Will I get a good rate?

[Anonymous]

I'm single and just purchased a home last July for around 150K...I don't have any other debt other than about 4k in furniture debt and student loan. I was in a car accident last week (not my fault) and I as almost positive that my car will be considered totaled. It is 10 years old with 196K miles. It has not given me any trouble up to this point and I had plans on keeping it through this year and purchasing something towards the end of the year. So now I'm faced with two options....buy back my car and fixed it with the money from the ins company or get a car with a car note! I was pretty sure that I was going to buy back my car and wait...I wanted to save up more of a down payment and pay off the 4k debt and increase my score. I pulled it the other day at it was 692 and 702 on MYFICO. I was also concerned that with me just getting a mortgage loan my debt to income would suffer trying to get a auto loan. I want to be in the best possible situation to get a car....do anyone think I will have trouble getting a 3.99% or lower interest rate now? Or should I stick with my original plan and save for a DP and purchase at the end of the year.

[Jazzzy]

Do you have anyone who can advise you on the condition of your totaled car? The extent of the repairs needed?

I'd be very careful of this. Your car will have a carfax report on it that states it was totaled and that will (of course) drastically impact its value if you decide to sell it.

This is a question that is difficult to answer here because we don't know the extent of the damages, etc. I just can't see pouring a lot of repair money into a totaled car with 196K miles...unless I'm misreading your situation.

Do you belong to a credit union? If so, I would sit down across the desk from someone with a copy of your credit reports in hand and ask them what you may qualify for. If you get cash out from the insurance company that could be used for a down payment, I hate to see you put that money back into your old car.

Message Edited by LynetteM on 01-17-2010 09:09 AM

[Anonymous]

I just received a call from the insurance company and they estimated the damages to be around $2500...they did not total the car. So now I have to decide if I want a car note or get the car fixed and drive it a little longer...I'm torn about this becasue it is an older car...should I really use that money for a car that old that I wanted to get rid of by the end of the year anyway?

[Hairy_Satchel]

I was in a similar situation a few months ago. I had just bought a house and needed reliable transportation. The value of my old, old car was so low that making expensive repairs did not seem wise. I bought a like new truck for a fraction of a new one. As much as I hate a car payment, getting stuck on the side of the road and leaving my coworkers in a jam is much worse.  Like others have said, talk to your credit union or bank. My DTI was not even mentioned.