questions about getting loan with 620 score

[ineedadvise]

hello I need some guidance....

my husband and I need to buy a new(er) vehicle before the end of the summer. We currently have an 02' that will need too much work to pass inspection in August. A little background... Thatnks to this forum we purchased our home in 2009. In 2011-2012 we went through a rough period and ultimately decided to close most of our credit card accounts, negotiated directly with some of the companies, settled with some, and unfortunately some went to collections. There were 12 accounts total and we now have all but three paid. Two discover card accounts with a combined balance of $1900 and one last collection for $1300. We each have a credit card, open, in good standing for emergencies. as I mentioned we has lots of "dings" from a few yards back. Currently our scores are 622 and 628  as of our last discover card statement. I checked my equifax score thru here and it was a point off, so I'm confident that the 620's is where we are at. I've been paying off our debit in chunks so last month I paid off a loan we had thru Citifinancial as well. We do have a loan on our 2010 car, with less than $4000 to pay (loan will be paid off no later than March 2016). 

So, how do we fair? I will start putting $1,000 into savings for a vehicle this month...hoping to have $3,000-4,000 by end of the summer. Do I need to pay off the collection account before we apply. How much does the open collection hurt us? We have had a few auto loans each in the past, maybe a couple of 30 day late over the group...no repos, collections, etc. so with auto loans do most dealers use auto enhanced fico scores? I'm not familiar with how they work...and if so how does that impact us? We both work, I've been at my job for 15 years, and my husband for 7 at his. Our gross annual income is $120,000, so it should not be an issue as far as income, job, etc. I just want to know if we are going to need a down payment. We are looking at vehicles under $30,000. Are we going to be a position where we need to buy a new car or should we be ok with a low mileage 2 year old vehicle?

Sorry for the long post, any incite is appreciated...I just want to be as prepared as possible

[Creditaddict]

I would pay off the open collection

Do you have a carmax near you? that would be my go to (but dont' buy the MAXCARE maintnance plan!) just GAP

[BallBounces]

@creditaddict,

I am sure it has been said elsewhere, but can you tell me why you list CarMax as your GoTo in this situation?

My assesment of them is an incredible selection, up front information and stand up "return" policy, access to many other vehicles    ....  but fairly terrible value in the used car market place.  (in other words they are expensive relative to other options).

What is your recommendation in this area based upon?

[Creditaddict]

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@VistaV wrote:

@Creditaddict,

I am sure it has been said elsewhere, but can you tell me why you list CarMax as your GoTo in this situation?

My assesment of them is an incredible selection, up front information and stand up "return" policy, access to many other vehicles    ....  but fairly terrible value in the used car market place.  (in other words they are expensive relative to other options).

What is your recommendation in this area based upon?

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see I don't find them expensive as an overall rule... 5% of the vehicles may list a bit higher based on demand for them but unless you are a steller negotiator then I don't think you get better prices on used cars at other dealerships and at what price is that worth?

Carmax you can pick your car, have financing in 5 minutes, send the car to clean up, go to paperwork (depending how many are ahead of you) signed in under 30 minutes and then just wait for the car from cleanup (again depending how many are in front of you) but under an hour out the door driving your new car!

I like that you are seeing finance offers instantly, no one is messing with those numbers, no one is telling you what you don't qualify for even though you might if you knew how to push back... it's just there on the screen for you to decide on.

they don't care or push you to put money down, they just enter into the computer whatever you want.

[StartingOver10]

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@VistaV wrote:

@Creditaddict,

I am sure it has been said elsewhere, but can you tell me why you list CarMax as your GoTo in this situation?

My assesment of them is an incredible selection, up front information and stand up "return" policy, access to many other vehicles    ....  but fairly terrible value in the used car market place.  (in other words they are expensive relative to other options).

What is your recommendation in this area based upon?

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VistaV, my experience with CarMax is the same as your experience.  I have sold several vehicles to CarMax but I never purchase there because of the price of their vehicle. I have been more successful workng with other dealerships on getting to a good price on a purchase. Naturally you have to negotiate the price anywhere and maybe that is why I don't go to 'one price' dealerships to buy.

[BallBounces]

Thanks for your perspective, creditaddict.

[ineedadvise]

Thanks for the Car Max suggestion. Does anyone have any other insight? The car max closest to me (1 hour away) gets mixed reviews...

[Creditaddict]

If buying new: truecar and select all the options you want to make sure you get the offer on the exact car you want.

[ineedadvise]

Thank you for the help. I guess my question really is...should I be concerned about getting financing with our history/scores?

[Creditaddict]

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@ineedadvise wrote:
Thank you for the help. I guess my question really is...should I be concerned about getting financing with our history/scores?

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Nope, the question will just always be rate