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I need an auto loan, but I have a low income.

Moderator Emerita

Re: I need an auto loan, but I have a low income.


laz98 wrote:

 


LilMirth wrote:

 

So, let's take your proposed $325 for a car payment, and say... $75 for insurance (you'll want at least comprehensive no fault if you're financed, plus gap protection).


is full coverage not required everywhere?  here in texas it is required on all new vehicles.

 


Hmmmm... I suppose this probably varies by state. To drive a new car off the lot, I'd have to (at least) have comprehensive no-fault + collision. Is that the definition of "full coverage"...? Oh, and I realize now that I didn't add the "+ collision" in my original response to the OP, and I should have. I do imagine that it's required.

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Message 21 of 31
Valued Contributor

Re: I need an auto loan, but I have a low income.


LilMirth wrote:

Hmmmm... I suppose this probably varies by state. To drive a new car off the lot, I'd have to (at least) have comprehensive no-fault + collision. Is that the definition of "full coverage"...? Oh, and I realize now that I didn't add the "+ collision" in my original response to the OP, and I should have. I do imagine that it's required.


"Car insurance" can also be considered "Financial responsibility." 49 states and the DC require manadatory liability coverage of some sort for all drivers/vehicles. By some sort that means that the actual terms and amounts vary by state. In fact some states have minimums so low that the coverage provided is not enough in a serious accident.

Full coverage: collision/comp (non liability only) is usually required by the financing institution to protect their collateralized investment. Car dealerships acting as agents for the banks (which is one of the reasons why they are lumped into "financial institutions" by the Patriot Act... but I digress) check the policies as a matter of course to ensure that the interests of the bank are looked after. I cannot imagine a "new" car paid for in full and in cash to require anything but the mandated state liability coverage.

In my state if someone were to pay cash for a vehicle new or used, they would sign the disclosure that they know they have to maintain state minimums, but I am not required by the state to photocopy and verify insurance coverage.

 

The banks that finance do want a photocopy of the insuarance and proof enclosed in the deal when they receive all the contracting info. They are extending credit on the loan with the understanding that some aspect of their investment will be paid in the event of an accident.

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,
Message 22 of 31
Moderator Emeritus

Re: I need an auto loan, but I have a low income.


usmc58555 wrote:

 

So for 8 months I drove a rental car rented monthly at a cost of $600+ a month- rented with a debit card (so I had to have enough on the card to "pay" the authorization/funds hold and then each month I paid cash for the rental.


It's a great idea, actually. In one month, I blew a motor on one car and mechanically totalled our other. The repairs on both exceeded the value of the car by at least 3x. It was in our dark credit days and resorted to renting while DW and I saved cash for a new car. We paid cash at the rental place (some still let you and others it takes time to develop a relationship) and rented every week for about 8-9 months. But it was great. They got to know us and after a while we got free upgrades and if the manager was there, he'd let us pick out any car we wanted if they weren't expecting any volumes of business that week. We'd always detail the cars ourselves before we returned it and they loved us for it. One day dear MIL found out that we were renting all the time and gave us a loaner that really was a po*%#@. It broke down after a month or so after the duct tape holding it all together failed (no joke) and then we purchased. On hindsight, we didn't know about credit then, but I wish we rented some more. In fact, I bought our first car because I liked driving one of the ones we rented. Long-term test drive.

Message 23 of 31
Moderator Emeritus

Re: I need an auto loan, but I have a low income.

I called my agent just now and was told that in Texas you are only required to carry liability insurance no matter the age of the car. A lien holder might require full coverage but not the state.

 

 

 

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Message 24 of 31
Senior Contributor

Re: I need an auto loan, but I have a low income.

 


marinevietvet wrote:

I called my agent just now and was told that in Texas you are only required to carry liability insurance no matter the age of the car. A lien holder might require full coverage but not the state.


thank you MVV!  i always feel like i'm getting quite a deal for my education with you!  Smiley Wink

 

Latest scores: Walmart TU: 769. MyFICO TU: 769. DCU EQ: 755. MyFICO EQ: 780. PSECU EX: 756. MyFICO EX: 780.
Message 25 of 31
Moderator Emeritus

Re: I need an auto loan, but I have a low income.


laz98 wrote:

 


thank you MVV!  i always feel like i'm getting quite a deal for my education with you!  Smiley Wink

 


Most days here I realize how little I do know.  Smiley Happy

 

 

 

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Message 26 of 31
Established Member

Re: I need an auto loan, but I have a low income.


usmc58555 wrote:

ShinBeats wrote:

I have 1000 dollars. What do you want me to do, buy a pos 1000 car that's going to break down in 2 months? I've wasted lost of money on hoopdies, and it's time to get into something nice for once.

 

There has to be someone who will approve me.


I am sorry but there is no "right" to a car loan. I am not telling you this as someone who is looking down on you but simply stating a fact. You may need to enlist friends or relatives to help you find a cheaper car sold private party, or to cosign or to take an additional job to save more money for a purchase.

 

A buy here pay here could help you but you need to understand those options will not get you the car you choose but the one they think you can afford.

I did not have a car when I left the USMC. in fact I did not have a driver's license.

 

When I went to get my license I had to have a friend use their car as you could not test in a rental. (my friend had rented one for me)


When I went to buy a car I could not get financed by anyone as NFCU had a 1 year to eas, 1 year on new job rule for financing and my credit was "spotty" at best- I had moved across country with no references and new at a job.

 

My brother helped me "buy" a $800 POS that died day 3 and i was back to renting.

So for 8 months I drove a rental car rented monthly at a cost of $600+ a month- rented with a debit card (so I had to have enough on the card to "pay" the authorization/funds hold and then each month I paid cash for the rental.


Then one night sick of blowing twice a car payment a month, although I was clearing almost $3K a month after taxes (and spending almost 1K on car/insurance/gas),  I went online and the Special Finance department of a Dealership using CAC helped get me into a car. They chose the car for me, 70K miles, standard cab, 5 years old at I felt gouging price, I had to achieve a certain downpayment to get it, with all the essentials I had to tack on like service contract, taxes and fees  etc  and at 24.9% the payment was $334, for 4 years (what they would finance me for). And I was happy I had a car, and was saving half what i had been paying.

 

The gas tank fell off driving it home that night.

 

 The dealership provided me with a loaner as they fixed it.

 

One year at my job and just seeing if it would happen I apped online and NFCU approved me, keeping the term the same (4 years- so yes I extended the total loan by 6 months) but dropping my payment to 210 a month.

 

I understand that the poor many times pays more for services and even life needs that the better off financially do not. That they are at a disadvantage.

 

I am sorry that's a huge injustice. i do not think its fair that people who cannot keep enough in a bank to get free accounts pay a fee to cash their paychecks somewhere, or pay more for food as they are limited where/how they can shop. That by not being able to afford a washer/dryer or get theirs fixed they pay more per month to use a laundrymat. By having to purchase money orders, direct utility bill fee pays, paying for check cashing -is many times more then the monthly fee they would pay for a bank account, and even if they could get a bank account not having a car means they have to try to get transport to a bank to cash it (many employer do not offer direct deposit)- but many might accidentally overdraft then anyway and Chex Systems issues start.

 

 Thats money they could use to pay for food or doctors appointments or medicine, or to even improve their situation in life. 

 

I started cashing a guy who lived in my apartment buildings paychecks for him, each month I saved him almost $30. To  many  thats pizza money or Starbucks or how much we spend on 12 packs of Coke- to him he was able to save and afford a cellphone and have a phone for the first time in a year.

 

I pay my bills via online banking I do not pay a fee the account,  for checks or stamps.  I was in a drug store that had a fee schedule on the wall for paying bills and was like why do people do that pay a fee to pay their say electric bill unless they are close to shut off. It was explained that the fee to pay it was still cheaper then paying for both a money order and then a Stamp which combined meant that they could be paying 1.30 to pay a bill instead of just the .69. I was like OK.

 

But there is no right to credit or a loan. Sorry.


So what happened to the car whose gas tank fell off? Did it run well after it was fixed? Did you get it's history?

 

Because I am going to a KIA dealership who is the only one who will approve me[guaranteed financing] and am concerned they will give me a car that I don't get to choose among the acceptable price range?

 

Message 27 of 31
Valued Contributor

Re: I need an auto loan, but I have a low income.


ShinBeats wrote:

I have 1000 dollars. What do you want me to do, buy a pos 1000 car that's going to break down in 2 months? I've wasted lost of money on hoopdies, and it's time to get into something nice for once.

 

There has to be someone who will approve me.


I own a $700 car that's been running like a champ for six months without any mechanical problem at all. Cosmetic problems, definitely. But find an older Toyota or Honda and you might have good luck.

 

I've had several $1,000 or $2,000 cars that ran great, too. I've got a friend who's been running minivan she bought for $2,400 for 10 years with no serious problems.

 

I'm low income, also and much as I might love to have a nice, newer car (maybe a Toyota Yaris or a Honda Fit), it's not in the cards. I agree that cheap older cars CAN be a pain in the butt. It happens. So if you must have a newer-used car the thing to do is save up a good downpayment and improve your credit so when you go into a dealer you have more bargaining power.

 

Or compromise. Instead of financing a $12k car, which is going to be difficult, save your money and pay cash for a $5k car. It's not either/or $1k or $12k.

 

A buy here pay here lot might also be your friend.

Message 28 of 31
New Visitor

Re: I have low income for the RV loan I received.

I applied for an RV loan [$80,000.00] and received it due to my Credit Score, about [750.]  However, I advised the RV company that my income was $40,000 per year and I had a $900.00 Mortgage, a $300.00 auto loan, and a $200 auto loan under my name, that was my Son's [My Son pay's his loan to me, when he has the funds.]  This [MY] RV is being REPO'ed by the bank because I just can't afford the payments??  Should I have received this LOAN??  Could the RV Company "FUDGE" my numbers to the bank, to have my loan approved??  [The young RV Loan Representative,] was FIRED by the RV company shortly after my transaction was complete... and I took possesion of my new RV??  How do I find out if someting was not filed properly with the Bank?  My RV is being picked-up this day by the Repossesion Company... I can not afford the $500.00 monthly payments; I need to pay for my "NEEDS" before my "WANTS."  Thank you for your time and attention to this matter,  it is appreciated.  Sincerely,  BSch72

Message 29 of 31
Epic Contributor

Re: I need an auto loan, but I have a low income.

I don't understand. You knew you couldn't afford but you want to check rather some lied for you to get you approved?
The end result is you signed paperwork.
Message 30 of 31