Not So Great Credit, Help on Getting Approved for an Auto Loan

[Anonymous]

Disclaimer -- This WILL be a long post, so if you have the patience to read & give insight, I thank you in advance. I've been browsing around this forum for a while, and decided I would post and see if anyone could give me any help on my situation. I know alot of you guys are pretty credit savvy, so hopefully you can help.

I'm looking to get a new (or new-to-me used) car in March of next year, hopefully as a birthday gift to myself... I've been doing research and I hope my credit score, down payment and income will secure me a loan. I KNOW I will pay a high interest rate, and I'm ok with that... I just want a new, reliable car that I can afford (monthly payment is my main concern).

Here's my situation... I have pulled my Experian today, and my score is currently at 550. Unsure of Equifax or Transunion. I have 3 collection accounts, and an unpaid repo from WFS Financial that occured in Feb of 2008. I have a total of 3 student loans that I have been paying on since 12/2008. My payment history with these is perfect. No lates at all. I owe about $4300 each on two of the loans, and $5600 on the other. I also have a credit card with Cap One that I got in April of this year, no lates, $300 limit, currently have a balance of $285, but it will be paid off next week, and I won't use the card after that or if I do will pay off in full each month. My only recent inquries are for my Cap One card, Verizon Wireless when I got service this past Feb, and a BofA Card I applied for earlier this week.. haven't gotten a decision yet.

I also have a current car loan with Crysler Financial, now TD Auto finance, the payment is $499.75/month. I was able to get this loan in Aug 2006 when I still had my previous loan, so for about 6 months I had two auto loans on my credit. I financed a car for someone I was dating, HORRIBLE decision I regret, but I was young and have learned my lesson. Struggled for months to pay both car notes, but I had just started my job and wasn't making enough money to do that. Anyways, I currently owe about $7000 on my TD loan, I have been 90 days late once on this loan, but for the past 2 years, I have had no lates. This car has started to give my problems, so definitely need a newer one. I'm not looking to trade the car in. I have put myself on a STRICT budget and will pay off this loan by the end of this year. Hoping this paid off auto loan will increase my score. 3 months after paying off the loan is when I'd like to apply for a new one.

My income is stable, I've been at my job for four years this October, and currently make roughly about $3,600 / month gross, more if I have worked extra hours. This can be easily proven with my checkstubs.

Not sure if this matters, but I live in California, I'm male, and 26 years old.

Now, I'm eyeing a Scion. I want a 2012 xb. The MSRP for the car is $17980 + $3000 misc fees, taxes, title, etc. (I'm guessing) = $21,000 total. I'm looking to put $5000 down, which is almost 25%, so the amount I want to finance would be about $16,000. Based on the calculator on the Scion website, at an APR of 21.4% for 72 months  from Toyota Financial (which is the last tier, based on my current score) I would pay about $396/month... which is perfect. If I can somehow get my payment down to $350, even better. I was looking at this chart found on my local dealer's website as a reference Scion Financing

So, what you do guys think my chances of being approved will be? Does anyone know about Toyota Financial and thier likeliness to finance someone in my situation? Any other suggestions or things I should look into to get a loan?

How does having a paid off car loan AND a reposession affect one's score?

 Thank you for your insight guys, it's very much appreciated!   

[Anonymous]

I love that you are realistic about your problems.

before we go any farther are you in the military or do you have family members in the military? 

Giving yourself 7-8 months is excellent, a lot can change or even your needs can change between now and then.

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@Anonymous wrote:

Disclaimer -- This WILL be a long post, so if you have the patience to read & give insight, I thank you in advance. I've been browsing around this forum for a while, and decided I would post and see if anyone could give me any help on my situation. I know alot of you guys are pretty credit savvy, so hopefully you can help.

I'm looking to get a new (or new-to-me used) car in March of next year, hopefully as a birthday gift to myself... I've been doing research and I hope my credit score, down payment and income will secure me a loan. I KNOW I will pay a high interest rate, and I'm ok with that... I just want a new, reliable car that I can afford (monthly payment is my main concern).

Here's my situation... I have pulled my Experian today, and my score is currently at 550. Unsure of Equifax or Transunion. I have 3 collection accounts, and an unpaid repo from WFS Financial that occured in Feb of 2008. I have a total of 3 student loans that I have been paying on since 12/2008. My payment history with these is perfect. No lates at all. I owe about $4300 each on two of the loans, and $5600 on the other. I also have a credit card with Cap One that I got in April of this year, no lates, $300 limit, currently have a balance of $285, but it will be paid off next week, and I won't use the card after that or if I do will pay off in full each month. My only recent inquries are for my Cap One card, Verizon Wireless when I got service this past Feb, and a BofA Card I applied for earlier this week.. haven't gotten a decision yet.

I also have a current car loan with Crysler Financial, now TD Auto finance, the payment is $499.75/month. I was able to get this loan in Aug 2006 when I still had my previous loan, so for about 6 months I had two auto loans on my credit. I financed a car for someone I was dating, HORRIBLE decision I regret, but I was young and have learned my lesson. Struggled for months to pay both car notes, but I had just started my job and wasn't making enough money to do that. Anyways, I currently owe about $7000 on my TD loan, I have been 90 days late once on this loan, but for the past 2 years, I have had no lates. This car has started to give my problems, so definitely need a newer one. I'm not looking to trade the car in. WHY WILL YOU NEED THE ADDITIONAL CAR? I have put myself on a STRICT budget and will pay off this loan by the end of this year. Hoping this paid off auto loan will increase my score. 3 months after paying off the loan is when I'd like to apply for a new one. PAYING OFF THE LOAN MAY ACTUALLY DROP YOUR SCORE A FEW POINTS-THAT DROP WILL BE MORE THEN MADE UP BY HAVING THE PAID OFF LOAN SHOW UP, AND NOT HAVING THE MONEY OUTLAY NEEDED EACH MONTH.

My income is stable, I've been at my job for four years this October, and currently make roughly about $3,600 / month gross, more if I have worked extra hours. This can be easily proven with my checkstubs.

Not sure if this matters, but I live in California, I'm male, and 26 years old.

Now, I'm eyeing a Scion. I want a 2012 xb. The MSRP for the car is $17980 + $3000 misc fees, taxes, title, etc. (I'm guessing) = $21,000 total. I'm looking to put $5000 down, which is almost 25%, so the amount I want to finance would be about $16,000. Based on the calculator on the Scion website, at an APR of 21.4% for 72 months  from Toyota Financial (which is the last tier, based on my current score) I would pay about $396/month... which is perfect. If I can somehow get my payment down to $350, even better. I was looking at this chart found on my local dealer's website as a reference Scion Financing

So, what you do guys think my chances of being approved will be? HIGH Does anyone know about Toyota Financial and thier likeliness to finance someone in my situation? Any other suggestions or things I should look into to get a loan?

How does having a paid off car loan AND a reposession affect one's score? IT WILL REQUIRE YOU TO NOT BE AN INSTANT APPROVAL, AND YOU WILL HAVE TO WORK WITH THE FINANCE DEPARTMENT OF WHERE YOU GO.

 Thank you for your insight guys, it's very much appreciated!   

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1- Do some checking around on these boards and others and asee if you have a local/less stringent credit union you can join.

2- Save Save Save. More Downpayment =better deal, more likely you will get a deal.

3-You have car history, but its both good and bad...so you will definately take hits with a past repo. I have no idea what your Autoenhanced score would be.

4- If you have any family members in the military or who are already members of Navy Federal Credit Union get them to sponsor you, or join themselves and then sponsor you.

5-Why are you not trading the car in? In my opinion the only wrong thing you are doing is such. Are you selling it private party or keeping it? If you are keeping it then it obviously is not too much in need of a replacement- a that point hold on/hold out longer and just pay cash for your car year after next.

[Anonymous]

Thanks usmc58555... I see your postings alot on in this forum, and you seem pretty knowledgable, so I'm glad you took the time to reply to my post.

1. I don't have any military affiliation at all.. so I don't think this would work for me.

2. I'm opening an account with my local Credit Union (Altura) this week.. so by the time I apply for the loan, I should have around 7-8 months history with them, so hopefully that will help me.

3. I'm not looking to keep my car because it's having major problems which have become EXPENSIVE for me to fix...I just don't see the point in putting alot more money into a car I just wouldn't be happy driving and that is gonna eat all my money in repairs and maintenance... I'm not 100% sure about NOT trading it in.. I just want to make sure I have enough cash down payment, without the trade in to try and secure the loan.. if the dealership offers a decent amount for the car I wouldn't mind using that towards the down payment too, I guess I'm just expecting the dealer to not give me an amount I would like for the car, but we'll see when the time comes.

I was looking at my CR and see that all of my negative items, including my Repo will fall off my report by the end of 2014. So maybe if I do get approved with a high interest rate, I can refinance then.. or maybe that's me getting ahead of myself. LOL

Anyway, Thanks again for the input. Much Appreciated

[Anonymous]

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@Anonymous wrote:

Thanks usmc58555... I see your postings alot on in this forum, and you seem pretty knowledgable, so I'm glad you took the time to reply to my post.

3. I'm not looking to keep my car because it's having major problems which have become EXPENSIVE for me to fix...I just don't see the point in putting alot more money into a car I just wouldn't be happy driving and that is gonna eat all my money in repairs and maintenance... I'm not 100% sure about NOT trading it in.. I just want to make sure I have enough cash down payment, without the trade in to try and secure the loan.. if the dealership offers a decent amount for the car I wouldn't mind using that towards the down payment too, I guess I'm just expecting the dealer to not give me an amount I would like for the car, but we'll see when the time comes.

Anyway, Thanks again for the input. Much Appreciated

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Ok, so lets talk.

Why would you not trade your old car in? By your admission its a money pit, and keeping it as a non driving unit is just kinda dumb, it will cost you money and upkeep and hassle. Yes you are probably not going to get what you think you should for the car, but it does make the problem go away. Yes you can sell you car private party, but with that many problems do you want to be screwing around with people and try to get them to buy it?

Again you will probably not get what you want from a dealership for it, but is that trade off worth the hassle of you trying to seel it on your own, or fix the mechanical issues to sell it on your own?