Young Adult need help with Auto Loan

[calvin_equityr]

I recently applied for a loan with my credit union but was denied because of my the length my employment history and short credit history.(student loan 2 years and Job for 3 months)

I make 700 bi weekly after taxes and I get $100 deposited on  a bank card every week from a relative

I applied for a car at large used dealer in my area car was a Honda accord 2010 with 52k miles for $13000 and I was putting 2k down..got approved with payments of $326 for 72months with an interest rate of 18%.

Tried Auto Nation nissan by my house got approved for a mini cooper 2008 57k miles again 2k down  with payments of 346 a month with an interest rate of 17.9%

Is this to high of an interest rate for a first time buyer? 20 years of age Credit score as of 10/5/2013 is 694 equifax,651 experian,691 Transunion,Equifax was 705 until the inquiries dropped it down 11 points..9 inquiries from one dealer one from the actual dealer and others from lenders.

Dealears keep telling my interest rate is going to be high because I have nothing on my credit besides student loan and because I'm a first time buyer.

Do I need to put more down?

Just get a new car since they have the 2014 versa for 13000 after taxes?

I dont want a co signer.

Wait longer?

Finance guy told me its harder to get the banks to finance a new versus a pre-owned car..i think that's bs but hey I could be wrong.

Just need some advice..

I dont have any bill besides lights,student,loan,and half of the cable,which is about $400

Insurance is high too..for ex:$837 down for the cooper with $400 a month and thats just for 6months..

I just got a secured credit card with my credit union with a $300 limit.

Just need some advice...any advice would be greatful.

Finance manager at my credit union said I could refinance with them after 6 months to a year

[parakleet]

I would definitely shop around. Join another CU if need be. Other first time buyers have posted much better rates here. Read the sticky on first-time buyers on the forum - you're bound to find a lot of information there. Also, don't believe everything the dealer tells you - they're probably marking up the rates and they would make a pretty penny just from the financing so they have an incentive to not tell you the truth. 

[Revelate]

Check with a few independent lenders but those rates aren't unreasonable from what you described from what dealers and subprime lenders may offer.

What you can do (what I did with a similar loan) is simply make payments on it for six months, and then refinance it.  In the mean time, setup a secured card or two as well, and in six months your FICO will have improved substantially allowing you to refinance at a much lower rate.  My own one went from 19.35% APR to 5.99% APR after 8 months.  My auto enhanced score was likely 100 points higher at that point.

That's an option if you can afford the payments.

[maiden_girl]

The interest rate isn't completely unreasonable for a first time buyer....HOWEVER, you are trying to make the system benefit you. Not have the system benefit off of you. If you don't really need a car right now...don't buy one. Your credit needs to be tailored a little more to get the maximum results. What's your credit profile like? Cards you have, etc? I would not advise obtaining a loan on any car past 60 months. 60 months is ideal. Don't payment shop and appear desperate at a dealership or to a lender because they will feel they have the upperhand and talk you into something you don't want or need.

[calvin_equityr]

I have a secured card but it has not been reported yet..The only thing I have is two student loans which have never been late($6,745 remaining balance two years old).Im was preapproved for an interest rate of 6% from my creditunion but later denied because of short credit history and length of employment history since I only had my job for 4 months now this was before my account turned two years old..

I need a car just to commute back and forth from work which is less thean 5 miles from my house..

How long should I wait to purchase if I cant beat that rate?

[Revelate]

Your credit score will likely improve as soon as that secured card hits.

That said, may not make substantial difference to the reasons you were denied.  Might be six months before the CU will say boo, or to make any dent rate.

If you need a car now, I'd suggest just sucking up the payment for six months and then take the CU's offer on a refi; if you have some alternative form of transportation (bike or bus or whatever) that you can wait for six months, you can open up another card, and even a secured installment loan, and you'll be in a better spot when it comes to auto loan qualification; however, personally I had the same choice and I just sucked up the payment as I expected, but life in Los Angeles mass transit is simply awful.

[maiden_girl]

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@Revelate wrote:

Your credit score will likely improve as soon as that secured card hits.

That said, may not make substantial difference to the reasons you were denied.  Might be six months before the CU will say boo, or to make any dent rate.

If you need a car now, I'd suggest just sucking up the payment for six months and then take the CU's offer on a refi; if you have some alternative form of transportation (bike or bus or whatever) that you can wait for six months, you can open up another card, and even a secured installment loan, and you'll be in a better spot when it comes to auto loan qualification; however, personally I had the same choice and I just sucked up the payment as I expected, but life in Los Angeles mass transit is simply awful.

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LOL. I was on the METRO bus too but I just couldn't make myself suck it up to buy now and refinance later. When I first started loan shopping, my approval rate was 25%. At that time, I only had two low limit credit cards over a year old ($850 total CL) and no installment loan experience. I waited for about 6 months, obtained a few more credit cards, and went shopping again. This time, APR was around 15%. Still too much for me. I ended up waiting probably like a year and a half and tailored my credit even more to  point where I got approved for a loan new at 2.49% and 4.90% used. I was ecstatic! Of course I wanted my own but I didn't feel I deserved to pay more for a loan than was necessary and didn't want to waste time with a refi. I had a job and made my own money but during the time I was loan shopping, I was borrowing cars from family until I could get my own (paying for gas and maintenance as I drove). If you can do that, then you should just to save yourself the extra hassle. But if you can't wait, try a credit union. Build a relationship with them. I think you should wait 6 months tho. Wait until your secured card reports and try to get a unsecured credit card. With your student loan history, you should not have any trouble obtaining a unsecured credit card.

[Dustink]

You should at least wait until that secured card is six month's old. Plus work on saving up a larger down payment.

[calvin_equityr]

Thanks for the advice everyone..I've been sitting on it for a few days now and I dont think its worth me paying that much in interest..I'm just gonna continue to use the bus since my job is pretty close to my house..I just wanted a car so badly..But I'd rather wait then to make a mistake and enter an agreement for the next few years that I'm not comfortable with just to have a car..Think I'm going to try again another year from now,by then I should have a stronger credit profile and know what to say and how to negotiate the terms that best suit me...maybe buy a used car for now...

thanks again

[Dustink]

Good move.

You made a well thought out and mature decision.