12-21-2012 07:37 AM - edited 12-21-2012 07:38 AM
So I have been looking around but do not know where or how to start.
I was wondering if a bank or lender would offer an auto loan for a used car (not trying to push my luck with a new one) with my 12,000 a year income, a co-signer (mother) and a downpayment from anywhere between 7-12 thousand.
I want to take a loan out but have no "income" on paper except for a VA disability check I receive of 1009 per month. I am a full time student and get paid a sizeable amount for some one like me through the GI Bill but the cost of living in NYC takes its fair share every month. (Not sure if I should post specific figures)
I initally had 11000 in savings but Hurricane Sandy easily took ~4000 grand in one shot.
In Feb. a CD I have matures and will immediately cash out for a little more than 5000 that will go towards my savings for a car.
Do you think it is feasible? I was thinking of maintaining my savings and just buying a used car cash, but after some number crunching I think I would be better off with a loan and paying it off as quickly as possible.
Any options out there? Or should I join the savings garden?
12-21-2012 08:45 AM
12-21-2012 09:57 AM - edited 12-21-2012 09:57 AM
My personal opinion: I'd take a loan.
You're sitting with 7K in the bank; I wouldn't want to spend that all in a shot to buy a used car as that literally would be depleting your emergency reserve.
I don't know your credit profile, but money is cheap these days; however, cash reserves are not. You've stated you're a student currently, so there's a good chance your income will increase when you enter the work force. As a result, I think from a personal finance perspective savings matters more to you right now, so I'd take a loan that you can afford and keep more of your cash reserve intact. If you can put down 20% you'll be fine, and 30% you're absolutely golden... and that shouldn't be a problem if you're buying a cheap used car.
To say nothing that financing a car is a good thing on one's credit reports anyway... especially when it comes to buying a car somewhere down the road when you have more income and are potentially seeking a larger loan.
That all said, what do you need a car for in NYC anyway?
12-21-2012 12:45 PM
Double agree! I would not deplete your emergency fund for a car--you may find yourself needing some extra cash and not having any. Check into financing options for fixed incomes. There are some out there. Some banks will work with you. Don't tell them how much money you have b/c they will try to get you to put everything in your savings down.
12-21-2012 01:06 PM
12-21-2012 02:27 PM
Wow! Thank you for the input ladies and gents. I am mostly leaning towards the car out of personal convenience than anything else (my dog is getting bigger!)
To make things clear, the savings I am talking about is what I have set aside for a car or some large purchase. I have a separate account for rainy days or broken bones and some CDs from years back when 5% was THE number – few months away from maturity.
I easily save over 1000 a month; I know I am fortunate for having this option in this day in age. I don’t know my credit profile yet, I successfully sent a GW letter to Chase for a late payment while I was oversees and I was given a green light and a warm-hearted letter from them so I am waiting a few months to see if this has any affect.
I made this post to see if anyone else has had any luck with this type of situation, and I am not talking about the satanic NINJA loans. I like to think myself as conservative but this is one area I am not sure about. I have been told of people getting mortgages with a fixed income like mine at reasonable rates (VA Home loan) and thought maybe there was something like that for Autos. I am not pulling the trigger anytime soon but I am definitely going to do my research and keep crunching numbers. At this point, I think holding onto my cash is best and if I have too, buy a beater – I dress like one, so why not. I am hoping my POS internships will amount to something eventually.
I will shop around and explain my situation to banks and see if I find anything reasonable on paper.
12-21-2012 02:58 PM
Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.† Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
* For complete information, see the terms and conditions on the credit card issuer’s website. Once you click apply for this card, you will be directed to the issuer’s website where you may review the terms and conditions of the card before applying. While myFICO always strives to present the most accurate information, we show a summary to help you choose a product, not the full legal terms - and before applying you should understand the full terms of products as stated by the issuer itself.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.