OK I am seeking to buy a fair condition vintage VW. I'm looking to pay $5000-10,000 for it and I really would like to get one by sometime this summer. There are not many of these left and the longer I wait/procrastinate, the less likely I will be to find one that I want and in my price range. I have been thinking about possibly taking out a used car loan so that I can get the VW I want before it gets sold to someone else, and then I can pay off the loan early(a few months from now).
But here's the deal:
a) I just got a new car 6months ago with a loan for $26,000(I put $6,000 down), and although I pay more than the minimum payment EVERY month(we're talking $1500/month for a car loan with a $490/month payment!!), it is my first car loan so I'm not sure if that'd hurt my chances of getting a second(but significantly smaller) car loan. I do make enough money, about $1500/week, but I am self-employed so I do not readily have paystubs.
b) My credit is mediocre at best. I generally pay all my bills on time, for over a year now they'd ALWAYS been paid on time and IN FULL(I never pay interest on credit cards, always pay more than min payments each month on my loans). However, in January 2005 I was unemployed so I had 4 30day lates go on my credit report and a charge-off with Amex that really wasn't a chargeoff so I'm disputing that inaccuracy now. In 2002, some a$$hole didn't pay his share of the rent and that resulted in a judgment against us, but I paid that in full only months after the judgment was rendered(later I sued the 2$$hole for his share of the rent money that I had to pay for him, and put the lawsuit money towards my new car!!). Overall I'd say my credit score is in the low 600s.
Is there any chance that anyone would give me a second loan? Esp if it's of a much smaller value? I'm thinking that maybe I'd only get a loan for $5,000 and pay for the rest of the cost in cash out of pocket. My credit union says they require an Experian FICO score of 600 or better to get a loan, but is there a chance that they might use their "own" credit scoring system(as car dealers do) and say my score is lower than my FICO? Or could they say that I have the required credit score, but the paid judgment or new car loan hurts my chances of getting the loan? Also, are there any lenders that give out loans easily iwth barely any credit requirements?(i.e., subprime lenders) NOTE: I'd be paying off this small car loan within 6 months, so interest rate isn't really much of an issue. Thanks for all your help!
To the question can you get a second car loan. The answer is YES! Generally speaking, if your credit marginal or bad. It's one car loan per person. So in order to get the second car loan. You would need a wife or girlfriend on the paper but since your second car loan is really only just a hobby type of specialty vehicle and not another $20,000 car loan. I can tell you emphatically that in the State of Oregon I could hang a second car loan for you in seconds.
Thanks for the info. OK I calculated all the expenses, how much work I'd have to do to earn this money, and I might not need to borrow any money at all, or I might need to borrow only a few hundred. I went to my credit union the other day, and they said that they do not give car loans for vehicles older than 7yrs, so I'd have to get a personal loan for it instead...which is bad, because the criteria for getting a personal loan is higher(Experian FICO score of 620, as opposed to 600 for a car loan), and they require paystubs or at least 2yrs worth of tax returns, but I do NOT have paystubs and I do not want to show them my 2004 tax return because back then I didn't make $hit for income even though I had a big turnaround in 2005 and 2006. And I thought credit unions were supposed to make obtaining credit easier not harder than banks??
The only money that I'd need a loan for, wouldn't be the price of the vehicle itself, but simply just the $600 needed for a trailer company to ship the classic car from Georgia to Pennsylvania. If I have a good sales week, I might not need to borrow the $600, otherwise I might need to. I'm wondering if the company requires payment up front, or if they can work on a payment plan? Cause even 2 days longer would be enough time.
That's why I said you shouldn't be paying all that extra on your car loan. Pay the payments, put the rest in the bank. Then when something like this comes up, you have the money. And if you fall on hard times you'll have the money saved to make payments. In most cases paying more doesn't mean you're paid ahead, you still need to make your payments each month.
So, going forward, my recommendation is only the payment due on the car, put the rest that you would pay into a good money market account so you have it when needed.
As far as the credit union goes, yes, they are there to help members, but they have a duty to protect the member's money as well. You don't know, maybe the fact that you can show the big increase will help you. It would also explain if you had credit problems then and now you don't. You shouldn't assume that just because the 2004 tax return shows a low income that they will turn you down. Especially if you can show that you're still making as much as you did last year.