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New Contributor
MyCreditSucksTheMost
Posts: 84
Registered: ‎08-13-2012

Just Need some advice.

[ Edited ]

 Ok,  so I have a low to average credit score(indicated in signature) mainly due to my lack of credit history, and excessive inquiries.

 

 So, After going on a car app spree I wanted to know how the interest rates I was offered are in comparison to my credit scores.

 

 These are for a 1year old Ford certified vehicle with low miles.(2012 Mustang gt premium $25K) Listed are the maximum amount approved for finance

 

 Road loans- $35,000 with 4,000 down payment and 12.57% interest(up to 72 months)

 

 Santander(through car max) - $29,000 with $1000 down payment and 15.95% interest(72 months)

 

 Local Bank- $30,000 with 6,000 down payment and 9.78% interest(60 months)

 

 My question is, are these rates even decent? I've never financed a vehicle only paid cash hence my lack of credit history.  Should I wait another year? I have a good working vehicle and am in no hurry especially if it means me not getting bent over.

 

 EDIT: I also make around $70K a year with a very low DTI




Staring Scores:Transunion-636 Equifax-618 Experian- 640 (8/12):
Current Scores:Transunion-717 Equifax-(?) Experian 726(as of 11/18/13):

Goal 760 Across the Board:







Mega Contributor
Creditaddict
Posts: 18,598
Registered: ‎10-23-2007

Re: Just Need some advice.


MyCreditSucksTheMost wrote:

 Ok,  so I have a low to average credit score(indicated in signature) mainly due to my lack of credit history, and excessive inquiries.

 

 So, After going on a car app spree I wanted to know how the interest rates I was offered are in comparison to my credit scores.

 

 These are for a 1year old Ford certified vehicle with low miles.(2012 Mustang gt premium $25K) Listed are the maximum amount approved for finance

 

 Road loans- $35,000 with 4,000 down payment and 12.57% interest(up to 72 months)

 

 Santander(through car max) - $29,000 with $1000 down payment and 15.95% interest(72 months)

 

 Local Bank- $30,000 with 6,000 down payment and 9.78% interest(60 months)

 

 My question is, are these rates even decent? I've never financed a vehicle only paid cash hence my lack of credit history.  Should I wait another year? I have a good working vehicle and am in no hurry especially if it means me not getting bent over.

 

 EDIT: I also make around $70K a year with a very low DTI


I think with no previous car experience these are some great rates actually.

What credit do you have? and is it lack of because of age?

Do you have any baddies or really just little credit and no auto experience?

Now if we are looking at actually moving forward although I don't consider the rate unreasonable on Capital One and the Santander you are being bent all on your own taking on a loan on a USED Car for 72 months (It usually is not even a good idea taking on a NEW car for 72 months unless it's under 2% in my mind, Cars just loose value to fast, so unless you are a keeper of wheels and buy a very long term reliable car 72 months has you barried for AT LEAST 3.5 years but I think longer.  Now $6k down is kind of a choke to me, but that might be no issue for you.

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Moderator
Revelate
Posts: 8,163
Registered: ‎12-30-2011

Re: Just Need some advice.

If you need another car now, then get one.  If not, then don't.  

 

Since you're on this forum, likely you're interested in improving your credit / fixing some bad habits from before, and as such you'll probably be more attractive later.  Sure, there's some benefits to having an auto loan on your record, I was in the same situation and had a horrific interest rate assigned to me, but it wasn't a problem to refi down later after 8 months in my case, and 6 months probably would've been fine.  But I *needed* a car, and since a car loan would only help me as well, I got one.

 

Sub-10% APR on a loan with 20% down and no prior auto loan history doesn't strike me as a poor deal at all when your base Classic scores are under 680 and what you described; however, for simply building credit history if you don't need (or arguably even want a new a car), it's a pretty expensive option for a quality tradeline.  Go take 2.5-3K and just get a secured installment loan if you're just looking for that.

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
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New Contributor
Cellice
Posts: 148
Registered: ‎07-04-2012

Re: Just Need some advice.

The dealership might be able to get you a better loan. There is no reason you should be required to put that much money down.  However, you rate is going to be high to start with. Go with the best you can get and then refinance in a few months. I've seen many people from over 15% to 4% when the refinance a few months later once they have 6 months of auto history reporting.

New Contributor
MyCreditSucksTheMost
Posts: 84
Registered: ‎08-13-2012

Re: Just Need some advice.

 Well, I've decided I'm going to sit on the idea for a week, I mainly want the car just to have something newer, and I love muscle cars. I have 30 days to decide.

 

 I'm glad that within 6-10 months the possibility of me refinancing is strong. The only downside is the local bank changed their original offer to the dealer nows it 13.73% with 6k down(geees), so I imagine I would have to go with roadloans if I decided to move forward.

 

 Is there any large costs involved in a refinance?

 

 I only have 1 derog(BOA credit card went 120 late 2 1/2 years ago, I paid it in full in january of this year, and unfortunately they updated it at that time with all 3 bureaus as a late pay:smileyindifferent:.. I've been fighting them ever since to remove it)

 

 I've also consider just financing my fiance's extra car we have just to show I have auto loan history.lol

 

 




Staring Scores:Transunion-636 Equifax-618 Experian- 640 (8/12):
Current Scores:Transunion-717 Equifax-(?) Experian 726(as of 11/18/13):

Goal 760 Across the Board:








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