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First time buyer Auto Finance companies

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Bweston
New Visitor

First time buyer Auto Finance companies

Hello everyone!
Im currently in the market for a vehicle. My job requires me to have one. Im an Supported Living Assistant and I help disabled clients become more dependent on a day to day basis. I currently just want something affordable and wont cause me problems. BHPH just seems like a waste because they dont help me build credit. Below are the specs about my situation!

Credit Scores: TU 597 EQ 556 EX 551
1 Credit card: 1 year history, always paid on time. 500 limit (currently has a high balance due to school expenses awhile ago)

2 Collections: currently being investigated because I'm only 20 and it stated those accounts (Sprint and Charter) were open when I was 16.

Inquires: i have a total of about 36 inquires due to me being very eager at 18 and wanting some kind of credit. They should drop off my report this year.

Income: I work full-time. Gross monthly income is 1,604. I did receive grant, Pell, and student loan money that totals 6727. Idk if I can use that as income or not.
Im also a student (Mizzou)
I dont pay rent or have any other expenses besides credit card.

I really want to know what auto finance companies to look into or what interest rate I could possible get as an average!

Thanks again for your responses!
Message 1 of 10
9 REPLIES 9
Remember0
Valued Contributor

Re: First time buyer Auto Finance companies

Regarding the income, it'd probably be tough. But since you're above 1500 without it, I don't think you'll have an issue. You could always exclude it if they ask for verification and still be fine. You will need a good story on why no rent though. I might even put down whatever your utilities/phone bill is for rent (aka a little over $100) to maybe avoid that line of issues and avoid them imputing like 500.

 

Those inquiries aren't hurting you any for FICO as they are >1 yr old.

 

The big question I have is why are your FICOs so low? What's your utilization like on your credit cards?

 

The reason I ask is with that sort of credit profile (mainly those FICOs), you will get finance so BHPH is a waste. BUT it'll get picked up by someone like Cap One or Santander at 15%+ APR.

Message 2 of 10
Bweston
New Visitor

Re: First time buyer Auto Finance companies

Thanks for commenting! My utilization is pretty high at about 88%, very close to limit. I believe thats whats really dragging my score! I only have that one credit card. I dont pay rent because my parents and some of my student loan money goes to rent installments. The price of rent is 549/month but I dont pay it with my wages. Is Santander Roadloans? Cap one denied me when I tried applying online! Would it be best to try at a dealership? I was surprised Cap one denied me because my mother had a credit score of 525 and got approved for 16k car through them but her income is 60k so that may be why. Thanks again for you input
Message 3 of 10
Remember0
Valued Contributor

Re: First time buyer Auto Finance companies

How much car do you want to buy in the first place (dollar amount)? Any baddies other than high utilization? Also are you looking to buy used/new and at a dealership or carmax?

 

I think at this point, there would be great returns (ie significantly lower APR) to working on reducing utilization. What's the balance on that card and can you pay it down so that you're at <50% util? Ideally it'll get under 20 or 30% util as reported to credit bureaus before you try to get an auto loan.

 

With such a thin file, and that FICO this is going to be tough. I'm pretty sure RoadLoans will approve, but the APR is going to be nasty. I think it'll GREATLY help if you can work on your util...

Message 4 of 10
StartingOver10
Moderator Emerita

Re: First time buyer Auto Finance companies

I think the OP ought to be very, very cautious.

 

You have a $500 limit card that is maxed out. Your car payment + insurance (given your age) is likely to be very close to $400/mth depending upon the value financed and the rate which will be extremely high even if you can get financed. It is very likely the lender will be a subprime lender with bad terms and a high rate (Roadloans or Santander or WFDS).

 

Since you have had a difficult time paying down this card to zero each month before the reporting date, even though you have no expenses living at home, it would be unwise to pick up an installment loan at this time. Why don't you get a beater for cash until you can get your finances in order?  It might not take long. Is there anyway you can pick up additional income to help? I am mentioning this because your income is $1600/mth and you have no expenses, yet you are carrying credit card balances. Take a look at your budget to see where all the money is going. JMHO.

 

OP: don't put youself in a bind by taking on a installment loan that is very likely to end up in a repo. You can make great strides in a short time if you put your mind to it. Read some of the posts by others that started where you are now. Sometimes it is an income problem that is the true issue and I think that is where you are right now.

Message 5 of 10
Remember0
Valued Contributor

Re: First time buyer Auto Finance companies

Haha wow, sometimes I feel like an idiot. Smiley Tongue Completely missed that the card's limit was $500 from the original post.

 

I agree 100% with StartingOver. And due to age, don't forget how expensive full insurance on a car will probably be. I'm guessing at least $100/month...my state would be at least $200/month for a 20 year old for a new car. I'd know because I'm 20 and once got a quote for 4k/year lol. Didn't go with them though, obviously.

 

Also OP, after that util comes down, look at getting maybe one or two more cards. Having 2-3 cards is with good history helps FICO over the long term (and with mortgages, auto loans, etc...).

Message 6 of 10
Rkalynsmith
Regular Contributor

Re: First time buyer Auto Finance companies

Roadloans won't touch you. You need to be making a min $1800 a month. Get you a beater with a heater until you get those scores up!


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Message 7 of 10
Remember0
Valued Contributor

Re: First time buyer Auto Finance companies

What's your source for that 1800 figure? I've seen Santander Consumer USA and drive approvals for 1200 a month gross income. Perhaps Roadloans is higher, but if it were higher than 1500 a month, I'd be surrised.

I do agree that while the OP would most likely approved through a place like Roadloans or drive of he went to Carmax, it'll be much better if he waits till that card is paid off and reports under 50 (ideally under 10) percent util to the credit bureaus.
Message 8 of 10
Revelate
Moderator Emeritus

Re: First time buyer Auto Finance companies


@Remember0 wrote:
What's your source for that 1800 figure? I've seen Santander Consumer USA and drive approvals for 1200 a month gross income. Perhaps Roadloans is higher, but if it were higher than 1500 a month, I'd be surrised.

I do agree that while the OP would most likely approved through a place like Roadloans or drive of he went to Carmax, it'll be much better if he waits till that card is paid off and reports under 50 (ideally under 10) percent util to the credit bureaus.

Isn't Santander Consumer USA their dealer financing arm?

 

Different underwriting criteria vis a vis Wells Fargo and Wells Fargo Dealer Services potentially if that's the case; also while I know Roadloans is Santander I don't know how that structure is organized, and if it's not a simple rebranding it may be different too.  I think Toyota and Lexus financing might have been different even but I know first-hand that TFS/LFS were one and the same company.




        
Message 9 of 10
Remember0
Valued Contributor

Re: First time buyer Auto Finance companies

Yep, Santander Consumer USA and drive are both Santander Consumer's dealer arms.

 

I know other lenders can often differ with their dealer and consumer facing arms (WFDS and WF for example). But drive and SC USA pretty much use the same criteria for income and DTI. Granted they are both dealer facing and have the same parent (SC), but knowing what I know about Santander, I have the strong suspicion that Roadloans would not use a vastly different figure (1.5k/month maybe, but 1.8k is hard for me to believe). SC USA seems to treat these loans as the same at least in their publicly filed SEC documentation and makes no notes on differences in quality between them.

 

Not ruling it out that Roadloans needs 1.8k/month, it's very possible, but I always thought that SC was more uniform in its approval standards across the three subsidiaries based on approvals I've seen and their SEC docs. Hence why I asked if there was a source for the 1.8k figure...

Message 10 of 10
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