First time car buyer, need advice!

Anonymous · ‎12-14-2008

Hello everyone. I'm getting very close to financing my first car. I have owned 2 cash cars and I have never financed. Im 21 years old and I still live at home, I'm currently take home 1800 dollars a month after taxes and my credit scores are

TransUnion - 727

Equifax - 711

Experian - 740

Im wanting to buy a car in the price range of 22-25k dollars. The car im looking to purchase is the Subaru WRX STi

I went to a dealership and I asked them if they could finance me a car for that much, I was told the most I can get financed at most dealerships is only 15k dollars because of my age and also because I have never owned a car before.

I have 5,000 dollars to use as a down payment, so really I am looking to finance about 18k dollars. Is this possible with my credit scores? I have only used 3 credit cards and I have had credit for about 2 years.

Any advice is appreciated. Thank you!

Anonymous · ‎12-15-2008

I would guess that if you are declined, it won't be because of your scores. They are in nice shape for having a short credit history. That said, they might be worried your credit history length. Have you been at the same job for awhile? That would help. If nothing else, wait a few months and sock away the extra cash to get down to $15k. Shouldn't take long if you are living at home. With tax season around the corner maybe you could also apply any refund..

Keep up the good credit habits.

Anonymous · ‎12-15-2008

Thanks for the reply! I have been at my job for 6 months already. I think if I get denied I will have no choice but to save until I can get down to 15k to finance. Tomorrow I will be going to carmax to see what kind of financing options I can get.

Does anyone else have advice as to what I should do?

Thanks again!

SCF · ‎12-15-2008

If you can't get the terms you want from the dealership, you might try a local CU or bank. Start with whoever you have your checking/savings accounts with and expand your search out from there. FICO reads all the inquiries for an auto loan in a short period (I think 14 days?) as one inquiry, so you aren't penalized for shopping around.

I've also heard great things about Penfed (Pentagon Federal Credit Union) on these forums, and they seem to have very competitive rates for auto loans online, so you could look into them as well.

Good luck!

Anonymous · ‎12-16-2008

@Anonymous wrote:
Thanks for the reply! I have been at my job for 6 months already. I think if I get denied I will have no choice but to save until I can get down to 15k to finance. Tomorrow I will be going to carmax to see what kind of financing options I can get.

Does anyone else have advice as to what I should do?

Thanks again!

If your not in a huge hurry sock the money away for a dp if your in a position where you have to get a vehicle then check your local credit union first. Speak to a Loan Officer...tell then your current scores, your job history & income... this will cost you no points since they won't do a hard pull until you apply and about 5 minutes of your time. Then talk to dealership...again with your scores no pulling until you get a general idea of a rate and if they can't beat the CU rate then you know what you need to do. Good Luck!

Anonymous · ‎12-16-2008

I went to the local Capital One branch by my house. I talked to a banker about applying for an auto loan, I told them my scores were over 700 and that ive had only 3 credit cards in the past and other details. I was told I can get approved for 16-20k at around 6% interest. I'm not sure how accurate the guy was, but I'll have to talk to some more loan officers.

Thanks for the helpful advice!

Anonymous · ‎12-18-2008

6% apr for your first car is a great deal. I am the same age as you and I got approved at 10.9% through Ford. My scores are a lot lower then yours as I have a single credit card charge off but you would still be in the 6 range with ford as well. You can always shop around but I doubt it just because of the short credit history and being that you are a first time buyer. Believe it or not, I have a lot of friends that are older then me and are yet to get their first credit card.

Message Edited by dvroberts81 on 12-18-2008 06:56 AM

Anonymous · ‎12-18-2008

Thanks for the info dvroberts81, I have a few questions for you though.

How much did you finance through ford credit? For how long and also did you have a co-signer? Did they have a minimum monthly income requirement?

Thanks again!

Anonymous · ‎12-18-2008

Sure, I financed 16.5k after taxes and everything. Loan was for 60 months. I had NO co-sighner but I put down 3k in cash. I dont think they have a minimum income but mine was 36k. Expect to bring pay stubs to proof employment but they never verified mine. Based on your situation, demad the 6.9% APR, dont settle for more.

Anonymous · ‎12-18-2008

Forgot to add, if your income is not high enough, get a temporary second job for a few months to prove the extra income and you shouldnt have any trouble. dont forget that you can always refinance for better terms. I am thinking about refinancing with USAA or Navy Federal but even their best rate is 5.25%.

Message Edited by dvroberts81 on 12-18-2008 08:12 PM

Message Edited by dvroberts81 on 12-19-2008 12:11 PM