Can I qualify for amount I want?

Anonymous · ‎03-22-2011

I've been readin the myFico forums and have learned a lot. I've already asked a lot of questions.

I'm car searching and hopeing ot buy in April. I was all set on a brand new car but now I'm wondering if I'll be approved for that much?

I make 24k/year before taxes. But my job provides my apartment, utilities, cable, internet. etc... After I pay for my gym membership, cell phone, and student loans I have about 1200 left over so I can easily get a 20k car. I'm just wondering if I can even get approved for that amount since it's close to my salary?

If I can't, what are my chances for a 15-17k used car?

cdtotten · ‎03-23-2011

We will need more information. What are your current FICO scores, how long on your job, any past car loans, any delinquencies, etc.

Based off the limited information so far, I believe it may be difficult to land a car loan for $20,000, when you only make $24,000 a year. With only $2k a month gross, your ratios would be pretty high. A $20,000 car @ 5% for 4 years is right at $500.00 a month if you have nothing to put down. Thats 25% of your monthly income.

My concern would be, what if you lost your job and had to start paying for lodging and utilities...

Looking forward to more details.

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Anonymous · ‎03-23-2011

1- if your job is with the US military I recommend becoming a member of Navy Federal Credit Union where you will probably be able to get financing. If youhave any family members in the US military I would recommend you asking them to sponsor you.

2- if your job is so "sweet" and you have so much cash left over each month you should be able to come up with a 3-4 thousand dollar downpayment, this will help yo cause in 2 ways: lowering your eventual monthly payment and help make the loan more attractive to finance.

3-jobs that as a factor of employment give out housing do inhibit financing as banks lok for "income"

not perks.

I do not think you are hopeless, but do think that for a 20K car you need to expect a 23K transaction, so it would be best if you could put down about 3-4k At that point at 5 years yo uwould have a payment below $400.

It also sounds to me that you do not have much credit experience in you file so this would help you secure a loan anyway

Anonymous · ‎03-26-2011

Thanks for the advice, usmc. You've answered several of my questions over the last couple of months.

I took the plunge today. I got a brand new 2010 Corolla for 0% financing. I got $1000 (kbb is about $500) on my trade and after rebates I didn't have to put down any money although I was prepared to put down about $2k. I think they were just ready to get the 2010 off the lot since the 2011's arrived about a month ago.

Thanks for all the help. It's good to have people like you with wisdom handing out honest advice.

JayRizzo · ‎03-27-2011

Congratulations!!! And asking as many questions is absolutely fine because you were prepared to make a major purchase, not just applying for any old credit, but a major purchase so you want to be ask edu-mo-cated as possible. Also, you received great feedback -- excellent!!!

It means nothing now, but I was going to add... don't compare a $20k car to your $24k/year salary unless you're financing for 1-year (hahaha). Normal financing stretch an average of 36 months.

But, you did it!!! Congrats!!!

Anonymous · ‎03-28-2011

@Anonymous wrote:
Thanks for the advice, usmc. You've answered several of my questions over the last couple of months.

I took the plunge today. I got a brand new 2010 Corolla for 0% financing. I got $1000 (kbb is about $500) on my trade and after rebates I didn't have to put down any money although I was prepared to put down about $2k. I think they were just ready to get the 2010 off the lot since the 2011's arrived about a month ago.

Thanks for all the help. It's good to have people like you with wisdom handing out honest advice.

Congrats!

i would have put some of the money you wanted to down, as that would lower your monthly payment (you never know where you will be 3 years from now) and would have helped with your negative equity. I would recommend calling the dealership and seeing how much it would cost to purchase GAP coverage and see if you can pay that seperately- you really may wish to consider GAP.