Finance, Pay Cash or Just Wait?

[BigTek]

I live in the suburbs, my credit sucks and I really need a car, but its hard to make a firm decision...

Is anyone else going through this or has anyone been here with good or bad experiences with either option...everyone please weigh in on the situation, whats the best approach? 

Need help in making better financial decision$.

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Option1 - finance a small car loan with a high interest rate? 
Pros... I'll have a reliable car and I can get to work and make more money with side jobs.  I can always refinance later Cons...high interest rate, lose some credit score points, dealing with shady car dealers

Option2 - just buy a cheap car for $2000?
Pros...I can still get around.  This gives me a little more time to fix credit and save more money Cons... but I won't know the reliability until it breaks down...then I've wasted more money with repairs or loss of a crappy car

Option3 - just wait to save more money and increase my credit score?
Pros...this would give me the most time to save and fix the credit with spending.  Cons...I can't get around....loss of potential income.  This is tough because there are just some places I can't get to without driving and getting a ride is not always possible. 

BTW: Since I lost my car last year (May 07), I've been getting around by renting cars (way too expensive & doesn't allow me to save), getting rides from friends (not always possible) and riding a bike..

Message Edited by BigTek on 07-14-2008 09:58 AM

[marty56]

Please check a CU.  Mine looked at my TU and EQ which are your best scores.  Take your report down to them and see what they say.

[Anonymous]

Option 1... You don't know if you will have a reliable car or not since its used. IMO not worth paying the high interest. Everyone says I can refi later however since you have such a high rate when you go to refi since most of your payment was on interest the value of the car is below whats owed and you'll be upside down and need a chunk of change at the time of refi. A lady that works at a convenience store I go to weekly paid 12K for a 2002 Trailblazer that the reverse gear went out in, her interest when she pays it off will be higher than the sell price she paid for the suv and she has to push it into a parking space every morning when she gets to work.

Option 2... I would go for this option if you have the spare cash. Have the car inspected by a mechanic of your choosing. Most sellers won't mind you doing this if they do mind then you don't want to buy that car. We paid 1500 for my sons car ( I had it inspected ) a 1998 model, it was more reliable than the car I was driving that I bought new in 2004! He is still driving the car without the first mechanical issue. We keep all the regular maintenance done on time.

Option 3... By going with option 2, you could start a savings account with the amount that you could afford on a payment and deposit that amount monthly for 6 months to a year, have a down payment and have time to work on your scores!

Which ever option you go with good luck with your purchase! And always check the CU's rates with your scores before getting dealer rates.

[moreFICOplease]

I would go with option 2 or 3. Leaning towards two since that's what I was going to do.

You can find a good deal and a reliable car that will get you through the next year or so while you work on your scores.

I would personally never do option 1. It's just not worth it.

[BigTek]

Sounds like solid advice ..I will consider options 2 & 3 if the CU doesn't approve me.