanted, were then sent out to all of the Mazda dealers in that 25 mile radius. Within 40 minutes I'd received six emails with bids. All of them were within $600 of each other except one. That one was $2,000 more than the others. I just deleted that one because that dealer was trying to rip me off.

Of the others, I selected the dealer closest to my home. It didn't really matter because five dealers all had what I wanted at essentially the same price. I went out and the car was sitting there waiting for me. Went for a test drive, then came back and did the paperwork.

There was no haggling or feeling like I was being taken advantage of. Five other dealers quoted the same price for the same car with the same features.

Overall that car buying experience took about 3 hours. That includes going to the Mazda website and building the car I wanted and then waiting for the bids to come in. I think I only spent an hour at the dealership.

It saves the driving from dealership to dealership, and reduces the risk of being ripped off. I already had my financing lined up through my credit union. You can use this method for any type of new vehicle. No need to spend hours with a salesman getting frustrated.

watchme-

-It's rare for a car loan to have a prepayment penalty

-paying more than is due in a given month MUST be applied to principal. That's by law

-The length of the loan is a loan term, just like the interest rate. Term, amount and rate determine the payment, no other variables.

-Lowest monthly payment - lease the car and turn it in in 3-5 years and start again

-Lowest payment for a purchase - lengthen the repayment period. That does cost more in total, of course.

For my last three cars, two with the "brand" loan and one not, the loan was discussed after the price for the car was determined. They weren't discussed together. The brand loans each time were more than a full percentage point lower than I could find from a bank or credit union, including USAA. For one, it was more than two percentage points lower (1% compared to something like 3.5)

As before, there are no rules. See what you find when it's time to go shopping.

Arcy, never say never, especially re the financing, as pointed out in earlier conversations above.

Elmer, my experience with ‘brand loans’ has been almost identical to yours. My last two cars have been much, much lower than my credit union or bank, and the recent one was well over 2% better. And the process was easier and faster.

I tend to believe that nothing in life is free, including interest. You’re going to either pay for it upfront or through payments. So...the rates for the brand loans might be great, but how do you know you are getting the best price available for that car? Most people don’t realise that they are paying a couple grand more than they probably would have if zero percent financing was not being offered by the dealership. Since most people won’t turn that down, they automatically cushion that cost into their pricing.

"I tend to believe that nothing in life is free, including interest. You’re going to either pay for it upfront or through payments. So...the rates for the brand loans might be great, but how do you know you are getting the best price available for that car? "

Maybe it's different in your area, but the financing for my purchases was discussed with the person from the "Finance Department" AFTER the price negotiations with the salesman and whoever is playing bad cop as the "Sales Manager" had finished. And the sales people weren't involved nor even nearby. With one car, the sales guy said "I don't know what you're going to do for financing but talk to our Finance Manager, they have cheap money right now". That was the one that was 2 percentage points lower than I had found.

How do you know you got a good price? I start with TrueCar, go into the dealership, ask for their best price assuming a cash purchase and tell them I'm going to contact two others. I call the two others, give them the specs and ask them for their best price to compare to another deal. If they come out over, I tell them, they typically will ask, and either drop their price or say "take the deal you have". Again, no discussion of financing with them either. All done in a phone call.

It's pretty quick, pretty painless, and in a couple of cases, I got better prices (on expensive cars) than a couple of friends got for the same cars. But more importantly - win/win negotiating teaches you don't need to get the best possible price, the goal is to get a very good price that's acceptable so that the seller also gets an acceptable price and both sides can walk away satisfied. It's not a 'take no prisoners" undertaking by any means.

Oh Elmer, you waste time with your method. Going into the dealer and then calling two more dealers and repeating again what you're looking for?

Just do all that on-line. No negotiating, no haggling, no repeating the same information to two other people. How I'm going to finance it doesn't even come into question. When I click the submit button and my request is sent to six dealers, I'm being quoted the price of the car. Not what the cost is if I use my current car for a trade-in. I know I'm getting a fair price when five out of six bids are all within $600 of each other.

sephia, everyone has their own method. I tried it in a similar way as yours and got substantially better deals with TrueCar and live phone calls as I've described. Substantially. True Car prices are pretty good all the same.

Your busy and affluent area as mine, dealers get hammered with inquiries that don't materialize so they put minimal effort into them. When they have a live person on the phone (or in front of them), they get serious, in my experience.

The most expensive car I bought in the batch I mentioned is a mid-level model of one of the two luxury German brands. Having gotten a TrueCar price and spoken with Dealer A, I called Dealer B and said I was calibrating a TrueCar price for another place. The response was "I can always beat TrueCar, you don't need to tell me what you were quoted and I'll beat it on my first try". He did and was also cheaper than Dealer C, and I bought it from B. Total time spent "calibrating" - less than 30 minutes. It was a factory order that took a bit more than 8 weeks before delivery, so what was in inventory and how equipped was not an issue.

Once we almost took a dealership loan because the interest rate was so low, but the costs to initiate the loan were ridiculous. A seller has to make money somewhere. (Although I have been surprised to find how little profit is 'enough', and how much the emphasis is on volume. Seems to come down to how little commission an individual salesman will accept.)

We've never need to drive our cars hard or far, and we no longer care about having the latest 'whatever'. We've mostly bought certified last year's model vehicles outright and kept them for 10 years.

Twenty years ago I followed sephia's path, but without limiting the distance I'd go for my wish-list Jaguar. It cost a tiny percentage of the savings on the car to Greyhound a driver to deliver it. (Our local dealer had a hissyfit about losing the sale and refused to service it -- until Jaguar told him differently. The warranty money was just as green, after all!)

I was recently in a crash. Was talking to a sales guy where I figured I'd buy my replacement if my vehicle was salvaged. Up front, we were laughing about how in this day and age there is no more need to haggle. No pressure. We just hung out and checked out the features of the latest models. Anyone who takes the time has the resources to know what they should be paying before they set foot on the lot. It's all about selling customer service these days. And financing of course. We also talked about how there is little competition anymore. Too many dealerships saturating some areas and not enough buyers. Young people aren't buying cars like they used to. My daughter told me that some of her her friends with teens are begging them to get their drivers's licenses. They just aren't interested like previous generations.

Our last vehicle we bought directly from the area's fleet manager. We wanted a specific model but local dealerships said wasn't available. He found one out of the area for us, not in the local dealers trade zone and made a trade happen for it. No commissions, searched out the best rebates for us and threw in some extras. We not only got our price we walked in but better and we used our own financing.

I build my car before I shop. I go in knowing exactly what I want and what I don't. Any negotiation is sometimes replacing an extra widget (cargo net, wheel locks etc.) I don't want with something I do want.

I was told many years ago by the owner of multiple car dealerships, that one should always be vague about how one intends to pay for a car. When asked how one wants to finance it, just say "I haven't decided yet - might be cash, might be finance, might be a lease.

He said the most important thing to establish is the PRICE at which they will sell one the car!!!! Once the price is established, then one can explore various financing/leasing options or even paying cash. Often, the car company itself will offer very attractive deals both with purchasing a car and leasing one. It is rare that a bank/credit union etc can beat these rates.

This dealer of expensive European cars said that in his opinion, one should only pay cash if it's paid for out of an annual bonus - money one never actually had - no selling off of stocks etc. If that's not an option, he believed strongly in leasing. This is what I have done for the past 14 years and it has worked very well for me. I do think leasing is far better when it's an expensive European car as leases are based on the residual value at the end of the lease, and they hold their value far better than an American or other car does. Some Japanese brands also hold their value well.

European cars also typically come with a 4 year, 48,000 mile warranty, so unless one puts a ton of miles on a car per year, it is always under warranty. I like that!

Pre-buying scheduled maintenance can also be a good deal, especially on a European car where such is usually very costly. I save hundreds of dollars by doing that.

" I do think leasing is far better when it's an expensive European car as leases are based on the residual value at the end of the lease, and they hold their value far better than an American or other car does."

Residual value is negotiable in a car lease, as is the price. What determines the lease payment is the difference between the two, lease term and interest rate.

A lease payment calc is the same as a loan payment calc, with interest rate, term, and principal repayment as the determining factors. The only difference computationally is that a loan for a purchase amortizes the principal amount to zero, while a "loan" for a lease only amortizes the purchase amount to the residual value. They're otherwise the same.

Many lessors will take advantage of customers, many of whom don't know how leases work, and build in a very high interest rate. When leasing a car, the implicit interest rate should always be requested as a disclosure.

Those of you who have hijacked the thread to argue the finer points of buying/leasing and where to obtain financing should start another thread of your own.

Back to @arkansas girl and her original post -- yes, it is true that auto dealerships have "their own method of determining your credit score." But it's not unique to each dealership. That is, each dealership doesn't compute their own FICO score.

There are three credit reporting agencies - Experian, Equifax, and TransUnion. There are many different FICO scores: 2, 3, 4, 5, 8, and 9. FICO score 8 is the most popular and widely used, and 9 is the newest (about two years old). When you apply for a mortgage, FICO scores 2, 4, and 5 are used. Auto lenders primarily use variations of FICO scores 2, 4, 5, and 8. When applying for a credit card, FICO scores 2, 3, 4, 5, and 8 come into play. So, knowing what any one of your FICO scores is isn't necessarily going to help you if your lender is using a different FICO score. You need to know which credit reporting agency they use, and, which FICO score they use.

Specifically for auto loans -- All three agencies use FICO score 8 for auto loans, as well as the following: Experian also uses FICO score 2; Equifax also uses FICO score 5, and TransUnion also uses FICO score 4. So, if you know your Equifax FICO score 5 but your auto dealer uses TransUnion FICO score 4, it could be very different.

If you want to find out what your FICO score is on each of the numbered scores, go to MyFICO.com.

Do you express such opinions about the directions conversations may take when you're at social gatherings in person?

I think that there is a lot of valuable car buying information that has been shared in this thread! Anyone google searching may find this thread and find information about buying a car! I think the name of the thread should be changed...HAHAHA! Some of the information is too late for us at this point. Mostly, I was just wondering about them telling us we had a lower score than what we thought we had. I know that car dealerships have a lot of tricks up their sleeves to get more money out of us!

The dealership says his credit score is lower than he thinks and then therefore his price thru the dealership’s bank is higher?

Well, color me surprised!! Not.