I plan on being in the market for a new car soon and want auto loan advice. First timer!

[Anonymous]

I plan on being in the market for a new automobile soon (about mid-February to mid-March).  Right now, I am going to do my taxes soon and expect a small refund.  In addition, I will get my job evaluation soon and hope that my pay will remain the same (or receive a raise).  My current car is a 2003 Ford Taurus SES with 121,000 miles on it.  The engine and transmission are bullet proof, but the paint is bad on the bumpers (scrapes and peeling).  The driver's rear door, as well as window would not open.  It is not worth it at this point to repair it.  I also desire to drive a sportier car and start off the new decade in a new car.  Here is the scenario:

- I am 32 years old with a job in customer service making $24,000 a year.  I take home approximately 80% of that.

- I live with my family and thus, I do not pay rent or utilities (except cell phone).

- I plan to make a 20 to 25 percent down payment

- I am in the market for a compact car in the $16,500 to $19,000 range 

- I never had an auto loan before.  

- My credit score is generally in the 780-800 range.

- Right now, I have two credit cards and one purchasing card reporting on my credit report.  I will give you basic detail on it

    -My father has authorized me on one of his credit cards in 1994 and he closed the account about six to eight months ago. 

    -I have a purchasing card with Tires Plus that I opened in the summer of 2005 that I do not use. 

    -I have a Bank of America World Points Visa with a $5000 credit limit with a zero balance. 

    -Finally, I have a FIA Fidelity Rewards American Express card with a $2500 credit limit with a $550 balance, but will pay most of it off 

    -I do not accrue interest on any of those cards

- I also have a BJ's Visa card (from Barclay) and it is a business card.  It does not get reported to the credit bureaus and has a zero balance on it.

I have a banking relationship with BB&T and Bank of America.  When the time is right, I will see a loan officer from those banks to see if they have a first time buyer's (or borrower's) program.  I might think of joining the University Credit Union with Florida International University, since I graduated from there.  I do not want to go through the trouble, however.  I also might be thinking of Lending Tree, as well.  My worry is all in inquiries on the credit report.  I know that all the inquiries will count as one, but I do not believe anybody when that say that. 

Not to be off topic, but what would be the best way to negotiate for the price for a new car?  I plan on getting in touch with all the competing dealers (by email) and will ask for the invoice minus the rebates and no dealer's fees.  Naturally, I want to get as much car for as little money as possible.

I hope I was detailed in my explanation.  If you have any questions, please post back.

I would like to thank you for reading my post and offering advice.     

Message Edited by danyall2010 on 01-21-2010 08:43 PM

[Anonymous]

I would recommend a Honda dealership going through Honda Financing.  That's where I was able to purchase my car from, I'll give you the details:

The car I picked up was a 2008 Honda Civic SI.  The MSRP $23,500 + Extended Warrenty + Taxes + Talk Down = $25,124 total.  I put $1,000 down so a total financed price of $24,128.  At the time my salary was $40,000.  I had a credit score of roughly 630-640 (April 2008). 

You mentioned your credit score is generally 780-800, I would spend the $10 on this site and get an accurate score just to confirm.  But with my numbers and salary, it would put your financing at roughly $14,500 for a car.  It's possible they may slide that up to $16,000 or so if you were interested in one of the lower-level Civics, but it would still be brand new.

[Anonymous]

Thank you Cyan007!  I checked my credit score on this site back on 1/5/10.  My scores are 797 from Trans Union and 798 from Equifax.  I could not get the scores from Experian because they did not offer that option.  My Bank of America Privacy Guard will automatically send me updated scores about the end of January.  I will see what it will be. 

By the way, I am the same person as Danyall2010.  What happened was that I made a mistake when I registered a few days ago.  I did not realize that I could use the same username as I did when I logged in to My Purchases. 

Message Edited by danyall2003 on 01-23-2010 03:16 PM

[Anonymous]

Go to the library and read a book about buying cars.  You're buying new.  DON'T DEAL WITH A SALESPERSON.  You'll have to buy the car and pay that commission.  

For that budget, buy a VW Golf.  They are fantastic cars and they hold their value better than any other make.  The car seems like a more expensive car than it is.  

The downpayment is great.  Do you have any savings in case you lose your job?  Don't throw all of your savings in a downpayment. 

[Anonymous]

I do have savings.  I am planning this very carefully. 

[Anonymous]

I have another question to ask.  I have noticed a number of applications request that I provide personal references. I do feel very uncomfortable with disclosing that info.  I have the gut feeling they are going to be sales calls and I will end up losing friends.  Are there any banks/companies that do not ask for personal references? 

[Anonymous]

I would just decline to provide any... if that's a problem tell them you'll go to the dealership down the street that sells the same cars.