Who Should Finance Me?

[Anonymous]

Looking to buy a pre-owned car in the next 30-60 days and unsure where to start my finance search. My scores are in the high 500s (maybe even hitting right at 600 by now). No trade-in, but I will be putting cash ($10-15K) down.

Looking at luxury cars in the $30-40K range. I have a one-time repo from two years ago (immediately resolved), and many old negatives and lates on my report from my marriage. All outstanding debt and collections will be settled by December 1 (most already are), and I suppose my report will reflect that by Jan 1 or so. Only lingering things on my credit report are school loans at approx. $50K, which will be attacked over the next several years. I have one low-limit credit card purely for rebuilding credit. Income at $110K plus 15% annual bonus. Been at same company for five years. No mortgage (I lease).

That said, I prefer remaining with BofA as my primary bank. Is a CU the *only* good way to go? If so, how long would it take to build a relationship, and do I need to deposit my payroll there, do I just start a separate savings account, or ...? Looking for the level of commitment to a CU required to make it worth it.

What about financing online through places like Lending Tree or Cars.com affiliates? What about financing through a national used-car dealership, like Carmax? Are any of these ripoffs, or do they all play by the same well-governed rules?

Appreciate any help. Thank you.

[cdtotten]

Your income is obviously fine, but your credit is REALLY going to hold you down in this process. Your credit scores are very low, and with a recent repo, your auto-enhanced FICO will be shot to hell. By putting 50% of the loan up as a DP, that will definitely help your odds, but I don't see any way around an interest rate of 14%+ or more without a co-signer. Many dealerships will turn you down on the spot because of the recent repo - especially if you are looking to buy a luxury car.

CUs are more forgiving of past mistakes. Developing a good relationship depends on the entity... some will lend right off the bat, but others want a direct deposit for 6 months before they are comfortable with you.

I think you are going to have a hard time with this. Recent auto derogs are going to really hurt. It isn't all about income.

[Anonymous]

I am resigned to the idea of a high interest rate, as I assume I'll be able to refinance at some point in the future. Either way, it's my penance. :-/ The "turned down on the spot" is most concerning, however.

I wanted to double check to see if you had any thoughts about going the online-approval way versus a Carmax, et al. I won't be looking for financing from a luxury-car dealership.

[mross1080]

I know infiniti will approve with a 600 not sure what there stand is on a repo though. A large down payment would help your cause though.

[Booner72]

You could get a very nice used car w/ 15K and have no payment and no interest.   I betcha you could get a nice BMW or Lexus for 15k if you're willing to get an older model.

Buying cars for cash is definitely the smartest thing to do.

EDITED:  Grammar =- ) 

[bigman023]

I agree with Booner.  If you have 15K down, you could get a really nice car if you used the down payment and just bought a car. Especially if you purchased from a private owner. With a private owner I feel you get more for your money.  You may even want to consider asking a CU or Bank if they will loan you 15K, if you put your 15K up as security.  This way you can buy a car with cash, and build a positive trade line.  These kind of loans usually have pretty low rates.

Good Luck

[pmbrian]

+1 for Booner....

Buy a used for cash and take what you would pay in payments and attack your other obvious issues....you need to shift your thinking, you are stuck in the same debt rut you have always been in.