Auto Loan Percentage Rate?

[echoanswer]

Hi,

I have a general credit score around 640 (this is sort of average out of all my accessible credit scores). I have a BK discharged a year ago (BK due to longterm unemployment). BK included NO car or home.  No current debt. I have one credit card for 1 month, paid on time (using to rebuild credit), but it's a reopen of an old account from 10 years ago that was always in good standing. I have a good job now for one year & a low rent. My last car is paid off & was always paid on time. 

I got turned down by a credit union recently for a 5K car loan (with 10k down from totaled car). I also stupidly tried roadloans which offered me 17% loan (ahhhh!). 

I obv don't want to do many more hard inquiries.  The calculator on this site shows a percentage rate of about 10% for someone in my score range. Is this realistic?

What kind of rate can I expect that is fair & not crazy high? Can I even get approved?  I'm looking to finance $5-6k for a 60 month new auto loan.

Thanks for any help!

[maiden_girl]

With a recent BK in your history, it will be hard to secure a loan with a low APR. I say, if you don't need a new car...don't get one. Let your BK age.

[echoanswer]

After talking to an auto dealer, they think they can get me a rate between 5-7% because my auto history is very good & I'm putting a lot down (of course they need to run my credit still; I don't know if the rate will suddenly bloat once they get me down there). This would get my payments where I want & very affordable for my income, plus I'll be rebuilding credit. 

The reason I'm looking new is because a decent used car under $10k is hard to find. I won't do salvage title & I don't want over 100k miles. Private sellers are not returning my phone calls (even though I am contacting locals & will pay cash!). I need a car asap because I'm in a rental now & it's costly.

[maiden_girl]

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@echoanswer wrote:

After talking to an auto dealer, they think they can get me a rate between 5-7% because my auto history is very good & I'm putting a lot down (of course they need to run my credit still; I don't know if the rate will suddenly bloat once they get me down there). This would get my payments where I want & very affordable for my income, plus I'll be rebuilding credit. 

The reason I'm looking new is because a decent used car under $10k is hard to find. I won't do salvage title & I don't want over 100k miles. Private sellers are not returning my phone calls (even though I am contacting locals & will pay cash!). I need a car asap because I'm in a rental now & it's costly.

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This is not necessarily true. You have to shop around and don't be afraid to walk away. I bought a USED 2011 Hyundai Accent from a dealership (last year) with 29k miles on it for 12k. The cars are out there!! Also check RENTAL CAR SALES! Enterprise, Hertz, Alamo, etc. They have the best deals sometimes and sometimes have a better up keep than cars with actual owners because they are required to have maintenance done on them to continue renting them. At the end, it'll be your choice! But just make sure you crunch the numberss!

[mtrsprt]

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@echoanswer wrote:

The reason I'm looking new is because a decent used car under $10k is hard to find. I won't do salvage title & I don't want over 100k miles.

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Wow.....You have a lot to learn.  $10,000.00 can buy a beautiful, reliable automobile that will last MANY MANY years...  Used autos are everywhere, and they are only worth what someone is willing to pay.  Automobiles are disposable.  Even $5000.00 cash will buy a great long lasting car.  You just need to know what your looking for, and a little about certain model reliability etc.

Do a Google search on "Reliable cars under $10,000.00"  Also, don't let mileage scare you.  Average lifespan of a domestic automobile is about 140-175K miles and higher....  The more highway miles, the longer they will go. (Less crankshaft revolutions per mile)  

My cheap 36 mile round trip daily commuter has 172,000 miles on it.  It gets me 34-35mpg every tank.  I paid $1700.00 for it 2 years ago, and it will probably go another 3-4 years without a major issue.  1996 Saturn SL...

[echoanswer]

Update:

I appreciate the feedback, and I did have a lot to learn, but I learned from my dad, who gave me very different advice from you guys. Of course he's my dad, but he also worked in the car business for years & works on cars as a hobby & has crazy good credit (near 900!), so not uninformed. 

So I'm going to have to disagree with some of this advice.  I would never, ever buy a car rental. People put those cars through hell. I was strongly advised by my father to not go that route. After having spoken with some of the car rental employees about how people drive those cars, I agree it is a bad idea & not the "deal" it seems to be. I'm sure they make them look pretty to sell though...

Most of the used cars I came across were salavage title for under $5000 & even under $10000 it was hard to find clean titles. Otherwise they had more miles than my last car and/or were older. I don't want to spend thousands of dollars on a car I hate... Yeah, I'm sure I could get a beater for $3k or less, but I don't particularly want to deal with the extra maintenance issues. My last car was at that point already & valued at $10k by the insurance!

The dealers marks up the prices a lot too, and you can't see who the owner was (IMO, buying from a private seller is better). Talking with owners directly taught me a lot about how important it is to see the person who actually owned the car last....

IDK where you live, but in SoCal the prices are higher. If I wanted to get a car from another state, then I'm sure I could get a better deal. However, TIME was an issue. I had to pay for a rental to get to work and did not have the money to pay for several more weeks. Yes, that was my only option for getting to work (I explored many other options & came up with nothing reasonable). 

I did call on many, many used cars which appeared to be good, until you ask for a carfax & they start backtracking on their story and things start to sound sketchy. The other people did not even call me back, even though I said I was a serious buyer with cash & looking to buy now. If I had months to hunt for a car, then I could probably find a nice used one, but that wasn't happening in 2 weeks.  I probably talked to 50 people about their cars & called or visited 15 dealers... it was like a wild goose chase.

So my dad advised I get an "ad car" or a new car advertised for well under MSRP. After my wild goose chase, I decided to explore that option & it started to seem the better idea.

I got a car with an MSRP of $19K+ advertised at $14999 by a dealer, and yes, I got it for the ad price. The dealer was very professional & pulled no bait & switch. I just had to turn down their extended warrantly sales pitch over & over again. With tax & license the total was around $16500, so I financed approx $6,500.

I got just over 9% financing. With my 10 grand down & 60 month loan, I have payments under $150, which is affordable for me without a strain. 

I'm pleased with the 9%. Yes, lower is better, but since I financed so little, I'm not paying a ton on interest anyway. I can refinance eventually & this will help me rebuild my credit after my BK.

[sccredit]

Congrats on your new car

[KoolDev]

During my college years, i totaled an RX-7 GSL-SE.   Dad had won a bet on the golf course.  Guy owed him 600 bucks.  The guy was a used car dealer and dad asked him if he had a car instead of the cash. 

I then drove a $600 pontiac 6000.  I had to carry an extra power steering belt my and my tool box.  Only had to change it once ( at night, 4 hours from home of course).

3 years later, sold the pontiac for $500.  That was a good investment ! hahahahaha