First Investors Review
First Investors is a lender specializing in new auto loans as well as auto loan refinancing for those with impaired or limited credit.
First Investors has helped half a million customers since its founding in 1988. But it’s also worth noting that the company has had some significant complaints in that time, including a $2.75 million fine in 2014 for knowingly reporting false information to credit bureaus, an action which the Consumer Financial Protection Bureau’s director said could have been distorting [consumers’] credit profiles for years. On the Better Business Bureau’s website, the company has a rating of just over one and a half stars.
- First Investors financing: At a glance
- How to apply for First Investors financing
- Pros and cons of financing through First Investors
- Who is First Investors best for?
First Investors financing: At a glance
First Investors offers both traditional auto loans and refinancing for your existing auto loan. For those with fair credit, or even a previous bankruptcy, a loan with First Investors could be a viable alternative to dealer financing or other lenders specializing in subprime lending. With an average FICO credit score of 588, borrowers with less-than-perfect credit could find an opportunity to get financing.
But it’s important to note you can’t directly initiate new car loans through First Investors, though it is possible to apply for refinancing, which we’ll talk about in detail later. Instead, you will need to go through one of its affiliated dealerships. First Investors finances vehicles that are up to eight years old with fewer than 95,000 miles.
Here are some aspects to consider including:
- New car loan APRs not readily available. First Investors shares refinance rates on its website but not rates that you may receive from a dealer. S&P Global reported a weighted average APR of 13.76% in 2018.
- Most loans are long-term. It’s also difficult to find detailed information on First Investors’ website about term lengths. About 90% of loans had terms between 61 and 72 months, according to S&P. While longer loan terms can be a way to lower your monthly payment, they could also put you at risk for negative equity and paying more in interest.
- No motorcycle or RV loans. First Investors only offers auto loans, no motorcycle or RV loans as of this writing. Auto loans for both new and used vehicles are available.
Shop around. Comparing rates is always going to be an important part of your loan shopping process, but it’s especially important when considering lenders who specialize in subprime lending. Sometimes, these rates can be high. While First Investors’ average APR, as reported by S&P Global, is competitive with other rates we’ve seen, its maximum could be much higher, up to 24.95%. See how these APRs compare with national averages for non-prime and subprime borrowers: Used car rates in the third quarter of 2018 ranged from 10.3% to 19%, while new car APRs ranged from 7.5% to 14.4%, according to Edmunds. Edmunds describes non-prime and subprime borrowers as those with credit scores 660 and below.
How to apply for First Investors financing
As we mentioned earlier, new car loans must be initiated through a dealership, but if you’re interested in refinancing an existing auto loan with First Investors, you’ll need to fill out an online form. Along with personal information, you’ll have to provide a Social Security number, residential information and employment information. You’ll also need information on the vehicle you’re refinancing.
Then, sit tight for 24 to 48 hours. By then, you should have an initial decision. If you’re approved and your documents and loan information are verified, those who are refinancing should have funding to their previous lender in seven to 10 days.
The fine print
- Rates: Interest rates to refinance an existing auto loan range between 7% and 24.95% as of February 29, 2019.
- Fees: First Investors does not charge an application fee. However, you may have to pay a title transfer fee (varies by state), notary fee, and up to a $25 loan origination fee.
- Loan amounts: Minimum balance required to refinance is $8,000 (higher in some states). First Investors caps loans at $40,000.
- Customer service: You do have several options for contacting First Investors with questions or concerns, with an available customer service number and an online contact form.
Pros and cons of financing through First Investors
With First Investors, you’ll want to carefully look at the fine print of your loan as well as compare rates with other lenders. Check the loan terms available to you, as this lender does tend to give long-term loans, which can be risky.
Highlights of First Investors auto loan financing
- Bad-credit friendly. This lender is positioned to help borrowers with lower credit scores and past credit issues. If that’s you, this lender could help get you approved.
- No application fees
Lowlights of First Investors auto financing
- Limited availability. First Investors loans are available in most, but not every, state — check here to see if they’re available in yours.
- This lender has a history. As we noted earlier, this company has been fined by the CFPB and there have been several complaints to the Better Business Bureau.
- High APRs. Beware of high APRs from lenders that specialize in subprime lending.
- Long loan terms. You might need to watch out for possibly long loan terms. Combined with a small down payment, long loan terms could leave you upside down on your auto loan, or owing more than your vehicle is worth due to depreciation.
Who is First Investors best for?
- Those with bad credit or past credit problems.
This lender works with those who may have had limited success with other lenders due to their credit histories. Those with good credit can likely find other lenders with lower interest rates and shorter terms.