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I know someone in the market to buy a car who has several negatives on their car report. They have repos and other negatives, of which I'm not even aware. What would be the best approach for them to take when looking at vehicles? Obviously they can only get pre-owned. No new. And having a co-signer is not an option. How much of a down payment would help them to gain some leverage when making this deal?
Might be a good idea to peek at their report before diving in.
What do you mean by "leverage"? Negotiating a good deal or interest rate?
My gut says fight tooth and nail for the best deal possible but don't let credit be run until the bitter end, LOL! I just don't know how someone with credit that messed up gets a great interest rate unless putting more than 20% down.
Also, I'd guess their auto-enhanced FICO would be pretty ugly.
I would have them check out a local CU with a copy of their CR. They may not give them an idea if they would be approved or not but it won;t cost an INQ and they may offer suggestions on how to improve their chances. It goes without saying they would need to work on their CR to make them more attractive to a lender.
Even if they get a bad rate to start, they may be able to refi if their CR improves so it is all based on what is on their report.
IMHO if they are not willing to share the info with you by showing you a copy, there isn't much you can do to help them and I would view that as a red flag.
@pizzadude wrote:
You might also want to take a step back and ask if this person has really addressed the issues that led to these problems. Was this a one~time hardship or is there a pattern of repeated financial mismanagement ? I'd question whether they are ready to take on a car loan right now ~ you should ask some questions before you consider help them get into another situation that won't have a happy ending. They will very likely be looking at an unpleasant interest rate.
+1. I think the thread title could also be "ANY option for buyer with multiple repos."
I'm curious how this shakes out. I have to bite the bullet soon and need to know how much flexibility companies have when it comes to interest rates.
I miss the old days when $500 beaters would run for a year and gracefully be sold for scrap, LOL!
@pizzadude wrote:
You might also want to take a step back and ask if this person has really addressed the issues that led to these problems. Was this a one~time hardship or is there a pattern of repeated financial mismanagement ? I'd question whether they are ready to take on a car loan right now ~ you should ask some questions before you consider help them get into another situation that won't have a happy ending. They will very likely be looking at an unpleasant interest rate.
I agree. And I honestly know the answer to the question. They do need a new car though because their current car needs more in repairs than it's worth (in my opinion), not to mention the car is not legally theirs (long story...they're driving it legally but it does not belong to them...capish?). I think they just have to eat it on this loan with a terrible interest rate and rebuild their credit.
@drkaje wrote:Might be a good idea to peek at their report before diving in.
What do you mean by "leverage"? Negotiating a good deal or interest rate?
My gut says fight tooth and nail for the best deal possible but don't let credit be run until the bitter end, LOL! I just don't know how someone with credit that messed up gets a great interest rate unless putting more than 20% down.
Also, I'd guess their auto-enhanced FICO would be pretty ugly.
By leverage I meant a good deal. The interest rate is going to suck with that kind of history.
You should have your friend look into buy here pay here lots. Thats their best option most likely, but like everyone else said you have to weigh out if the person is able to make the payments and maintain the loan.
@johnnie23g wrote:You should have your friend look into buy here pay here lots. Thats their best option most likely, but like everyone else said you have to weigh out if the person is able to make the payments and maintain the loan.
That's really their only choice at this point. Any other lot would require a co-signer. I don't have to worry about them not making payments...that's their problem. I just wanted to see if there was any sage advice out there other than what I already know.