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Trying to meet requirements for a car loan, up to 6y old, 60K miles, sort of
I've got a few different mileage limits to work with. If the car has 60000 or less I can get a term of 6 years, 60001-70000 gets 5 years, 70001-90000 gets 4 years, 90001-100000 gets 3 years, and I can do a 2 year note for up to 120000 miles. I am most interested in a 2009 or newer 4-door hatchback with automatic transmission (or a CVT), 4 cylinder engine.
Of course this is a bad credit situation and the interest rate is a few hundredths short of usurious in my state. But this will allow me to get a vehicle. Me, the guy who owned 74 vehicles until a financial hit 2 years ago, has been without a car in his name for awhile now. Sold all three I had left to move to Ohio for a job.
Anyhow, I think there are five distinct ways I can handle this loan approval.
1) Buy the absolute cheapest vehicle to meet the loan requirements. Right now that seems to be a 2009 Versa hatchback for about $6200 with 113K miles. With $1500 down, a 2 year note would be about $300 a month (about $70 a week) and I would spend somewhere around $8700 total. Biggest downside to this choice, the car has a manual transmission and my wife wouldn't be able to drive it.
2) Buy something decent, like the 54K mile 2011 Versa 1.6 sedan that inspired this thread, or the 2009 Sentra 2.0 sedan or the 2010 Versa SL hatchback or the 2011 Fiesta SE sedan, all around 60-70K miles, all priced in the $8000-$900 range. This would come out to about $300 a month for 3 years, or about $11500 total over the course of the note including down payment, taxes, title, tags.
3) Buy one of the nicer cars I've found, a 2013 Ford Focus SE hatchback with 39K miles for $11600. I could put that $1500 down and be financing right around $11000 for 4 years at $390 per month (about $20600 total) or 5 years at $350 per month (over $22K total) and I don't want to think about a 6 year note...
4) Spend the maximum (about $15125) and go the full six years but get a BRAND NEW car, as in a 2015 Fiesta SE hatchback, or a 2015 Accent GLS hatchback, or a loaded up Mitsubishi Mirage ES, or a Kia Rio 5, or a Nissan Versa Note. I would have to pay tax title and tags in cash and only have $500 left to put down. This would be six years at $390 a month, or around $30,000 all told. Twice as much as the car was worth new.
5) Put the loan approval in the round file bin, save up an extra $1000-1500 in cash, and pick up a 2001-2004 Focus ZX5, Pontiac Vibe, Toyota Matrix, or something else 10-15 years old and under $3000.
Not much left for savings if I'm putting all that fuel in the Suburban though. If it gets 14mpg and I drive 4500 miles in a month, that's $800 in fuel. If I had a 32mpg car (which is low compared to the mileage some of these cars are capable of getting) I would spend less than $400 in fuel. There's that car payment right there. I wish I could find something decent for $1500 cash, but everything in that range would be so embarrassing to drive that no one would want to use my roadside service. The Suburban at least looks nice and isn't rusted out or smoky or loud.
Of course this is a bad credit situation and the interest rate is a few hundredths short of usurious in my state. But this will allow me to get a vehicle. Me, the guy who owned 74 vehicles until a financial hit 2 years ago, has been without a car in his name for awhile now. Sold all three I had left to move to Ohio for a job.
Anyhow, I think there are five distinct ways I can handle this loan approval.
1) Buy the absolute cheapest vehicle to meet the loan requirements. Right now that seems to be a 2009 Versa hatchback for about $6200 with 113K miles. With $1500 down, a 2 year note would be about $300 a month (about $70 a week) and I would spend somewhere around $8700 total. Biggest downside to this choice, the car has a manual transmission and my wife wouldn't be able to drive it.
2) Buy something decent, like the 54K mile 2011 Versa 1.6 sedan that inspired this thread, or the 2009 Sentra 2.0 sedan or the 2010 Versa SL hatchback or the 2011 Fiesta SE sedan, all around 60-70K miles, all priced in the $8000-$900 range. This would come out to about $300 a month for 3 years, or about $11500 total over the course of the note including down payment, taxes, title, tags.
3) Buy one of the nicer cars I've found, a 2013 Ford Focus SE hatchback with 39K miles for $11600. I could put that $1500 down and be financing right around $11000 for 4 years at $390 per month (about $20600 total) or 5 years at $350 per month (over $22K total) and I don't want to think about a 6 year note...
4) Spend the maximum (about $15125) and go the full six years but get a BRAND NEW car, as in a 2015 Fiesta SE hatchback, or a 2015 Accent GLS hatchback, or a loaded up Mitsubishi Mirage ES, or a Kia Rio 5, or a Nissan Versa Note. I would have to pay tax title and tags in cash and only have $500 left to put down. This would be six years at $390 a month, or around $30,000 all told. Twice as much as the car was worth new.
5) Put the loan approval in the round file bin, save up an extra $1000-1500 in cash, and pick up a 2001-2004 Focus ZX5, Pontiac Vibe, Toyota Matrix, or something else 10-15 years old and under $3000.
Not much left for savings if I'm putting all that fuel in the Suburban though. If it gets 14mpg and I drive 4500 miles in a month, that's $800 in fuel. If I had a 32mpg car (which is low compared to the mileage some of these cars are capable of getting) I would spend less than $400 in fuel. There's that car payment right there. I wish I could find something decent for $1500 cash, but everything in that range would be so embarrassing to drive that no one would want to use my roadside service. The Suburban at least looks nice and isn't rusted out or smoky or loud.
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Given your circumstances, option #2 seems like a happy medium. You can find a decent car with plenty of life left in it, and save enough in gas to make the payment.
Have you tried going directly to some of those other dealers and asking for credit? Even a CARMAX car that is $2K overpriced might be a better deal, if they can get you financed at a reasonable rate.
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