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I am interested in possibly purchasing a 2011-13 Ford Explorer Limited. I found a few in my price range of 14k-18K.
Income:23k
Debt: 6k
No mortgage
Scores Range: 590-628
I may consider trading in my 2005 Nissan Pathfinder (paid off), if it would increase my chances of approval.
THanks for your help!
Unfortunately, probably not, without the trade-in.
Here's why I would think that:
Your DTI with an income of 23K is probably too high to support a $400/month car payment, which is what you'd likely incur on a 5-year note with a subprime interest rate on a $15,000 vehicle without the trade-in. Assuming your debt is a loan and/or credit card debt, those monthly payments have to be considered in your DTI, as does rent if you pay any. If you live with parents/someone else who pays the rent, then perhaps, but I'd still call it a long shot.
With trading in your current vehicle, the outlook is probably a bit better - because it will lower your total amount financed - but you are still staring down a large interest rate in any case. If you buy a $15,000 Ford and get $5000 for your trade-in, you're financing $10,000 plus TT&L, so probably around $11,500 by the time all is said and done. At 10-12% interest (which would be reasonable with your scores) the payment amounts are more like $250/month for 5 years. Your DTI in that case is within normal lending parameters.
Neither of these scenarios include GAP or extended warranty or any of that other fun stuff.
Have you checked your Auto enhanced FICO scores? Those may actually be better than your regular ones, if you have a clean payment history on your paid-off vehicle. If those are better, then you will do better on interest - but will probably still need to plan on using the trade-in to lower your loan amount.
Oh ok, well thankfully i don't have to buy a vehicle right now. I can wait til my scores are better. I've worked at a high school for the past 11 years. I finally realized that its time to move on. I will be transitioning into a auto sales position later this summer.
I wonder with the oncoming job change how that will effect my approval?
I think my pathfinder is experiencing transmission issues? I just spent 2500 on other repairs associated with low oil pressure and leaks.
Thanks for your advice.
You can buy a report with them on there from here, among other options.
They often vary a bit from your regular scores, since they primarily weigh previous auto loans, payment history on those, etc. more heavily and focus less on revolving debts and other things that affect regular FICO scores.