Credit Scores and Vehicle Financing

lokki

Take a deep breath and a shuttle bus to the airport. If you want a nice ride to impress the chicks, you can rent something on the weekends.

Have you considered how long 72 months is? That's six years of payments on a car that's already two and a half years old now...and will be 8 years old when it no longer belongs to the bank. I'm guessing that you'll be almost 30 before it's paid for.

At payments of $472 a month, that's $34,000 in payments plus the $10,000 down - $44,000 dollars for a car that you're going to drive 65 miles a week...Not a very good investment, really.

Be careful about deluding yourself that not driving it much for the next six years will make it worth a lot six years from now. If the car has 28,000 miles on it, the milage is average now, and won't be really "low for its age" for about two more years. After it's 5 years old, the age of the car will be more important to its value than the low milage. You might get an additional $1,000 on a trade because of it - if you're lucky.

So... I think you're nuts (IMHO). You can rent an awful lot of nice cars for $44,000. If you really don't like the shuttle, you can buy a nice used Civic for $6,000, still have some cash in the bank and still rent nice cars for weekend cruising.

Finally - How much of a hit will the $600 a month put on your finances? (don't forget you'll need full coverage insurance). I lived the life of not being able to afford any entertainment except waxing my car when I was young. It's not as much fun as going to the movies....really.

For whatever it's worth.

jlawrence01

I do not think that it is wise to shell out that kind of $$$ for a car that will be parked in an airport lot. You WILL pick up more than your share of dings and dents.

ksccts

Well said!

isellhondas

Sage advise, brother!

cadillacmike

Did you also notice how the total payment on the 2 yr old vehicle with28,000 miles is actually $2,000 MORE than the price of the New one ??

But he has to have his expensive foerign suv so let him have at it.

lemko

Have you considered how long 72 months is? Well 72 months ago:

Bill Clinton was still President.
A kid that's about to go into first grade was just born.
911 just meant a Porsche.

In 72 months you could get an undergraduate degree and a Master's.
Back in the day, your Dad would've paid-off two cars purchased new.

$600 a month! Good God, I haven't paid that much for a new Cadillac!

rroyce10

...l..o..l..... Well done...!

Terry.

danf1

911 just meant a Porsche.

That is the best I've heard in a while. All too true.

cadillacmike

My wife's new Cadillac is costing her (me) a little bit more than $600.00 / month :P But then again, I only paid sales tax down (with no trade)

no smart remarks, terry

asachar

Thanks for the advice...I am actually a girl, not a guy!! Also, my company covers about half of the payment, sometimes a little more (depending on the mileage) The insurance comes to $1200 a year. which I already paid the first 6 months off. It won't take that much of hit on my finances - just less clothes to buy!! I am single..and loving it, I know I sound like I am justifying this..but I don't want to settle for something that I do not have my mind set on. As my parents say, i will learn from my mistakes!! Keep in mind that I was planning on leasing, but they declined me. Also, they will only finance me for $25000.

Thanks for the advice guys!!

rroyce10

... **Keep in mind that I was planning on leasing, but they declined me. Also, they will only finance me for $25000**..


They declined you because of little or no credit, and that's called: "no history" ...

They will only finance $25,0 because you were "conditioned" from the lenders because of little or no credit, but a huge amount of money down .. so the lender made you "buy" into the market to cover their loan and their risk and your rate is high because you came back as a "C" or "D" tier paper, not a good thing .......


**I know I sound like I am justifying this..** ...

Aaaaah, the famous rule of "21" ..... I will call 21 people until someone agree's with me, this way I know I'm doing the right thing ....



Terry.

asachar

I have an idea, why don't you co-sign me?? Just kidding!! Thanks for the advice Terry...

fish8

These forums are great for advise (good and bad)..just enjoy the car and don't be late on your payments and your credit will improve over the next several years.

rroyce10

......... I'm not even a co-pilot in my daughters cars ..l.o.l.....

Terry.

chevygirl

Don't do it, girl! Buy a used, low miles car for under 10 K to leave at the airport. In a few years, it will be paid off, you will have credit history, and then you can get what you want, and you will have the beater to leave at the airport! And put the downpayment in the money market or something. Wish I had that kind of coin in savings! Just my two cents, as a fellow credit establisher. If I can wait for my Wrangler, you can wait for that SUV.
Hugs,
Chevy Girl

anonymousposts

Why do you NEED a FX45? Why a gas-guzzling SUV when you are single? What if you lose your job? Will you run to mommy and daddy or do you have enough in savings to support yourself for a while? Why not start with something smaller and less expensive until you are a little more established? If you could really "afford" it then you wouldn't have to finance it for 6 years.

C'mon people. It's not rocket science, It's common sense.

steine13

Easy, people...
... we need people like asachar.. lots of them. First of all, it's the American Way, and then, like a friend of mine says: "Where would the world economy be, if the American consumer behaved responsibly?"

Seriously, having pointed out the risks involved, we need to let her make up her own mind, she's a grown-up. Risky financial decisions are not immoral, and many times, they work out fine. It's not what I would do, but if everybody did what I do, the world would be a pretty boring place.

"Buy and Drive what YOU like".

-Mathias

lokki

I can't say too much, as I did something similar to buy the first of my Alfa Spiders. Back before you were born, I'm sure. Still being broke ain't as romantic as it looks in the movies. Thank God it was fashionable not to wear socks with my penny loafers. I was thin and very fashionable, showing a lot of bare ankle when I climbed out of my Alfa. I took the girls for picnics in the mountains as I didn't have the money for restaurants. That spider was a beautiful car. So, I still think you're foolish, but who am I to talk?
The only rule of buying cars for love - when then money gets tight later - no whining!

skilo1557

Trying to buy $17k car. 2 questions:

- Mazda3 Hatchback Invoice is $16k. Can I get it for lower?

-My score is above 700, ran my first and only check at a dealer where I made an offer, and walked out, but the guy was nice and told me my real score. I am 23, and I see all the advertised APRs. It seems like I have excellent credit, but its a young history. Will I be able to qualify for any of the real low APRs, under 5%, at any institution?

Thanks

danf1

It is difficult to say by score alone what you will qualify for. Other considerations are your debt to income, the equity position on the deal, previous auto loans, high line installment loans and then some. You probably won't get the lowest rate, but if you have enough credit established to get approved then your rate won't be too high either. The difference that interest makes to your payment on a relitively small car loan isn't that large, so your payment shouldn't change too much.

skilo1557

Should I tell the dealer I know I can get the advertised 4.5% APR, and challenge them to match it, or should I first run my credit for a second time to see if I can actually qualify for the low rate?

This is my first car purchase. The only debt I have is college loans, not too much.

danf1

The problem with saying that to a dealer is that you are running the risk of him telling you to go get that rate and bring in a check. If a customers tells me that they can beat my rate, I tell them to go ahead and do it. You'd be surprised how many of them sign my contract anyway.

I'd recommend trying your local bank or credit union to see what you really do qualify for if you are going to ask a dealer to meet or beat it. Many times your best finance options are at the dealership. They pay us F&I guys for a reason. We can typically do what your bank cannot.

skilo1557

Thanks for that advice. I am currently a member of a large bank and they admitted they can't offer anything good. Should I become a member of a credit union just to see what they can give me, or should I do one of the internet loans (capital one, eloan). Negative to an internet loan is the check they give you, because I have seen a few postings where people say the dealer is reluctant to accept those loan checks.

danf1

A credit union is typically a good avenue to explore. The problem is that it can be time consuming. Many credit unions require that you are a member for some time before they give you a loan. Most also use a loan committee that typically will meet once per week to review applications. So I guess it depends upon how soon you want the car. Online banks answer fast but you are right that some dealers do not want to take their checks. I can tell you from first hand experience that they can be difficult to deal with.

rroyce10

.......... The funny thing about "Fico" scores are .. they don't guarantee anything ..

Not to sound smart, but you don't know if you have "excellent" credit .. now you may have a high score, but so does the girl at Dilliards that graduated 8 months ago, makes $1,200 a month and has an open Sears and a Burdines card .... check with "free credit reports.com" or some of the other online sources and take a look see .....

Terry.

asachar

Hey,

In case you haven't read I am the idiot looking into buying an fx45 for an outrageous price - well I bought it!! Anyways, I had a great fico score.. but really did not mean anything. they really look for established credit, rather than fico score. that is what got me. I had to go through capital one with an outrageous interet rate..but, I plan to refinance in a year or so
Hope tht helps..

asachar

Thanks for sticking up for me..what a tough crowd!! I maybe making a huge mistake, but I love the car..right?? I can always refinance in about a year. I am happy that's what counts, and the car drives amazingly well!! And I am planning on making all the payments on time....

Thanks for the advice!!

asachar

Thanks for the advice!! I got the vehicle..I plan to refinance in about a year..and I will not be late on the payments!! I love this car!! If I am making a mistake..well, I will learn from it..

Thanks!!

rroyce10

........... You have the vehicle .. now, enjoy it.! -- the FX's are super vehicles ..

In the meantime, what was your final interest rate..?

Terry.

cadillacmike

I've never re-financed a car loan. You're taking a gamble on what direction rates are going to be moving - the recent trend is UP

Good luck. hope it works out.

next time buy a Cadillac

skilo1557

So I'm the person with the great FICO score. Ok, so its not amazing, cus Im still young. But I should be able to at least get around a 6% interest shouldn't I. Reason I ask is the car I want: MSRP 17,7 and Invoice 16. I am offering them 300/month for 60 months. I dont care how they break it down, but if they find me 6% finance they are selling the car for about 16,5 which sounds fair to me (2000 down, 500 recent grad cash back). But they have let me walk out twice.

Shouldn't I get at least 6%. What else can I do.

asafonov

I am offering them 300/month for 60 months. I dont care how they break it down, but if they find me 6% finance they are selling the car for about 16,5 which sounds fair to me (2000 down, 500 recent grad cash back). But they have let me walk out twice.

I think you may be complicating the deal by trying arrange it in terms of monthly payments. Research "prices paid" on your Mazda (but bring a grain or a bucket of salt), check the TMV, keeping in mind that this is the average transaction price in your area, and you definitely should try to do better than that, and offer a reasonable price (OTD - Out The Door, including all taxes and fees, or just including dealer fees but excluding taxes.) Or ask 2-3 dealerships that are convenient to you for a quote.

You should qualify for a decent rate - if not at your bank (but I would try there first, the bank may be big but you may be able to set up an appointment at a local branch), then at a credit union, as suggested above. A couple of years ago, we got excellent rate not from our credit union, but from Pentagon Federal in D.C. - had to pay about $20/year for membership in an organization that provides access to PenFed.

volvomax

Having flawless car credit is always good.
If you have no other hiccups betwen now and when your lease is up, you should be ok.
Esp if you stick w/ the captive lenders, American Honda, Chysler Credit, GMAC, etc.
Some banks will turn you down if you have any credit issues in your recent past.

chevygirl

I wish you the best with your new car, but I still stand by my previous post as being sound advice. That is alot of money per month, and that's before insurance and gas. On the plus side, I have my loan through Capital One, and they are super nice to work with. But good luck with refinancing cause I applied weeks ago and still have not heard back from anyone. But maybe things will be better for you!
Chevy Girl

asachar

You are going to freak...about 9%.but, it really helps that my company covers about $400 a month on the vehicle..so 1 year and I will refinance. I am in love with the fx!! Thanks for the advice, and trust me you will hear from me again!! Capital One has been great, but I got hit with the interest rate..interestingly enough, infiniti was giving me about 8.5 through BB&T, but they wanted the Lien on the vehicle (and would only finance $25,000...and Capital One also wanted the Lien. So I just financed the full amount with Capital One.. no down payment. That way, I don;t touch my savings..just my paycheque.

Angela

asachar

Hey,
Thanks!! Let me know how the refinancing works..how long did you go before you refinanced?? And. what was the interest rate with Capital One??

chevygirl

My interest rate is horrible... 19.85%. I got hit with a couple different factors... I had been at my job all of two months, my credit was subprime, and I hd never had a car loan before. That being said, I am grateful to Capital one for giving me a chance. This loan has raised my fico score a good bit. And, because I bought an inexpensive car(lightly used Cavalier), I have been able to double up my payments pretty often, and I am now right side up 7 months after buying my car. If I am not able to refinance soon, I may just pay to the break even point and trade up, once my fico score hits 700, and I can qualify for more normal financing. Not really sure yet! The Wrangler continues to lure me! I wonder if I can block the Jeep website....
Sorry to ramble... Best to all!
Chevy Girl

rroyce10

............. 9%.? .. the rate, it's not bad, so your okay ... it's the "not putting any money down" part that's gonna come back and smack ya upside your head in 25/35 months ....

Can we say: .. "Owe more than it's worth.. I'm upside down and I can't get up!" ...l.o.l.... anyway, enjoy the new driver and don't spend that $$ in the bank, cuz your going to need it to get you out of this one and into the next one ......





Terry

rroyce10

.......... Don't worry so much about the Fico score ... sounds like your doing the right thing and you have some good history that's starting up ... plenty of Jeeps around and you can buy those anytime ....

Terry.

skilo1557

Confused. Im 23, making over 35k, and I have a FICO above 730. I went to a credit union to get a loan, advertised as low as 4.5 %, and I got completely rejected. They say because of lack of credit history, which is true, I have only had credit cards for less than a year, and this is my first car.

Why did this happen?
Will dealer financers see this rejection on my credit report? Can I lie and say I got around 5.5 % to see if they can do better?

bobst

"That way, I don;t touch my savings"

So you are leaving your money in a savings account, where it earns about 1.5% and is taxable.

Then you are borrowing money at 9%, which is not tax deductible.

Do you see anything wrong with this picture?

bobst

Can you lie? Sure you can, if that's the way you want to live your life.

Maybe try borrowing money somewhere else. If you put enough money down on the car to make sure you are not upside-down, maybe the credit union will loan you the money.

manamal

I dealer is much more likely to be able to get you bought. WHen you go in, be upfront with the dealr about this issue.

rroyce10

... **They say because of lack of credit history** ...

Fico scores don't guarantee anything .. there is lots of 23/30 year old's running around with 700/800 Fico scores, but they have little or no credit history, so that limits their buying potential on homes and cars .... get with a "large" dealer in your area because bigger stores can usually get deals done that smaller stores can't ........ why lie.? as soon as they see the credit report and the history, they'll know ....



Terry.

volvodan1

When a lender looks at lending you money, they not only look at you credit score, but also what that score was built from. You could have a 730 w/ good debt to income, etc.. but if all you've had is a $1,000 Visa and a $500 Burdines card, they may be slow to loan $10, $15, $20,000. that's before you talk interest rate.

exb0

This reminds me. Back in ’89 I was straight out of college, six months on my first job ever, one Visa card on my credit history that I held for only four months, dealer did on the spot delivery of a brand new Mazda 626 at a guarantied rate that they matched from a local bank. I was not reproved, I just called around and got some rates and they matched it. Four banks rejected that loan before the dealer was able to finance me three weeks after delivery. Somebody was sweating that deal. To dealer’s defense, they never called me and asked me to bring the car back.

Oh, the good old days before the Internet.

franklin3

I recently was approved for the FX 35 2005 Sports package. The dealer wanted approx 38,000. It was a demo with 2,600 miles. 1000 down/about 700mth for 60 mths. Anyway i have a 2000 Lincoln LS with very high mileage. I can't afford two car paym't. The dealer told me to possibly sell the car, I owe more than the car is actually worth. He mentioned an upside down in paym't. I really don't know what he actually means. i was approved without trade in. :

CarMan@Edmunds

Hi franklin3. Many consumers are upside down on their vehicles. Being upside down means that you owe more money on your car or truck's loan than it is currently worth as a trade. Your least expensive option would be to continue to drive your Lincoln LS until you are no longer upside down. If you choose not to, they you will either have to pay the difference between what you owe on your car and what you are given for it as a trade out of your own pocket or see if you can roll your negative equity into your next loan. The latter will cause you to be even further upside down on your Infiniti FX35.

Car_man
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lai

I hope somebody can give me some information, I recently traded my 1998 ford explorer for a 2005 dodge dakota slt, I know I should have research first and come in this site but I did not. Big Mistake though.

After 3 months I realized that this truck is not for me and I am thinking about trading it for a 2005 ford explorer now the dodge is still looking the same as how I bought it only I put 4,600 miles on it.

Now I owe $23, 000 on this truck, do you guys think I will be able to get a good trade for this truck? or just sell it myself, I got extended warranty for this one also, anybody got the same expereince?

Thank you so much!!

arache97

I got a 704 and got a 6.81% (60 mths) loan qoute from E-LOANS. Is this a good rate or should I try someone else.

Also when shopping for a car , does getting multiple quotes from different banks affect your credit score? Thanks