07-24-2012 09:41 AM - edited 07-24-2012 11:14 AM
Hello, Iv'e been a long time lurker to this forum and have read through many helpful topics and finally decided to sign up.
Im hoping to buy a 07/08 Cadillac Escalade in a couple of months and want to see if my chances are good to get a loan. Im 24 years old, have 2 credit cards with a total limit of $1,475 and DTC Ratio of 1%. I have an annual Income of $45k and DTI ratio of under 10%. Last i checked my Credit score was 714. I have always tried to live within my means but i would like to splurge a bit and buy a luxury SUV.
My biggest concerns are that i have no auto loan history in my past (but i can have a co-signer) and the year/mileage on the vehicle is about 5yrs old with 70k-90k miles. However im looking to put down 10k and will just need a loan of about 22k
Any input is greatly appreciated !!
07-24-2012 02:34 PM
Do you have any previous installment loans on your credit reports ? Also have you priced out insurance for the Escalade ? It will be very pricey and will add significantly to your monthly costs.....
07-25-2012 06:47 AM - edited 07-25-2012 06:48 AM
I do not have any previous installment loans or student loans, only (2) credit cards that i've had for 5 years now.
Yes i have priced out full coverage insurace and have no problem paying it
07-25-2012 06:54 AM
The part about the co-signer, try to avoid that. Try to make this work on your own.
With a sizable enough downpayment, all woes are pretty much waived, so make sure you have quite enough for that.
And are you sure you want an Escalade with that much mileage on it? I know you said you wanted to splurge on a luxury SUV, but isn't the Escalade also one of the most stolen SUVs nowadays, as well?
But, if you are adamant about this, I believe it is very, very possible for you to get one... the thing might be the interest rate you'll get initially for it, although with a 714 score, I have no doubt you'll get something decent at least.
Follow my financial journey: http://www.frugalrican.com
07-25-2012 06:58 AM - edited 07-25-2012 06:59 AM
Escalades of that year with high mileage is going to cost you a fortune. You no longer have a warranty and their parts are expensive. They get terrible MPG so you are goign to be spending several hundred a month of gas too. That is a lot of money to spend a month on just a car.
Based on the information you provided you should be able to get a loan. Since you have no auto history and its an old highmilage car the interest rate is going to be really high.
07-25-2012 08:19 AM
Thanks, i will try to apply bymself first... does it hurt any to reapply with a cosigner if i get denied the first time?
Also, would i get a lower interest rate with a cosigner? or does that soley depend on my credit score?
I will be putting down 30% so i hope thats well enough to waive my lack of installment loan history
Thank you for the info ! I have thought long and hard about getting an SUV and have done my fair share of reasearch. Luckily this wont be my daily driver, so gas wont be to bad. I do a few engine rebuilds and auto repairs on the side so im fully capable to work on this if anything were to break (knock on wood)
07-25-2012 10:43 PM
Re: applying a second time - no penalty at all assuming the inquiries are auto-coded; standard FICO models will de-dupe the inquiries for scoring purposes (though they still show up on your record) within a certain period. Within 2 weeks is guarunteed, and typically 4 weeks is what many lenders currently would have as a window (FICO '04 model if you're curious).
I think you have a good shot solo, a 30% downpayment buys a whole lot of absolution for people (like me) who are in a worse credit strata than you and still managed to get an approval through dealer financing worst case.
Plus you can check a few CU's too, some of those don't use an auto-enhanced industry option, so the "first time buyer" penalty for not having an auto or similar installment loans on your credit report doesn't come into play, at all.
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