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Valued Member
Heatherkins
Posts: 32
Registered: ‎08-03-2010
0

First time car buyer

Good morning!

 

I am considering getting a new car as I commute 140 miles a day.  My current car is 10 years old and is in the beginning stages of retirement. SInce I've never gone car shopping before (my dad has supplied the first two of my vehicles), I am not quite sure what the process is. I appreciate any help I can get, in advance. Thank you!

 

Here are my questions:

What do you need to bring with you to the dealer? Pay stubs? For how long?

What are good questions to ask about financing? Should I bring copies of my FICO scores with me?

Would it be advantageous for me to try to get a medical collection off my account before I try to get a new car?

What types of interest rates are normal for someone with a 679 FICO?

My father said it is not good to get a loan for more than 48 months, is this true?

 

My concerns:

My 679 scores.

The fact that this is my first auto loan.

I do not pay rent. Will not having a mortgage or rent payment hurt me? (I saw someone post something of the sort in another article)

I would like to get a new car if possible. How much does income factor into HOW much car you can afford? I make 39K a year. Is it unreasonable to get a car priced between 18K-25K?

 

Thanks so much!

 

Valued Member
Heatherkins
Posts: 32
Registered: ‎08-03-2010
0

Re: First time car buyer

Oh, I forgot one more concern....

 

I just switched jobs. I have been employed as a teacher for 4 years and just switched to a new school district. Will this change affect whether or not I get approval?

 

 

Valued Contributor
usmc58555
Posts: 1,673
Registered: ‎02-18-2009
0

Re: First time car buyer


Heatherkins wrote:

Good morning!

 

I am considering getting a new car as I commute 140 miles a day.  My current car is 10 years old and is in the beginning stages of retirement. SInce I've never gone car shopping before (my dad has supplied the first two of my vehicles), I am not quite sure what the process is. I appreciate any help I can get, in advance. Thank you!

 

Here are my questions:

What do you need to bring with you to the dealer? Pay stubs? For how long? last few pay periods

What are good questions to ask about financing? Should I bring copies of my FICO scores with me?  Work through your credit union or bank to get a pre approval for amount, term, and rate, then see if the dealership can beat that.

Would it be advantageous for me to try to get a medical collection off my account before I try to get a new car? Yes

What types of interest rates are normal for someone with a 679 FICO? It all depends on the supplemental information. Assuming you have a reasonable down payment and nothing negative on your report you should quaklify for near best rates.

My father said it is not good to get a loan for more than 48 months, is this true? Yes and No. Prior to the end of the 1980s the typical car loan required 25% of the transaction down and was over a typical 48 month term. With rising car prices, a change in car ownership philosophy where most cars are in two+ car households, that thinking chaged to a more lenient 60 month and even 72 month time frame. Taking a car out that long means that it will depreciate faster, your payment will be cheaper, and you are taking the loan for a longer time which means it will not be paid off as fast. In general I would take the loan for the shortest time you can afford, without creating an onerous monthly payment.  (the longer you contract for, the higher the minimum interest rate you will be assessed as well.)

 

My concerns:

My 679 scores.

The fact that this is my first auto loan. ehh  not too much a problem if you bring a downpayment.

I do not pay rent. Will not having a mortgage or rent payment hurt me? (I saw someone post something of the sort in another article) Possibly/probably. how do you live? Cardboard box?

I would like to get a new car if possible. How much does income factor into HOW much car you can afford? A lot. I make 39K a year But what are your expenses?. Is it unreasonable to get a car priced between 18K-25K? a general rule of thumb is every $1000 finance over 60 months is roughly $20 a month in payment.

 

One: if you are commuting 140 miles a day, I would consider a used 1-2 year old car, still having manufacturer warranty and buying extended manufacturer warranty, or if a new car, fuel efficient and that you extend the manufacturer warranty with. The depreciation and the mileage itself is going to kill any resale value, value of your car.

 

Two: What kind of downpayment?

 

 

Thanks so much!

 


 

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Valued Member
Heatherkins
Posts: 32
Registered: ‎08-03-2010
0

Re: First time car buyer

Heatherkins wrote:

Good morning!

 

I am considering getting a new car as I commute 140 miles a day.  My current car is 10 years old and is in the beginning stages of retirement. SInce I've never gone car shopping before (my dad has supplied the first two of my vehicles), I am not quite sure what the process is. I appreciate any help I can get, in advance. Thank you!

 

Here are my questions:

What do you need to bring with you to the dealer? Pay stubs? For how long? last few pay periods

What are good questions to ask about financing? Should I bring copies of my FICO scores with me?  Work through your credit union or bank to get a pre approval for amount, term, and rate, then see if the dealership can beat that.

Would it be advantageous for me to try to get a medical collection off my account before I try to get a new car? Yes

What types of interest rates are normal for someone with a 679 FICO? It all depends on the supplemental information. Assuming you have a reasonable down payment and nothing negative on your report you should quaklify for near best rates.

My father said it is not good to get a loan for more than 48 months, is this true? Yes and No. Prior to the end of the 1980s the typical car loan required 25% of the transaction down and was over a typical 48 month term. With rising car prices, a change in car ownership philosophy where most cars are in two+ car households, that thinking chaged to a more lenient 60 month and even 72 month time frame. Taking a car out that long means that it will depreciate faster, your payment will be cheaper, and you are taking the loan for a longer time which means it will not be paid off as fast. In general I would take the loan for the shortest time you can afford, without creating an onerous monthly payment.  (the longer you contract for, the higher the minimum interest rate you will be assessed as well.)

 

My concerns:

My 679 scores.

The fact that this is my first auto loan. ehh  not too much a problem if you bring a downpayment.

I do not pay rent. Will not having a mortgage or rent payment hurt me? (I saw someone post something of the sort in another article) Possibly/probably. how do you live? Cardboard box? I live with my boyfriend's family. His father is sick and he takes care of him and we're trying to save for a home.

I would like to get a new car if possible. How much does income factor into HOW much car you can afford? A lot. I make 39K a year But what are your expenses?. I have $350 in student loans per month and 1 credit card that is at 25% utilization 5500 credit limit. Otherwise...just groceries and basic living expenses. 

 

Is it unreasonable to get a car priced between 18K-25K? a general rule of thumb is every $1000 finance over 60 months is roughly $20 a month in payment.

 

One: if you are commuting 140 miles a day, I would consider a used 1-2 year old car, still having manufacturer warranty and buying extended manufacturer warranty, or if a new car, fuel efficient and that you extend the manufacturer warranty with. The depreciation and the mileage itself is going to kill any resale value, value of your car.

 

Two: What kind of downpayment? I was thinking 2-3K.

 

How about my new job switch? Will that hurt if it is from one school district to another and I've been employed continously in the same field since 2007?

 

Thanks for your help :smileyhappy:

 

 

Thanks so much!



Valued Contributor
ptr2593
Posts: 1,486
Registered: ‎08-14-2011
0

Re: First time car buyer

I've never bought a car, but I do know that a lot of dealerships have online specials.  When my parents bought me my car a few years ago, they looked at the inventory of various nearby dealerships online and started the purchasing process from there.

 

I know actually looking at cars is probably furthest from your mind right now (as it should be, it's good to get all your ducks in a row before showing up at the dealershiop) but definitely look into it before you start negotiating.

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Valued Contributor
usmc58555
Posts: 1,673
Registered: ‎02-18-2009
0

Re: First time car buyer

[ Edited ]

1-Regarding not having rent or mortgage:

 

Adults pay rent or have mortgages. Adults buy cars. If you do not have a rent payment or a mortgage obligation for 99% of the United States you are living on the largesse and at the pleasure of another, And that can change at any time. the minute they give you the loan the place you are living in can be foreclosed on or, your the people can decide to move or go to BoraBora leaving you on the street. This red flags your application and yes, not having rent or mortgage can actually hinder a car purchase more then help it.

So it is always best to include a realistic amount of rent in your application, and you are not living for free you are contributing to the household for your place to stay so in all actuality you probably do "pay" about 300+ a month in contributions. (I lived with my brother and his family for free after leaving the USMC. We got into an argument about it and he threw that fact that I was living rent free in my face. "Rent free" I said, I spend $100 a week on groceries that I do not eat I get text messages with shopping lists all the time from (name hidden to protect the bovine) asking me to pick stuff up on my way home from work. My brother suddenly was like well, umm, ok. I didn't know that.)

 

2- If you are living rent free, really you only have $2,000 or $3,000 to put down. That's kinda low in my eyes. Thats barely tax title and fees for a car of that amount. Not sure what you are saving money for or what you have been spending it on, but I think you should from this point forward look try to get as much out of your current car as you can and save up a larger DP. $4K-$5K on a $18,000-$$20,000. More money down ensures financing, lower interest rate and allows you to, if you want,  go and take a loan for 48 months with a payment that without the money down you may have only been able to afford at 60 or 72 months.

 

Methinks your basic living expenses could be cut/budgeted to save a little more.

 

3-The job change is a probable non issue. Professional job with a contract, no long term unbroken length of unemployment-you will be fine.

 

Signature line begins:
Credit is not a right, but a business transaction, one that takes into account risk, and charges accordingly based on that risk.
Your credit score is an aspect of your credit profile. Important? yes but just an aspect. Contributing/supplemental information determines the finer point of the deal. Ask any question, respect me not to get mad if the answer is not the affirmation you are looking for,
Valued Member
Heatherkins
Posts: 32
Registered: ‎08-03-2010
0

Re: First time car buyer

1-Regarding not having rent or mortgage:

 

Adults pay rent or have mortgages. Adults buy cars. If you do not have a rent payment or a mortgage obligation for 99% of the United States you are living on the largesse and at the pleasure of another, And that can change at any time. the minute they give you the loan the place you are living in can be foreclosed on or, your the people can decide to move or go to BoraBora leaving you on the street. This red flags your application and yes, not having rent or mortgage can actually hinder a car purchase more then help it.

So it is always best to include a realistic amount of rent in your application, and you are not living for free you are contributing to the household for your place to stay so in all actuality you probably do "pay" about 300+ a month in contributions. (I lived with my brother and his family for free after leaving the USMC. We got into an argument about it and he threw that fact that I was living rent free in my face. "Rent free" I said, I spend $100 a week on groceries that I do not eat I get text messages with shopping lists all the time from (name hidden to protect the bovine) asking me to pick stuff up on my way home from work. My brother suddenly was like well, umm, ok. I didn't know that.)

 

Sure then I pay probably $400 or so a month in grocery expenses.

 

2- If you are living rent free, really you only have $2,000 or $3,000 to put down. That's kinda low in my eyes. Thats barely tax title and fees for a car of that amount. Not sure what you are saving money for or what you have been spending it on, but I think you should from this point forward look try to get as much out of your current car as you can and save up a larger DP. $4K-$5K on a $18,000-$$20,000. More money down ensures financing, lower interest rate and allows you to, if you want,  go and take a loan for 48 months with a payment that without the money down you may have only been able to afford at 60 or 72 months.

 

Methinks your basic living expenses could be cut/budgeted to save a little more. I have significantly more in the bank. However, I am trying to save for a house too, as I mentioned in my previous posting.

 

3-The job change is a probable non issue. Professional job with a contract, no long term unbroken length of unemployment-you will be fine.

 

Thanks for the advice.



Contributor
incognitony
Posts: 95
Registered: ‎06-19-2011
0

Re: First time car buyer

I would just see what the dealship wants for a down payment  , I just paid 1200 down a new car in August and 0 down on a used with similar income ,credit score and job time as you. Interest rates were in the 7-8 range. 

Valued Contributor
usmc58555
Posts: 1,673
Registered: ‎02-18-2009
0

Re: First time car buyer

[ Edited ]

Heatherkins wrote:

1-Regarding not having rent or mortgage:

 

Adults pay rent or have mortgages. Adults buy cars. If you do not have a rent payment or a mortgage obligation for 99% of the United States you are living on the largesse and at the pleasure of another, And that can change at any time. the minute they give you the loan the place you are living in can be foreclosed on or, your the people can decide to move or go to BoraBora leaving you on the street. This red flags your application and yes, not having rent or mortgage can actually hinder a car purchase more then help it.

So it is always best to include a realistic amount of rent in your application, and you are not living for free you are contributing to the household for your place to stay so in all actuality you probably do "pay" about 300+ a month in contributions. (I lived with my brother and his family for free after leaving the USMC. We got into an argument about it and he threw that fact that I was living rent free in my face. "Rent free" I said, I spend $100 a week on groceries that I do not eat I get text messages with shopping lists all the time from (name hidden to protect the bovine) asking me to pick stuff up on my way home from work. My brother suddenly was like well, umm, ok. I didn't know that.)

 

Sure then I pay probably $400 or so a month in grocery expenses.

 

Include that then, and not as a 'wink wink" but aas hard dollars. You contribute XXX a month to the household to live there its as good as rent.

 

2- If you are living rent free, really you only have $2,000 or $3,000 to put down. That's kinda low in my eyes. Thats barely tax title and fees for a car of that amount. Not sure what you are saving money for or what you have been spending it on, but I think you should from this point forward look try to get as much out of your current car as you can and save up a larger DP. $4K-$5K on a $18,000-$$20,000. More money down ensures financing, lower interest rate and allows you to, if you want,  go and take a loan for 48 months with a payment that without the money down you may have only been able to afford at 60 or 72 months.

 

Methinks your basic living expenses could be cut/budgeted to save a little more. I have significantly more in the bank. However, I am trying to save for a house too, as I mentioned in my previous posting.

 

I was bringing up a fact more then anything else. Outside of a House, a Car is the second most expensive thing most Americans will ever buy. You can probably get financing with nothing down, as well as $12,000 down, your payment will of course be reflective. Now add the fact that you are putting 35,000 to 40,000 miles a year on the car due to your commute (which is high), and I think it would be best to make decisons based on the fact that you need fuel efficiency, durability, and ease of repairs (Diesel?) since whatever you buy you are going to need to have the mindset of keeping it till it falls apart since you are Using it up. The costs of your commute in Gas and vehicle wear and tear must be considered.

 

Factually $2,000 -$3,000 is a minimum and small amount to put down- and it will generate a 350+ a month payment over 5 years.

 

if there is room in your current savings schedule to save and acquire more of a down payment I would- as you are planning for two large purchases, car and house.

 

3-The job change is a probable non issue. Professional job with a contract, no long term unbroken length of unemployment-you will be fine.

 

Thanks for the advice.




 

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Your credit score is an aspect of your credit profile. Important? yes but just an aspect. Contributing/supplemental information determines the finer point of the deal. Ask any question, respect me not to get mad if the answer is not the affirmation you are looking for,

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