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New Member
Posts: 7
Registered: ‎02-15-2016
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Second car loan.

Back in august i financed my first car through wells fargo, it is a 24k loan with an 8% apr. I am now thinking about trading in my current vehicle for a new one which is about 60k. What can i expect when i apply for the loan? i make 60k gross annually, dont have a mortgage payment, i am about to turn 21, my DTI is 10 percent, been with my current employer for 1 year and 3 months (6 months when i applied for my first loan), and my fico scores are as follows.  Fico 8 Exp 750, Trans 746, Equ 736. , Fico auto 8 Exp 732, Trans 748, Equ 722. No lates and uti is 1% with 44k in credit. I know its alot but i would really appreciate some responses. Thank you very much.

Valued Contributor
Posts: 1,571
Registered: ‎12-16-2014
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Re: Second car loan.

[ Edited ]

Steel32 wrote:

Back in august i financed my first car through wells fargo, it is a 24k loan with an 8% apr. I am now thinking about trading in my current vehicle for a new one which is about 60k. What can i expect when i apply for the loan? i make 60k gross annually, dont have a mortgage payment, i am about to turn 21, my DTI is 10 percent, been with my current employer for 1 year and 3 months (6 months when i applied for my first loan), and my fico scores are as follows.  Fico 8 Exp 750, Trans 746, Equ 736. , Fico auto 8 Exp 732, Trans 748, Equ 722. No lates and uti is 1% with 44k in credit. I know its alot but i would really appreciate some responses. Thank you very much.I t

I think you will have several challenges here.  Chances are very high that you are upside down on your current car loan unless you put a significant down payment on this current car.  Bringing negative equity into a deal makes things much more complicated, the transaction costs alone (tax, licensing, dealer fees) makes it pretty difficult to not be upside down, then of course you have the depreciation that comes with all cars.  Before you get started I would determine your current payoff and check with KBB to determine the current car's value.  Without lecuturing you on good financial decisions I have to point out that insurance costs will be significant and being tied to a high car payment and insurance costs can really suck so I would just make sure you take that into account.  I have been there (many years ago) so I speak from experience.  To finance any car I suggest working with a credit union, they offer the best interest and are pretty lienient in general.  DCU, Penfed and NFCU are the favorites here.  Ideally you want to get prequalifed before you walk into any dealer.  Just curious, what car are you looking at?  

NFCU Go Rewards 18k, NFCU Go Rewards AU 22k, NFCU CLOC 15k, NFCU N Rewards 14k, Amex ED preferred 12k, Amex BC 1k, USAA CL 2k, Hawaiian Air Barclay 1.2k, Venture One 10.1k, Target 7k, Citi Costco 2k, Citi AAdvantage 7k, NFCU Platinum AU $14K, Penfed Platinum Rewards $5.5k. PayPal 2.2K, Discover IT 6k

Gardening till 2018, Goal of 700's by the end of 2017
MyFico Scores June 2017: EQ 692 TU 703 EXP 698
Regular Contributor
Posts: 130
Registered: ‎01-11-2017
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Re: Second car loan.

Personally I think you're going to have some issues. Have you researched what your vehicle is worth versus what you owe? I would take it to Carmax and get a written offer that you can use to your advantage elsewhere. KBB value doesn't mean anything to dealers, as KBB does not buy cars, they sell advertising. A Carmax offer means a lot more, as far as you having a clear idea of what your current vehicle is worth. 

 

Assuming you're not significantly under water on this vehicle you just purchased less than a year ago (probably a huge assumption unless you put a lot of money down) - $60k financed for 60 months at 0% (which you probably won't get) is $1,000 per month. That's 20% of your gross income on a car payment. I'm sure there are banks who would do it, though I can't possibly see how a $60k auto loan is something a 21 year old needs. I would make one exception to that - if you were a welder or something like that and you needed a diesel truck I might then be able to at least understand.....but few circumstances come to mind where this makes a whole lot of sense. 

Starting Score:Low 500s in 2013
Current Score: TU: 696 EX: 712 EQ: 701
Goal Score: 740 Across the Board
In My Wallet: Cap1 QS1 - Cap1 BuyPower - PenFed Power Cash Rewards - PenFed Promise - AmEx Delta Gold - AmEx Green - DISCO

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New Member
Posts: 7
Registered: ‎02-15-2016
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Re: Second car loan.

I currently owe 23k on my vehicle, I used kbb to value my vehicle at 32k. The vehicle I'm seeking to get is a 17' camaro zl1, my current vehicle is a 16' camaro ss.
Regular Contributor
Posts: 130
Registered: ‎01-11-2017
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Re: Second car loan.

That's being said, I'd say you'd get approved. The ZL1 is awesome. I still don't know that it's the most sensible thing for someone so young to do....but to each his own. When you do buy, you should search all over the Internet for dealers within an acceptable driving distance and see if they have a ZL1 that has a select model bonus tag. On that type of car it could be worth upwards of $10k off.....Chevy has been doing select model bonus tags a while now....and I know dealers select premium vehicles for it (we assigned bonus tags to 50th anniversary SS's) because normally the vehicle would have $0 rebates....so it's an easy sale when they have $10k off. You could even call a dealer, ask to speak to the sales manager, and ask if they'd be willing to bonus tag a ZL1 in stock. If they know they have it sold by putting the tag on it, they'll do it. If you do this, you'd need to call around the 3rd business day of the month, as that's when bonus tag selection typically begins. Of course, this is assuming a ZL1 can be bonus tagged....I know they could in the previous generation not certain about the new ones. 

Starting Score:Low 500s in 2013
Current Score: TU: 696 EX: 712 EQ: 701
Goal Score: 740 Across the Board
In My Wallet: Cap1 QS1 - Cap1 BuyPower - PenFed Power Cash Rewards - PenFed Promise - AmEx Delta Gold - AmEx Green - DISCO

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Valued Contributor
Posts: 1,571
Registered: ‎12-16-2014
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Re: Second car loan.

You must have put a nice size down on that SS, thats a good thing.  I would suggest getting an insurance quote and factoring that in to your costs.  650hp and a 60k car with anyone under 25, especially a male is going to be expensive so you will want to make sure you don't have a big surprise in addition to a substantial payment.  

NFCU Go Rewards 18k, NFCU Go Rewards AU 22k, NFCU CLOC 15k, NFCU N Rewards 14k, Amex ED preferred 12k, Amex BC 1k, USAA CL 2k, Hawaiian Air Barclay 1.2k, Venture One 10.1k, Target 7k, Citi Costco 2k, Citi AAdvantage 7k, NFCU Platinum AU $14K, Penfed Platinum Rewards $5.5k. PayPal 2.2K, Discover IT 6k

Gardening till 2018, Goal of 700's by the end of 2017
MyFico Scores June 2017: EQ 692 TU 703 EXP 698

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