12-07-2012 11:16 AM
Hello, any feedback is greatly appreciated
I applied for my very fist auto loan with no cosigner in August 2012 for $24k and put down $10k ($32K total) @ 3.4% Rate.. Made my 1st payment in October
Now im hoping to get a second vehicle around March for about $40k and putting down $30k leaving me with around $10k to finance.
My credit score was 720 when i applied in August and i have yet to miss any payments so i expect my score to improve a bit by March. So my question is, should March be a long enough wait to apply for a second loan? Or is that too soon and wait a year or so?
My Income is about $45k yearly.... DTC of 9%
12-07-2012 01:07 PM
If you have $30k to put down, why not just pay off the first one before buying another one and having 2 car payments? $45k a year in income and a current new car loan seems like it would make it very hard to get another loan, but I may be wrong.
12-07-2012 01:22 PM
Well i thought about that, and the reason why i got the first auto loan was to help raise my credit score for when im ready to buy a house ina couple of years. I have no previous loans in my history.... just credit cards.
Im going to be selling a car i never drive anymore and hoping to get about $25k, which i will then use as a downpayment along with $5k i have saved up.
I could easily pay off the 1st loan with the $25k but then wouldnt have much to put down for a second loan for the car im looking to get.
12-07-2012 04:06 PM - edited 12-07-2012 04:08 PM
I may be wrong here, but paying off the first car loan in full makes more sense to me as long as there are no prepayment penalties. You will have a paid satisfactorily auto loan, one completely positive tradeline w/ no chance of derogs, no chance of repo on one vehicle, only one auto payment to worry about, no outstanding auto loan debt hurting your DTI, and your co-signer will be in the clear on first loan. With one closed positive auto loan and 720+ scores, you might not even need a co-signer on the next loan.
12-07-2012 05:48 PM
I see no reason to pay interest for 2 auto loans when you can pay one off. I also see no reason to buy 2 (assuming) new cars so close to eachother. Since it seems you have already made the decision to buy the car I advice: pay off the first loan (a satisfactory auto loan might make you more attractive on next purchase) and wait until you have $10K (or more) down for the next car (you can also save more for down payment and wait for a good offer such as 0% financing or 1-2%
12-07-2012 06:14 PM
Relax, take a deep breath; I think you are rushing into things to much. Rushing and over indulging can lead to bad credit and money problems.
12-07-2012 10:21 PM
As someone who really wishes he'd done things differently in the last 48 years, you are getting some good advice here. Pay off the first loan...don't take the chance of a repo, which is where you're heading, whether you agree or not.
12-12-2012 10:41 AM - edited 12-12-2012 11:39 AM
100% agree with the others.
Besides, having two car loans may actually knock out the possibility of getting a mortgage. Remember the DTI on a mortgage includes all of your debt on the back end. Having the first car loan paid off is a positive factor toward your future mortgage.
12-17-2012 07:32 AM
Getting a bank to approve a car loan when you already have one is tough. Unless you have history showing you can handle it.
I got a second car loan last year but the bank required that my Wife also be on the loan to do it.
Be careful with new cars, it was buying new cars that got me in my credit problems.
12-18-2012 06:47 AM
If you have 30k as a down payment...it'd be silly to finance. If a dealer saw a person walk in with 30k cash for a car...I'd think the dealer would be willing to deal. Anyway I agree with the others...why do you need two car loans? Pay off the first one. Having two auto loans is definitely going to knock out any chances of you getting a auto loan anytme soon.
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