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Please quick auto finance advice new grad/job Desperate

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Anonymous
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Please quick auto finance advice new grad/job Desperate

Hello all, I started as nurse in NJ at hospital and have been having trouble getting to work due to no vehicle. I am risking losing my job which took me a LOT of work to get, due to issues getting to work. Public transportation is not an option for me because it is a high crime area and I am not putting myself  in that position. My sister has offered to copay for me. My base gross salary is 55k/yr my score is 550 and I have only been working for 1 month and have no significant work history beforehand. My cosigner has score of 700 via Experian and a stable 5 yr work history and grossed a bit low last year (26k past year due to maternity leave) year before is 34k. 

 

My question is what are my options? Do I have to get a base civic or something? Or can I get a 25-28k car? Is it easier to finance a new car or used car? And with my sisters income how much would I qualify for? I am willing to pay up to 550 a month if it's a car I like. I went to a dealer and they told me that my sister should sign without me is that true?  Any advice, I am a bit desperate.

Message 1 of 4
3 REPLIES 3
llecs
Moderator Emeritus

Re: Please quick auto finance advice new grad/job Desperate

How much would you put down as a down payment?

Message 2 of 4
StartingOver10
Moderator Emerita

Re: Please quick auto finance advice new grad/job Desperate

Congratulations on your recent graduation and your new job! Smiley Very Happy

 

I completely understand where you are coming from in wanting reliable transportation. However, it is a huge leap to go from zero payment per month to $550 per month for X years. This is the junction in the road that will make a big difference on whether you can make the payment timely or not.  $55k/yr sounds like a lot when you are a recent graduate. It's not if you add in a car payment of $550/mth. Remember, in addition to the high car payment, you will have insurance. If you are a recent graduate, the insurance is most likely to be high as well, especially if you are under 25.

 

You have several issues that immediately present themselves: 1) not enough time on the job; 2) low credit score; 3) an unstated amount of savings (I assume not much because you didn't say what you have in the way of a down payment) and lastly, champagne tastes and a beer budget Smiley Happy - like most recent graduates.

 

Lets address the last issue first: champage tastes and your budget. This is a normal reaction to your first job. However, it will get you into trouble every time. Instead of making this car break the bank, why don't you get a beater for the next 6 to 12 months until you can afford to buy a vehicle on your own without bringing your sister into the purchase? It sounds like she has enough on her plate with her current income and children to support. IMO it would be a very difficult payment for either of you, or even both of you, to make based on what you posted.

 

How have you been getting to work now? Is there any way you can share a ride with someone until you have increased your score to get a vehicle without a co-signer?

 

Or, consider getting a used vehicle with less than $12k purchase price range and a min of $2500 down and a payment less than $200/mth. But, before you do that, take a look at what has contributed to your score. It might just take a few months to get you into a range where you can obtain a reasonable car payment, but it will be worth it. Otherwise you are setting yourself up for a very hard time with a subprime lender. It won't take long to save the money for a down payment if you set aside the $550 "planned payment" and the insurance costs into a savings account every month. This will help you two ways: it will show you how easy or difficult the payment is for you and it will build up your savings quickly. If you work on your score in the meantime, you will be in much better position to buy in the next 6 months. By then you will have some job history, some savings, an idea of how a $550/mth payment affects you, and hopefully a better credit score.

 

BTW, do this savings in a credit union so you can establish a relationship there. Get your financing through a credit union before you go car shopping. Have the savings and job history in place before you apply for any type of loan.  IMO, the dealership will take advantage of you (recent graduate/low scores is ripe for being ripped off).

 

Remember, there is nothing wrong with taking baby steps: 1st the beater for 6 to 12 months; then the good used car financed for less than $10k (with a credit union); and then the car you want for the long term. Smiley Happy The time will fly by and you will have your dream car.

Message 3 of 4
Booner72
Senior Contributor

Re: Please quick auto finance advice new grad/job Desperate

I agree with getting a smaller loan - but not necessarily a "beater" - get something that is 10-15K and make sure you know the payment, including ins., that you CAN easily afford - and stick to that BEFORE you go into a dealer.   When I bought a car I knew I couldn't afford more than 250 a month.  I paid 13500 for my 06 subaru forester and it's a NICE car and the pmt is 255.  550 would (and has) killed me. 

 

Start small.  To answer your question -yes it sounds like if your sister cosigns you will get a pretty decent rate.  But remember, cosigning is a sign of the devil.  (Exageration).  What if you lost your job (god forbid) or got hurt and couldn't make the payment?  It sounds like your sis doesn't make much money at all.  I don't see how she could make the payment for you until you got on your feet.  Then her credit would be destroyed.  Then she'd resent you and you'd feel HORRIBLE.

 

Start small - get something you can qualify for on your own.  That's my advice.

STARTING: 11/24/10 EQ-584 EXP-648 TU04-595
CLOSED FIRST HOME 8/19/11 EQ-630 EXP-691 TU04-653
CURRENT: EQ-701 EXP-??? TU08-720
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