Student looking for advice on future auto loan

pachem · ‎02-14-2014

Hi guys,

I'm brand new here, but was wondering if anyone could give me some advice on how to become a decent applicant for an auto loan in the future.
Basically, I'm a college student, 21 years old, and my income is a little wonky. I'm currently making around $800/month from 2 on campus jobs, and then I'm also an RA. In regards to being an RA, I don't get paid a salary or anything, but am instead compensated with free housing and a meal plan, both of which are valued at around $11,000 combined. When it comes down to it, I don't pay rent or utilities, and I really don't have to pay for food. I guess my problem is that there's no real documentation of my RA compensation. Instead of getting a fee waiver for the free housing and meal plan, I'm instead just not billed by my school for those.

The real reason I'm looking into auto loans is because I was given a car by my mom just over a year ago when she upgraded, and my poor little VW Bug has become something of a money pit. It wasn't really maintained like it should have been, and I've already been forced to spend a few thousand to get it repaired...and it's time for my car to go back into the shop. I guess I'm at the point where I need to decide how much more money I can throw at my car before it's just too much.

Credit Score: 733 from Transunion
2 Credit cards (Discover and Capital One) with a combined limit of $2,000, utilization of around 3%
AAoA: 1.5 yrs, with the oldest being at 2.5 years
No derogatory marks

Down payment amount: Currently have $2,000 saved specifically for a downpayment, and I figure I can put away between $300 and $500 a month from here on out
Co-signer: If at all possible, I'd prefer to avoid this. While I'm entirely comfortable with my ability to make payments, I'd rather not to put family members in an awkward position

I do have student loans, but they are being deferred while I am still in school.

Overall, I'm trying to get my finances sorted before replacing my car becomes a necessity. I know that setting aside money each month to increase my downpayment is probably one of the best things that I can do, but is getting a loan even feasible when my income isn't directly clear? Any other advice for how to boost my chances?

Creditaddict · ‎02-14-2014

What are you thinking of buying? Brand, model, used, new, budget?

in all honesty I always say less is more when doing things like loans and apps... Don't offer up,what your income forms from, etc. just give the final number

In your case $20,600 plus your down payment.

many banks and car dealerships are there to sell a car so if credit supports the income you are stating many times they don't want to know more!!

carmax doesn't seem to verify income.

i found Infiniti and Kia didn't either.

hyundai, Acura did though.

of course different dealership within same model car "may" be different but based on how many carmax cars and Infiniti cars from different parts of country I have bought I would assume that's kind of standard!!

SamsungHDTV · ‎02-15-2014

You may run into the problem of many lenders having a minimum income level to qualify. What you can do is call around to various lenders you are considering and asking them if they have a minimum income requirement before you apply. If you do find a lender that doesn't have an income requirement then you may run into a DTI issue unless you're buying used and cheap or big down payment.

A cosigner would solve all these issues.

Remember0 · ‎02-15-2014

To add to what creditaddict said, I have two other questions for you:

1) What year are you in school right now (sophomore, junior, senior?)

2.1) If a senior, what are your post-grad plans?

2.2) If a sophomore or junior, what are your summer plans for this summer?

A lot of auto makers have college grad specials where if you are graduating an offer letter is enough. Otherwise, if you are working full time at a paid internship this summer, the income from there counts imo. And remember that'll produce full-time pay stubs over the summer.

pachem · ‎02-15-2014

Thanks so much for the help, you all!

I'm a junior right now, so I'll be here for another year. As for my summer plans, it looks like I'll be staying at school to work in a lab. Current plan is to work as a summer RA (so once again no rent) and continue with one of my on campus jobs. All in all, I think I can reasonably expect to make around $1,000/mth for the 3 months. I may make more, but I can't say that for certain. I don't know if it helps at all, but I've already accepted a position for next year. It'll force me to drop one of my jobs, but the result should be me making around $900/mth, so it's a slight improvement.

As for the car info, I'm not looking to spend for than $12,000. I've been looking at used cars, but haven't really targeted a specific brand or model. I wouldn't mind something like a Jeep Patriot that's a few years old. I would also be fine with something smaller than that, but not larger. My downpayment will hopefully grow as I continue to save, which would mean a smaller loan. Honestly, I'd prefer to start the process of getting a loan sooner rather than later, but I can wait if it means not dooming myself to failure.

In terms of having a cosigner, I just don't think I have any solid options there. My grandparents have impeccable credit, but they've had one too many poor experiences with cosigning for family members. They have no desire to go through that again, and I don't want to make them feel bad for saying no to me when it's completely within their right. My mom has said that she would cosign if she could, but she has worse credit than I do and just got her car a year ago. She doesn't think she'd be eligible to cosign for me.

Creditaddict · ‎02-15-2014

Finding the car is the process... Loans take 30 seconds! Haha
But seriously find car, submit credit online if it would make you feel better, good scores and 20% down (which sounds like what you have if looking at $10-$12k cars) I wouldn't worry about it

pachem · ‎02-15-2014

Okay, that's pretty reassuring. I've definitely seen cars that I like, but I didn't want to get attached to a car if it was never going to happen. Here I thought I was being practical about all of this! Haha.

Do you have any recommendations for places that I should look to apply to?

Creditaddict · ‎02-15-2014

@pachem wrote:
Okay, that's pretty reassuring. I've definitely seen cars that I like, but I didn't want to get attached to a car if it was never going to happen. Here I thought I was being practical about all of this! Haha.

Do you have any recommendations for places that I should look to apply to?

Do you have a carmax?

pachem · ‎02-15-2014

Looks like there's one around an hour away, so that's a good possibility.

Creditaddict · ‎02-15-2014

Otherwise you are talking jeep, just look at the local jeep.

they seem to push about any credit through.