For someone with no credit? My mother has cleaned up her credit report and has no derogatory items on it. She is retired and gets a pension. She has bought two cars over the past ten years, but she bought them from a buy here pay here place and so they never went on her credit report. So she has nothing on the report. Right now her car is on its last leg (from another buy here pay here place) and she has spent close to 1k on keeping it runnable. The engine busted and she had someone to weld it so it could blow at any time- she has had a new water pump, resivoir, radiator, tie rods etc... you name it, it has costed money and I want her to dump it before the engine really dies. It has over 126k miles on it. She does have two hard pulls on her credit now. She went car shopping and they pulled her credit and she was denied the first time. I am trying to find out why. The second time the company (a supposed no haggle place) had her sign the application and they filled it out (without her seeing it) and she was denied based on income. I think she really got taken advantage of with this second company because they told her that they would send it to a credit union and they sent it to capital one and then they lied and told her that everything was dependant on what their answer was as to her payments and the final car price. I am upset and trying to help her as best as I can. Basically she wants an 06 model or earlier, with moderate miles, maybe 50k more or less, and she wants to spend around 7-8k. She is willing to trade the car she has (valued at 2-3k) and may be able to make a modest downpayment of 500-700 dollars in a few months. She wants a payment under 200.00 a month. A good payment for her would be around 160.00 more or less. I mean she was paying 200 something at the buy here pay here places. But is seems that the local dealers are really gouging and up to their old tricks and I feel like ripping my hair out. She called one Ford place and they told her they had some Fords for 6-7k and then she called to see if they had come in yet and one guy told her they cost 10k. When she told the guy that another worker told her they were 6k he hung up in her face! Any advice tips etc would be helpful. Are the two pulls going to go really bad against her? And are they any companies that can help her out? Is what she is trying to do realistic? Any help appreciated.
Why keep going to the dealer and expecting them to give you the best deal? They're going to do what gives them the most money. You mentioned a credit union. Car dealerships will seldom finance with a CU, regardless of what they say. That's because the CU won't pay them a commission for financing a car. If she belongs to a credit union (or can join one), go into the credit union and talk to them (your mother will need to do this, but perhaps you can go along). Explain what is going on and see if they'll give her a loan. If so, go to the dealer and negotiate your best deal. Tell them you do NOT need financing. When you get a price, tell them you'll be back with the check. Then take the paperwork to the credit union and get the check. Some credit unions will give you a letter saying you're approved up to a certain amount that you can give to the dealer.
1st: shop for financing. Go to banks, credit unions, etc. (not necessarily in that order) and see who will give you the best deal. It might take a while, but it sounds like your mom has more time than money. 2nd: find a reliable and reputable mechanic or mechanically inclined friend (Hint: they don't work at Sears, Les Schwab, or Goodyear) and find out what they charge to do a used-car pre-purchase inspection. It should cost anywhere from $50 to $100. 3rd: Shop private party sales. They'll be more likely to cut you a better deal than a car-dealer. Find a couple that look like they'll work for you (yes, this can take some time, but remember what you have more of to work with) find one or two that you like and take them to the mechanic in #2. 4th: If the Mechanic gives you a thumbs-up, then take the necessary information to #1 and get a check to pay the seller in #3. Another option, depending on how much money you have to work with, is to go through a purchasing agent (I forget what they are called), but for a fixed price ($300-500) they do all the legwork to find you the best deal and do steps 2 & 3 for you. You still have to arrange all the financing. But, get the hint. Going back to a dealer is just going to be more of the same.
Thank you Hedwig and CCBob, I get the hint. Don't go to the dealership for financing. There are several banks and credit unions in her area. I think there are three that she may qualify for membership. A few questions: when you say shop around for loans- would she apply for each one or is there a way she can get a quote without pulling her credit again? Pre-approval? I am just concerned about racking up dings or would this be ok? Thanks for the tips on the private sale CCBob and the broker. I think maybe a private party may be the way to go.
Usually if there are several pulls in a short period of time for auto loans they count as one inquiry. You can ask about rates and so forth, but to get an approval they're going to pull her credit. Some places may let you bring in a copy of a credit report and they can give you an idea without pulling.
