Auto loan q's.

Re: Auto loan q's//lkng for advice

Finally, a question I may be able to provide insight on.

I bought my first car about 3 years ago. Knew my credit was bad, but didn't know how bad. Turns out, horrible was an understatement. Long story short, screwed to the wall.


If you can wait it out w/ your current vehicle, do it.
(repairs are less expensive than a down payment and monthly payments for the short term)

If you can buy something inexpensive for a year, do it.


Depending on what your credit looks like, get it cleaned up ASAP. At the very least, try to get to around 600 or so.

Do NOT go w/ sub-prime lenders as the interest is ridiculous (I've heard of 21%). If your credit gets a little better and it's at all possible, try to go to a credit union. They're a little more personable. Also, make sure whatever you do you can afford the car.

(there are several calculators on the WWW to aid with this)



If I had it all to do over again, I'd have stuck w/ my old car until I had a grasp on my credit. Please, think it through and make a wise decision.


DB

 

Re: Auto loan q's//lkng for advice

I'd have to agree with DaveyBoy 100%. I've heard that Roadloans.com was pretty good, although they're somewhat affiliated with PeopleFirst. My wife and I bought our truck through them at 9.9%. That's with sub-700 scores for both of us. If you can wait it out, do so. I sorta wish we had because now this payment is affecting our DTI ratio.

Smitty
Always look out for #1. Avoid stepping in #2 along the way.

 

Re: Auto loan q's//lkng for advice

I have never heard of rategenuis.c om until recently. Check it out and see. On second thought, I'll make a seperate post asking if anyone is familiar with them.

http://www.rategenius.com/

 

Re: Auto loan q's//lkng for advice

Some new car dealers take recourse on loans on their 1 or 2 year old cars,allowing you to get a standard rate.

 

Re: Auto loan q's//lkng for advice

My scores were 680,640,590.

Chase-manhattan approved me (pulling only TU=590) for 7% with $3500 down for a total loan value of about $30K (after tax tag interest,etc).

I think if you have a serious down payment, and job,residence, you can demand a decent rate even with some major derogs on file if they are old.

Things that count: Previous car loan paid off, job stability, residence stability, cash down payment.

Don't get bullied into a high rate, you'll be upside down forever on that car.

Btw I was approved for same payment ($500/month) for lease too. Lease requirements no different than ownership. I just couldn't do the lease thing.

 

Re: Auto loan q's//lkng for advice

I agree w/ DAVE!!!!!!!

I am upside down on my truck, because I was DESPERATE to have a nice truck (USED, now 100,000 miles, and still owe $8,000 more than it's worth!) my credit was horrible (it's still not good, but it was worse!) The best advice I have gotten (now, wish i knew before) was...

1) Use your down pmnt to get a pick up, or something that you can drive around for the next 6 mos to a year (and own) until you clean up your credit for a prime loan.

2) Secure a loan, preferably w/ a credit union...theyy typically offer the best rates

3)BUY USED...you'll save A LOT of money vs brand spankin NEW

4) go to www.carsdirect.com, and you can secure the best rates...then shop for your car, and finally....

NEVER EVER GO TO THE DEALERSHIP!!!!! Only if you are test driving....when you get the price you're happy with, fax your offer to the dealership, or do it by phone, and seal the deal before you even walk through their door!!!! THEY ARE SHARKS!!!! THEY will pull every trick out their sleeve to take your money! TRUST ME!!! Had I been wiser about credit 2 years ago, I would've taken all these steps and saved THOUSANDS of dollars in interest!!!

Good luck, and BE PATIENT! REMEMBER good things come to those who wait!

 

Re: Auto loan q's//lkng for advice

Trust me, car salesman all the way up to GSM and the finance mgr. are all sharks and pond scum. My ex worked in this business and to hear the guys brag about how they made X amount off a deal and how stupid the buyer was not realizing they had been taken was sickening. To hear them laugh about how they even made money off a family member was even worse. When I hear someone tell me that they got a good deal because the dealership gave them alot for their trade-in, they don't know that somewhere down the line of numbers they were screwed.

Patience is a virtue and I have found that being patient works to your advantage many times.

 

Re: Auto loan q's//lkng for advice

My advice is that when you're ready to actually buy the car, apply for financing on-line or through a credit union or your bank or wherever, so that you have some sort of financing before you go to buy the car. You might be pleasantly suprised by the rate that you get. I just got a $17 car loan at 8.9% and my credit stinks (at least according to the CRAs!!). If the dealer can beat the rate that you get, great!

If you don't know what kind of vehicle you are going to buy, start researching for your vehicle now. This will give you plenty of time to decide what you want and you can avoid an I-have-to-have-THIS-car-right now situation.

If you can, I recommend buying a 1-2 year old, low mileage car - someone else absorbed a good piece of the depreciation.

Try not to let the salesperson know how interested you are in the vehicle (this can be very hard to do!).

New car sales have been going at a phenomenal rate despite the "recession." This means that there have been alot of trade-ins. In other words, there are plenty of cars out there that dealers need to get rid of, so shop around and play one dealer off of another.

Got all that? Good luck!!!

 

Re: Auto loan q's//lkng for advice

Anyone will tell you, they are not out to give you the best deal! They want their commission, and they want to KEEP THEIR JOBS!!! The best way to get your best rate is going online...print it out, and carry that with you (if you must physically walk into the dealership to negotiate) You need the Ammo!!! If your credit is weak, they will definitely string you along and say, "well, this is the best I can do, you know, it's hard to get you financed!!!!.....I'm glad you're choosing to get financed ahead of time, that is the best choice.

Have you also considered buying directly from owner??? There are so many cars out there! People went crazy during the dot "bomb" period, and bought all kinds of cars they could not afford, and now are desperate to unload...just a thought!

 

Re: Auto loan q's//lkng for advice

Matt_r,

Even with good credit, you might have very little room to negotiate with only $2K down, and financing $15-$17K. The $2K represents only 10-11% of the purchase price ($17K-$19K). You didn't say if you have additional $$ to cover tax, tags & license plates.

Your local bank (not affiliated w/ the giant ones) or credit union may give you a better deal with 20% down. Dealer financing is the last place to apply unless you have great credit.

With the current glut of used cars, you can probably find something more than adequate for $10K-$12K. Your % down will look better, and you'd have a greater ability to walk away from a shoddy deal.

 

Re: Auto loan q's//lkng for advice

The only people who dislike car salespersons are people who were too ignorant the last time they went to the car dealership and bought a car.

If you understand the basic principal of dealer cost, invoice, MSRP, a simple interest loan, the resale value, the trade-in value and a few other basic issues, you can't get screwed. If you LET someone screw you, then that's your own fault. At any point in the deal you, as the customer, have the opportunity to just walk away. Deal looks bad? Walk away.

I just bought a 2002 Dodge Ram 4x4 Quad Cab. Did I get screwed? Absolutely not. Did I go into the dealership to buy it. Absolutely. Did I let them arrange financing? You bet -- but I knew what the rates were and what they should be.

You're only a fool if you LET them make a fool out of you.

 

Re: Auto loan q's//lkng for advice

You say you are saving for a down payment, does the vehicle you are considering have any rebates, which can also be used as a down. I know there is quite a few offering rebates. Currently I am considering buying a car and the rebate offers equal 3500, which is a good down for the price of the car. No out of pocket as far as that is concerned for me. Good Luck!!

 

Re: Auto loan q's//lkng for advice

The reason you go to the dealers for financing, is because they can stack your crappy credit application along with a bunch of good ones. Stacking is common practice.

Here's 10 people with good credit, and 1 with bad (at a decent APR). Take it or leave it.

The finance companies will take 1 bad risk person to get 10 good risk people.

If you know how to work it, using a dealership can be beneficial because borrowing money in groups is less risk than one-to-one kapish?

 

Re: Auto loan q's//lkng for advice

First of all, it's not the salespeople...it's their policies, and YES especially WOMEN such as myself who walked in unprepared (which I would tend to say is more than 70%) Do get SCREWED!

And what the hell is wrong with what i suggested? My whole point is with technology, you can now avoid the drama, and the long hours sitting at their desk, at their mercy, as they shuffle back and forth to their manager's office playing "let's make a deal"...

Furthermore, this is highly likely the situation you will encounter if your credit scores are low, sir, such as Matt has suggested...

So please, look out for the best interest of the person asking the question.....

 

Re: Auto loan q's//lkng for advice

Wells Fargo Auto Finance has an Extended Reach Program meant for people with less-than-perfect credit. They also post their rates for Average, Fair, and Marginal credit.

Also, Wells Fargo Financial (formerly Norwest Financial) caters to "[People who are] thinking about buying a car, but may not qualify for a bank loan."

Hope that helps...

wajaba