Financing an 18 year old vehicle

Anonymous · ‎05-30-2017

I'm looking to pick up a project car but I want to use the purchase to add more activity and history to my credit repair process. I am looking to pick up a 1999 Mazda Miata with 95,000 miles in mint condition. I've got the dealer to a grand under book value at $4,500. However, I want to finance this and add some payment history to my credit. I've been repairing it since December of 2016. I currently have 657/666/650 scores. I have an existing auto loan with Santander with all payments on time for over 4 years. I have no collections (except one on Experian that should be coming off once my dispute is handled). My credit card balances are high but I am paying those off. I'm just not able to pay them off in full and getting a personal loan to pay them off is harder than getting an auto loan.

What I don't want to do is start fishing for a loan. So I'm wondering if anyone can recommend me a lender that they are fairly confident will finance an 18 year old vehicle with my credit situation? Obviously nobody knows for sure but I am just asking from experience and other peoples situations.

Some additional information: I make $83k/year and bring home about $2.7k/mo after taxes. I have about $1.8k/mo in monthly bills including rent, car, insurance, etc. Most banks and lenders won't go beyond 10 or 15 years old. I've heard PenFed will and the car falls within the mileage guidelines but I've also read some posts that they are sticklers. If I was able to, I'd rather take out a $20k personal loan and pay off my existing car loan, all my credit cards, and the new car all at once but I'm not able to find anyone who will give me that loan. Unsecured personal loans are harder to come buy than a $4.5k auto loan.

Thanks in advance!

Anonymous · ‎05-30-2017

Just do a personal installment loan for that amount.

Anonymous · ‎05-30-2017

@Anonymous wrote:
Just do a personal installment loan for that amount.

I'm not able to get approved for an unsecured personal loan from my bank or local credit union. They say my credit utilization is too high and my balance on my current auto loan is too high relative to the original loan amount. I've tried for a personal loan just to cover the car as well as for a personal loan to pay off my credit cards and cover the car. Both have been denied.

I have about $6,800 in total credit card debt. My current auto loan has a $6,100 balance remaining on the $19,000 original loan with no late payments at all.

At this point, I am entertaining the idea of going with someone like OneMain to get a loan for the credit card balance and the car. I spoke to them on the phone and while they obviously can't approve/deny me without running my credit, they did say I am in a much better situation that the majority of their customers. This would pay off my credit card balances. The only reason they are high now is that I went 7 weeks with no income while transitioning from my previous job to my new job. Many different factors played into that but I had to utilize my credit cards to survive. I didn't really use them before that and haven't used them since. My job pays me more than enough to cover my bills and extra purchases without needing to use the credit cards. I only took them out in December, 2016 in order to repair/rebuild my credit after not using it or paying any attention to it for 8 or 9 years. I've cleaned it up as much as possible and other than the credit cards balances the only thing I can really do to improve it is to utilize it and build up payment history.

Anyway, I would pay on that loan for about a year or so and then try to refinance it with my local bank or credit union. With a lower APR I could have it paid off in a year.

StartingOver10 · ‎05-30-2017

Are you aware that OneMain is a subprime lender with a very high interest rate? It is far better for you to pick up extra income with a second job (like being an UBER driver) and apply those funds to your outstanding debt. You would probably be able to pay off the cc debt in about 3 months and then could tackle acclerated payments on the car and have it paid off in another 3 months. (My SIL makes about $600/wk at Uber by only working 1-3am on Friday and Saturday nights). You can do this.

I would stay away from OneMain. It will add to your problems, not help you. JMO

Anonymous · ‎05-30-2017

If you don't need the credit cards to survive why are the balances so high? Please post what your credit limits and balances are on each card -- I wonder if paying those down will boost your scores.

As for OneMain, I wouldn't do it. There have been SOME reports by SOME users that OneMain may report as a "consumer finance loan" not a standard "personal installment loan". If you get a consumer finance loan reporting, FICO will score you LOWER.

Anonymous · ‎05-30-2017

@Anonymous wrote:
If you don't need the credit cards to survive why are the balances so high? Please post what your credit limits and balances are on each card -- I wonder if paying those down will boost your scores.

As for OneMain, I wouldn't do it. There have been SOME reports by SOME users that OneMain may report as a "consumer finance loan" not a standard "personal installment loan". If you get a consumer finance loan reporting, FICO will score you LOWER.

As I stated, I went 7 weeks without any income during a job transition. This just happened in March & April. I had to use the credit cards to survive. I can pay them off over the next few months with no problems but I was thinking that paying them off immediately and having a loan with on-time payments would be easier to refinance in a few months.

I had a loan many many years ago with American General (who became Springleaf, which became OneMain) and I had no issues at all. I paid it off early and never went back. I do know that they are a subprime lender with high APR but I clearly can't get approved for anything from a traditional lender with my current credit card balances. However, I could probably refinance the loan at a traditional lender once the CC balances are paid off. Essentially, my local bank won't take into consideration that the loan will eliminate and replace current debt instead of adding to it. So by using OneMani, who will consider that, I can then pay the debt off, satisfy the criteria of my local lender, then refinance the OneMain loan at a much lower interest rate.

My CC balance/limits are:

4000/4000

750/1200

775/800

750/800

600/1100

I have only received one paycheck at my new job which is why they are all essentially maxed out.

Also, a second job is out of the question. I work full time and I'm a single dad with full custody of a 5 year old and a 3 year old.

Anonymous · ‎05-30-2017

@Anonymous wrote:
As for OneMain, I wouldn't do it. There have been SOME reports by SOME users that OneMain may report as a "consumer finance loan" not a standard "personal installment loan". If you get a consumer finance loan reporting, FICO will score you LOWER.

I know you said SOME but I figured I'd throw my experience out there. I just logged into CCT to check. My original loan with Springleaf was just an "Installment Loan" and it was closed as refinanced. I had another loan with them for $11k that was also marked as an "Installment Loan" and is paid satisfactorly. As is my intention with this one, those were also paid off early. The first one was paid off (or refinanced in 4 months) and the 2nd one was paid off in 9 months.

Revelate · ‎05-30-2017

@Anonymous wrote:
@Anonymous wrote:
As for OneMain, I wouldn't do it. There have been SOME reports by SOME users that OneMain may report as a "consumer finance loan" not a standard "personal installment loan". If you get a consumer finance loan reporting, FICO will score you LOWER.
I know you said SOME but I figured I'd throw my experience out there. I just logged into CCT to check. My original loan with Springleaf was just an "Installment Loan" and it was closed as refinanced. I had another loan with them for $11k that was also marked as an "Installment Loan" and is paid satisfactorly. As is my intention with this one, those were also paid off early. The first one was paid off (or refinanced in 4 months) and the 2nd one was paid off in 9 months.

You'd have to look into the reason codes to know, I don't know CCT well enough but given it's backed by Experian I'd surmise you aren't getting the full ones.

Also the ones to really worry about would be EQ FICO 5 and TU FICO 4, CFA's absolutely count there and those are 2/3 of the mortgage trifecta. Not sure on FICO 8 impact which are the scores CCT uses, should have a better idea in a couple months when I'm zestfully clean except for a CFA and my installment utilization (and short credit history, nothing doing for that haha). My own CFA is on EQ but not TU and EQ FICO 5 has always been non-trivially lower (20-30 points) than TU FICO 4 and beyond that one account they're line item identical. That's a mortgage tier or more if you aren't gold plated and I'm not.

Do you have to have this car right now? Your revolving utilization is absolutely hammering your score and if you can pay it off in 2-3 months you''re going to be a prettier prospect.

Anonymous · ‎06-05-2017

A second car loan won't do much for your credit since you already have one reporting.

My advice - save up and pay cash when you are able. I say this as I'm browsing Fox body 5.0 Mustangs on eBay

Anonymous · ‎06-05-2017

With older cars getting parts can be dificult. We have been waiting for 3 months for a Jeep part. DW has a Wranger Rubicon Unlimited (Automatic) most of her repair parts come from rebuilders or salvage yards and her Jeep is not that old just not that many on the road so no one makes new parts. I have all the salvage yards and rebuilders within 1000 miles on a roledex.