Background:

I bought a 2005 Mitsubishi Lancer in Dec. 04, two years after a voluntary repo. Terms were: 100% financing through Mitsubishi Motors, at about 16% for 72 months.

Fast forward to today. I am 2 1/2 years post voluntary repo, and I paid off my Mitsubishi in July 05. I know I didn't keep the loan long, but it was paid on time between Dec 04. and July 05. I did a cash out refi with my mortgage, and couln't afford both the car payment and mortgage payment, thus the payoff.

The last couple of days I've been looking at used cars. My dw just got a new job, and needs the second car to get back and forth to work. Trouble is, no one will finance us! I've been turned down by 14 banks already. What's up with that? I thought it would be difficult, but certainly not impossible!

My auto beacon score is in the 620's..my dw's is in the 660's. I have two jobs, one provable with paystubs, but the other is self-employment income (1099's). I've been told that they will not consider my self-employment income unless my tax returns show that I am claiming the gross amount. Of course that's not possible, since I have business expenses. What concerns me is that back in Dec. 04 when I purchased my Mitsubishi, Mitsubishi Motors accepted my self-employment income.

Have the rules changed? My dw cannot even go to work now without her own car. I am seriously considering a HELOC just to get her a car. There's no where else to get the money from.

Anyone else having trouble out there getting financing on a used car with self-employment income and past repo?

The 14 declines are from your resources or via a dealer's resources?

Kind of a long story (a dealer didn't have pp to shop my credit and did it behind my back...I am getting a letter from their credit department to send to the CRA's who won't delete the inq. w/o it - EQ deleted 8 of them over the phone) But anyway, this dealer submitted to 13 banks, although not even sure what they submitted for income.

Went to a different dealer, found the car I wanted, but since dealers pretty much have the same resources, they could only submit to one more bank that wasn't utilized yet. They did try to call two promising banks that already had our SS#'s on file, but they refused to accept additional income information because the previous auto dealer told them my income wasn't verifiable.

The new dealer says that because of what the first dealer did, none of the banks will talk with them.

Lenders cannot show favoritism towards one dealer to another, as it is a discriminatory practice.

Unless the second dealer can show substantial difference in the deal structure, they will also get a decline on your behalf from the same lenders used by dealer #1.

Approvals or declines are valid for a 30 day period.

I wasn't trying to turn anyone's decision around, nor was the second dealer. The second dealer just said they were screwed now for submitting correct or updated information because of the first dealer's submissions. It just sucks because I specifically told that first dealer NOT to shop my credit, and they admitted they did it without pp.

But the second dealer told me that my self-employment income won't be factored into my debt ratios, when it has in the past. That's why I wondered if lending laws or rules have changed since I purchased my last vehicle. They are also saying now that sub-prime auto lenders don't want to touch borrowers with a past repo, no matter how long ago it was, or whether you had good credit before and after. Is that true too?

Thanks for your replies, by the way.

lol. Well, that's what I thought too. I'm going to my regular bank tomorrow, since I know the managers well there, and see what happens. There's a credit union close by that's also a possibility. I'm just going to try and get an approval away from the dealerships. Either they don't know what they're doing, or just not willing to fight hard enough for an approval.

There's a 2002 Chevy Impala with my name on it! (my DW can have our current car, lol.)

would recommend you check out the CU!

I usually do very well with them for a consumer.

Well, that didn't work either. They use EXP (figures), and my score came up at 640, DW at 694. DW doesn't have income (her job doesn't start for a few days yet), so they had to use my score. They wanted two years employment (I have over one year at one job, and three years at my 2nd job), so they declined my application. Other factors they said were high debt to income, and a bankruptcy score of 777. What the heck is a bankruptcy score, and why/how do they figure that into their decision? I guess paying your bills on time means nothing to them. Aside from the repo (that I was never late on), I've never been late on anything, ever.

So now I'm waiting on a HELOC answer from my main bank. Said they will know by Monday. My application is being manually reviewed.

It seems like you really need to go over all 3 of your credit reports because it just doesn't make sense why you keep getting denied besides the repo. IMO I think there is more to this. Are you putting a downpayment or is this 100% financing? Why not consider getting an older car under 8-10K? and financing the minimum?

No down payment is available until December, but my DW needs to get back and forth to work right now. You'de think there was some deep, dark secret in my CR's, but there really isn't. High debt ratio is my best guess at this point. I haven't even been approved at an outrageous interest rate (like 20-25%) to factor in "high risk".

In the beginning I was looking at getting a car for around $3K, until I realized you can't finance under $5K. But nothing is available within the used car limits for $5K. Lenders usually won't go older than 4 yrs. old. So the only reliable cars I can find around here that are between 1-4 yrs. old, are in the $10K range.

I'm not giving up yet though. Will get an answer on the HELOC on Monday, and if that doesn't work, I can get some cash out when I refinance my house again this month. Where there's a will, there's a way.