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Established Member
f1ared
Posts: 23
Registered: ‎04-22-2013
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Brand new car with bad credit?

 

Hi,

 

First of all, thank you for anyone who can help me with this. And I'm sorry if my question has been answered before.

 

My fiance and I are looking into buying a very slightly used or brand new Dodge Caravan. (We have 3 kids, possibly another on the way) I'm looking to pay no more than $21k for the car itself brand new. I'm not sure what amount of fees there would be, or what the taxes would be on it. I'm guessing dealership fees would be no more than $1,000 or something combined. Taxes I have no idea.

 

I have about $10k to put down.

 

This is what the big picture looks like:

 

Credit: My score is 624, but it may fluctuate a bit by the time I'm ready to purchase. I have a Cap.One CC that got charged off, but I paid it in full. I believe that is due to fall off in a year or so. I currently have a Secured CC from my bank, that I have been paying off completely the past 5 months. I also have an Express C.C. that I literally just got approved for. Those are the only 3 lines I have, and a few inquries.

 

My fiance's credit on the other hand is shot basically. Last time I checked her score was around 510 or so. She ruined it on her current car, I think she has about 21 missed payments. However, she has a long credit history, with C.C.'s, Auto loans, and Student loans...but the student loans are deferred and are pretty high I believe. She also just got approved for a Cap One C.C, $300 limit.

 

Income: My income is about $17k/year, possibly a little more since I go full time for 2 1/2 months over the summer. I've been employed for about 5 years at this same job. My fiance's income is about $24k/year, and she has also been employed for 5 years.

 

Collateral: Hopefully a brand new, 2014 or 2013 Caravan. (since they are so dirt cheap and we need the space)

 

Loan amount & down payment: Not sure what the loan amount would be exactly....I can't foresee a loan being higher than $13k MAX. I have $10k to put down, and also a trade in worth atleast $3k, I'm pretty sure it's worth more.

 

Transaction type & loan terms: Purchase. Hopefully a 5 or 7 year loan.

 

I would be the co-signer for my fiance, I don't drive so the loan can't be in my name (or can it?). However I have a very limited credit history, so I'm not sure I'm her best bet...but we have no one else.

 

Am I crazy or dreaming to even be considering this? Am I missing something huge? I just figured with such a small loan on a brand new car...maybe we could get approved because of the colateral itself. The bank would make money if they had to repo it.

 

Established Member
f1ared
Posts: 23
Registered: ‎04-22-2013
0

Re: Brand new car with bad credit?

bump

Frequent Contributor
Chrisla2077
Posts: 362
Registered: ‎04-26-2010
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Re: Brand new car with bad credit?

of course, YMMV, but I don't think you'll have much of a problem especially with such a large DP. I have scores in the low 500s and was offered a 2013 (this was last year) Chevy Cruze for a $1,000 down payment and only 8% interest. I'm sure the right dealer will work with you.


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Established Member
f1ared
Posts: 23
Registered: ‎04-22-2013
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Re: Brand new car with bad credit?

Chrisla2077, did you have a co-signer or was it by yourself? This was at a new car dealership I'm assuming? Also, have you ever had an auto loan in the past? What finance company offered you a loan with only 8% interest?

 

Thanks!

Frequent Contributor
Chrisla2077
Posts: 362
Registered: ‎04-26-2010
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Re: Brand new car with bad credit?

This was back in June. I did not have a cosigner. It was at a Chevy Dealer. According to them, GM has a financing deal on new cars for those with bad credit. I did have an auto loan that began in 2006 was refinanced in 2008. So a paid off loan appears on my CR..but so does a repo.


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Frequent Contributor
Chrisla2077
Posts: 362
Registered: ‎04-26-2010
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Re: Brand new car with bad credit?

In my experience, with many of these dealers...cash talks and 10k should talk very well for you. Just shop smart.


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CARDEALWIZARD
Posts: 16
Registered: ‎01-17-2014
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Re: Brand new car with bad credit?

[ Edited ]

The down payment will help you tremendously.  In short, you have about 10,000 reasons to ride.  You really need to use that cash to your advantage, some banks will give you an interest rate based off the loan to value and your credit, so the derogatory credit you and your wife have can be overshadowed by the substantial down payment and lower loan to value.  However, you must be very careful buying and financing a car at a dealership with that kind of down payment.  If you sign the contract and take delivery of the car without being 100% approved the dealer will charge you per day and per mile if the dealer can't get the loan terms worked out, even though the dealer will often tell you that you are approved the way the contract is being signed when you originally buy the car.   The dealer may get the loan approved, but at a higher rate and payment, and you will be forced to sign the new contract or forfeit part of your down payment. Most dealers usually charge about $50 per day and 40 cents per mile, and this is why the dealer will be very aggressive when deciding to "spot" a deal with a large down payment., they know they are protected. This is process is called a spot delivery, and in the midst of all the paperwork being signed, you will sign and agree to this whether you know it or not. This agreement is called a rescission agreement.   The only way t avoid this 100% is to get pre-approved with your own lender before you even arrive at the dealership.  Even though your credit is less than perfect, you can still apply and get approved online, even if you haven't picked out a car yet.  There are several options for online bad/challenged credit car loans,  Modcut

 

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New Visitor
Cdrescher
Posts: 1
Registered: ‎01-20-2014
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Re: Brand new car with bad credit?

I don't have much new information to offer accept this... A car's value depreciates significantly the moment you drive it off the lot making it possibly the worst investment one can make. Personally I don't think there is any reason to give a dealership $10000 of your hard earned money. Especially when you could be investing that money in a tax free retirement fund that will actually grow. If I were you I would only down pay what is absolutely necessary to get a car if down pay anything at all. Totally possible. Seriously with three kids and more on the way save that money.

Valued Contributor
wHiTeSoL
Posts: 1,053
Registered: ‎07-09-2013
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Re: Brand new car with bad credit?


Cdrescher wrote:

I don't have much new information to offer accept this... A car's value depreciates significantly the moment you drive it off the lot making it possibly the worst investment one can make. Personally I don't think there is any reason to give a dealership $10000 of your hard earned money. Especially when you could be investing that money in a tax free retirement fund that will actually grow. If I were you I would only down pay what is absolutely necessary to get a car if down pay anything at all. Totally possible. Seriously with three kids and more on the way save that money.


Sorry, I don't agree. While buying a new car IS a horrible investment, it's the only way to guarantee you get it exactly the way they want it, if they are willing to pay the additional that's up to them. 

 

That $10000 is a huge bargaining chip she has in their pocket that can mean the difference between a 20% and a 10% loan, run the numbers and see what you can get with various down payment amounts . Over the course of 5 years they will save a substantial amount of money. 


   3/12 $3500     6/12 $1200      10/12 $1500   12/12 $3400    6/13 $12000      7/13 $5000      7/13 $2500       8/13 $2000    8/13 $6000

  | CSP (AU) $12,000 | Amex PRG (AU) | United $6,000 | OCCU $12,000 | Ink Bold | GM $3,200 | DCU $7500 | Luthansa $9000 | SPG $6,000 | Citi AA Executive $11,000 | Ink Plus $5,000                                                                         | EX 2/7 697 | EQ 10/27 721 | TU 12/15 719 |

Established Contributor
RushXTC
Posts: 772
Registered: ‎07-01-2013
0

Re: Brand new car with bad credit?

[ Edited ]

You can be on the loan, My friend just got his new 2014 Dodge Avenger with 23 miles with no license, LOL and bad credit! $22,000 - Rebates, $19,xxx we put $600 down and financed $18,xxx.

 

From his experience (I've been with him since day 1 of his car shopping) I'd go directly to the Dodge dealership. Chrysler financial is the only financing company that approved him for a car purchase. His score is super close to 500 flat, Just can't remember what his # was.

 

You're going to get approved, 100% chance especially if you have $10,000 to put on the down payment. If you choose to give them a try, Give me an update as I'm hoping you get what you want! :smileyhappy:

 

Edit: Also, Since you're going to pay about 50% of the vehicle right off the bat, I'd get a lower term, like 36 or 48 months, just to avoid paying more interest.

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