Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
A reporter would like to speak with you about your experience; please reach out to PR@Edmunds.com by 7/22 for details.
A reporter would like to speak with you about your experience; please reach out to PR@Edmunds.com by 7/22 for details.
Options
Comments
Taking the advice of many posts on this board, I have checked my credit on all three bureau's. My Equifax consumer FICO score is my lowest at 685, Exp. 712, TU=750. On my credit report, I have a current CU loan and a current lease, 5 previous car loans(1 from NMAC for my previous 300zxTT) and a lease from Mercedes, all paid as agreed, no lates.No Derog's on the reports.
Will the scoring model auto loans are based on, produce a higher score based on my auto loan history, than the generic consumer score that Equifax provided?
Do dealers usually use a tri-merge or single bureau score?
Approximately what score is required for an "A" auto loan?
What tier might I expect to be in?
Thanks!
I can't imagine Nissan providing any special financing etc. on the new Z.
I would be interested if your Equifax score was higher using an auto loan scoring model.
This isn't a dealer thing, this is a Lender thing .. depending on where you live, how the credit looks, job time, income, stuff like that, some lenders use all three, some might only use one report ..
That's were the "selling" part comes in for a dealer, some lenders read ONLY the scores(s) they look for ways to turn you down, not ways to approve you ... if you are getting your money outside, CU's, local bank, whatever, have all your stuff ready to show the lender ...
____________
**A1leo1 .. Depending on the lender, the "online banks" have a tendency to drop "Drafts" not a certified check, sometimes the dealer is left sitting for 7/12/15+ days waiting for the real money from the deal and if there is any "hick-up", then all the papers have to be redone and that can take another, who knows .. if I understand your post correctly, that may be the reason ..
Terry.
Car_man
Host
Smart Shoppers / FWI Message Boards
Car_man
Host
Smart Shoppers / FWI Message Boards
1) I assume I pay sales tax, registration, title, and license upfront. These are usually not included in the loan. Correct?
2) Are there any fees associated with getting a loan, say an acquisition fee? If so, about how much should I expect to pay? And do I pay these upfront or are they rolled into the loan payments?
3) I assume I pay a down payment. What’s a typical down payment percentage?
Now that the links are out of the way, let's talk about financing. It is in your best interest as a consumer to get pre-approved through a local bank or one that conducts its business over the Internet to finance the car or truck that you want to by prior to negotiating with any dealers. By getting pre-approved, you will give yourself a good idea of what sort of rate you will qualify for and will give the dealership that you are working with motivation to try to beat the rate that you already have. All of the items that you mentioned, including sales tax, registration, title, and license, will be baked into the total price of your vehicle. If any of these items must be paid at lease signing, the dealer that you are working with will just take them out of any down payment that you make. Unlike leases, normal finance contracts do not have acquisition fees associated with them. This is one benefit of financing over leasing because it saves consumers an average of $500 dollars right off the bat over a lease. How much of a down payment you make is really a personal preference. Consumers who have very good credit ratings are often able to finance vehicles without putting any money down. By doing so however, they are setting themselves up to be upside down. This means that they will owe their bank more money on their vehicle than they could sell it for. As you can imagine this is not a good situation to be in because upside down consumers have to pay money or roll negative equity into their next loan to sell their vehicles. I would say that 10% to 20% of your vehicle's purchase price is a reasonable down payment. Many people prefer to put even more don than that to ensure that they will never be upside down. That is of course, unless you are taking advantage of some of the special financing rates that certain manufacturers offer on their vehicles. If you are financing a car at say 0.0%, you are best off putting as little down as possible and using any money that you would have put down to earn interest since you aren't paying any interest on your auto loan.
It is very important to understand how financing works prior to negotiating with any dealers. I commend you for researching this matter. Many consumers do tons of research in an effort to get a low price on their new car or truck and give tons of money back to the dealer because they did not adequately understand how financing works. Please let me know if you have any other questions.
Car_man
Host
Smart Shoppers / FWI Message Boards
While it is a good idea to put money down when financing a new vehicle, it definitely is not a good idea to put any money down when leasing. Consumers are allowed to lease vehicles without making any down payment. I always advice anyone who I speak with in these forums not to put any money down when leasing for two main reasons. The first is that if the vehicle that you are leasing is totaled in an accident or stolen and never recovered during your lease term, your insurance company pays off the bank that you were leasing it through and your down payment essentially disappears. The second main reason is that down payments on leased vehicles do nothing to reduce their lease-end purchase prices. So it would cost you exactly the same amount of money to buy your leased vehicle at the end of your term if you had made a $10,000 down payment, or had put absolutely no money down.
Car_man
Host
Smart Shoppers / FWI Message Boards
On manufacturer's websites, they will allow you to get pre-approved for financing. For example, I am looking at a Honda, if I go through the pre-approval process on the Honda website, will that tell me if I qualify for the special APR's Honda is offering?
I am relatively new to this site and have been searching extensively (as well as many other places), but have not found much information. I would appreciate any help.
My fiancee has been in the U.S. since 2000 on an H1B visa. She is in her late 20s. In this time she has not been able to get any sort of credit (has applied for gas, store and credit cards, but no more than 3 times total over the years). She has utilities in her name and has had an apartment lease in her name (we now live together in my house for which I am the only one on the mortgage). She bought an old corolla privately for cash a couple of years ago, and it's been great, but is starting to get unreliable. She is looking for a new car in the 14K--16K range. She has 6K as down payment.
She tried to get her credit score, only to be told that her identity could not be verified (via lending tree and my fico). She applied for financing via lending tree and only got positive responses form the predatory buy here/pay here places. She apparently does not exist from a credit point of view.
She makes a little over 40K a year, has been with the same employer since late spring 2000, and has not had late payments on utilities or rent. Her immediate interest is in getting a new car, but longer term she wants to build up her credit history. A car loan seems to be a good way to do this, but I do not want her to be stuck with a lousy used car and criminal interest. I am willing to cosign (just checked my scores--717 to 730) but want to make sure that she is the one building the history, not me.
I'd like to at least have a little more information before talking to an F&I guy at a dealer.
Questions:
1. Does anyone know if the H1B status is affecting her ability to get a car loan?
2. We are looking at Honda Civic, Scion Xa, Ford Focus, VW Golf, Mazda Protege5, and Toyota Corolla. Does anyone know if any of the captive finance companies for these brands are especially accommodating to this type of situation?
3. Is a car loan a solid way to build credit history (only other option seems to be a secured credit card that can be converted to unsecured after about a year of regular payments)?
4. She has not applied to Capital One. Might this be a good option?
I am looking elsewhere for information as well, but I would really appreciate it if anyone here could provide any information.
While not familiar with visas, one thing your girlfriend should have is her credit rejection letters. They would clearly spell out why the various creditors rejected her.
A car loan is the second largest credit pull anyone can make - a mortgage is #1. If you both have accounts at a local bank, consider co-signing for her car loan from them. It builds her credit and is backed by someone with established credit history (you).
kcram
Host
Smart Shopper and FWI Message Boards
I may be wrong but there are elements of the lease formula that I dont think can be supplied by the posters here such as money factor, residual and possibly other things I am missing.
JMO- I have never been a fan of leasing...especially in todays world of low/no APR's and rebates. I dont like paying for goods that I will never own.
Im guessing there are no specials on the TSX since its a new model. Either way low APR notes can be easily found(assuming you qualify).
If you can qualify for a good APR and plan on keeping the car...your monthly payment on a purchase will likely be a little higher...but the car will be YOURS and you can drive it more than the 15k a year should you need it.
Significantly exceeding the mileage limit at lease end can be quite costly.
FWIW- I'd lean towards a purchase.
Car_man
Host
Smart Shoppers / FWI Message Boards
what if I bought the 330? I have a 94 BMW with 38,000 miles on it and I probably can get $6,500 from a trade.
By the way do you think I am crazy to trade in a '94 325
for a new car?
Thanks
Car_man
Host
Smart Shoppers / FWI Message Boards
Terry.
Then you have over $18K (even at today's meager interest rates on savings accounts) *plus* the value of your 5 year old trade... to go out and pay cash for your next car.
I know of a few people who do this, including my Dad. He has never borrowed money to buy a car in his life. I do agree, however, that people who have the discipline to work this plan are very few.
The Sandman :-)
(As much as I love cars, we tend to drive mainstream economy cars, Camcords and Corolivics, and am pretty satisfied with them.)
James
Thanks very much
Reellaw
1. Purchasee the 300xi for $39,970, including all taxes, fees, title, etc.
2. You have very good credit, and get the 4% rate from Peoplefirst.
3. 60 month loan
4. $6k down, including any trade (i.e. you finance $39,970-6000=33,970)
Your payments should be $626 a month.
There's a calculator for this at http://www.edmunds.com/new/2004/bmw/3series/100351179/calculator.- - html?tid=edmunds.n.pcalc.calculator.intro_calc.1.*
Reellaw, the payment calculator that is available here at Edmunds.com will tell you exactly what your finance payments should be for this car. All you need to know is the car's full MSRP, its selling price, and the interest rate that you will be paying. It is in your best interest as a consumer to get pre-approved to finance the car that you want prior to negotiating with any dealerships. By doing so you give yourself a good idea of what sort of interest rate you will be able to get and will possibly motivate the dealership that you are working with to beat the rate that you already have been approved at.
Car_man
Host
Smart Shoppers / FWI Message Boards
Just purchased a 2001 Pathfinder LE for about $20,000, with 22,000 miles. I'm only 23 with limited credit, so even though I put down $5500, my payment is around $375/mth. I check the documents, I have a interest rate of 17.8 percent!!!!
How long should I pay this note before I can consider refiancing!!
Thhanks guys!
I definitely recommend a year minimum. In order to be given a rate that high, you must have had no history to speak of. Making at least 12 solid on-time payments will demonstrate your ability to repay, and will also help lock in your employment history as well (as opposed to bouncing between McJobs tying to make the payments).
What you do NOT want to do is sell or trade. Right now, you're about as upside down as a loop rollercoaster at its key point of the ride. Trying to get out of this vehicle loan will still leave you on the hook for most of the principal, so be prepared to stick it out for a while, then re-fi.
kcram
Host
Smart Shopper and FWI Message Boards
I'm refinancing my mortgage at about 5.625%.
I can take out a larger principal and the interest would obviously be deductible.
Are there any calculators to compare the two approaches? Despite the higher rate on the mortgage, the tax deductibility may make the rates closer.
Don't know if home equity loans have better rates.
Nor have I really looked at promotional rates offered by the car companies. The zero rate loans appear to be on makes that I'm not interested in, which are probably going to be in the luxury or near-luxury import segments.
For example, if your Fed tax bracket is 25%,
then 1.00 - .25 = .75
So .75 x 5.625% = 4.21875% . This is your after-tax rate, or what the interest costs you after factoring in the tax advantage.
Careful, though.
One other thing to consider - if you get your car dollars via a home mortgage re-fi, you might still be paying off the money long after the car has given up the ghost.
But you're right, I would pay $170 more a month for the life of that mortgage or until I sell the house.
I'm going to have Carmax prepare an offer on the car not as a trade-in but as a sale. Of course they will know about the lien because I dont' have the title. Will they low ball the offer because of that? Assuming I can get something between the two figures above am I in a "right side up" situation now?
Any comments or suggestions on best way to proceed, especially if I can save sales tax by trading it in, would be appreciated.
If you want the deductibility, do a 2nd mortgage. HELOC lines of credit are fully deductible. We have one through our Credit Union. Then you can pay it off off the same as a car payment, within 4-5 years the term of a common car loan, not 30...
Yes, any time you owe less than the wholesale value of the vehicle, you are right side up, and have some cash equity that you can apply towards a new vehicle. The reason I stipulate "wholesale" is because that's the cost dealers are trading the car in the auctions. This is generally the lowest amount a pro will buy the car for, so you need to be at or below that value in your loan payoff to be right side up.
kcram
Host
Smart Shopper and FWI Message Boards
others: re. the tax issue: I meant sales tax: if I traded this in on a new car wouldn't I avoid paying sales tax on the amount I get on the trade in?
But the refinance would have been one of those no-fee loans, not even out of pocket for the appraisal. However, it would have been slightly higher rate than I could have gotten if I did pay fees (still would have been lower than current loan).
A HELOC might not be bad if the interest rate spread wasn't much higher than the slightly under 4% car loans that are available and I could pay it off early and the fees weren't too bad.
I have a question for wco81, do you plan to pay additional to the principal to offset the loss of equity?
If so, it could work, still you've put your home at risk to buy something that depreciates and will need to be replaced 5-6 times during the loan period, assuming that you stay. If 5 years from now, you do decide to sell and did NOT put down additional equity, you risk having less to put down on your future home AND will probably not be too far away from needing to replace the car.
You WILL have had more cash to spend, which is probably what you will do.
Good Luck!
While a deposit is usually refundable if there's no sale, read that purchase agreement carefully. A deposit may not necessarily be refundable even if you back out before delivery. A "hold-for-sale" deposit is different from a down payment - all the deposit is doing is removing the car from circulation until you formally agree to buy it. Many dealers make such deposits non-refundable so that they're protected from such indecision on the buyer's part - they could have sold the car to someone else in the meantime, or if it's an unusual combination of colors or options, may need that deposit to offset the selling price.
If the financing fails, you must return the vehicle if you've taken delivery, and all money paid and your reade-in vehicle will be returned to you.
kcram
Host
Smart Shopper and FWI Message Boards