topic Re: Need advise purchasing a new vehicle in Auto Loans

Need advise purchasing a new vehicle

SoCalSchoolBoy — Fri, 13 Jun 2008 19:09:28 GMT

This is my first time on the boards and im just lookign to get a little advise. Here's my situation:

I currently own a 2004 dodge ram 1500 that was purchased 10 months ago for ~$19k after taxes

(12k down and financed $6700 through wells fargo). Since my purchase gas prices in southern california have increased almost $2.00 per gallon! Needless to say im looking to purchase something a little more economical this time around. At the rate of 12mpg i am spending $800 a month in gas alone. So may real question is do i pay of the remainder of the loan (~$2500) and then sell the truck before i purchase the new vehicle or should i keep that line of credit going untill after i make the purchase. Im not really sure what the effects of closing that will do to my fico score. Im 22 so my credit history isnt very long but is good standing with no late payments on my creit card or truck and i always pay more than the minimum payment. The only other loans i have are school loans which are in good standing untill i stop going to school and payments begin. I have about $900 in credit card debt, with only one card, that gets paid down every month. Any advise as to what i should do would be appreciated.

Thanks

Re: Need advise purchasing a new vehicle

Anonymous — Fri, 13 Jun 2008 20:27:39 GMT

Welcome!

I think your only choice is to sell the truck first and pay off the loan before you try to buy a new vehicle. A lender is unlikely to give you a 2nd car loan while you still have one outstanding (plus $900 in CC debt). Good luck!

Re: Need advise purchasing a new vehicle

Anonymous — Fri, 13 Jun 2008 21:13:11 GMT

Take your truck to Carmax have them give you a price to purchase it (the quote is good for 1 week). Then go to the dealership where you have the car you want to buy and have them beat that price.

Trade your truck in and the dealership will pay off the car loan and use the rest of the $$ they give you for the trade in as your down payment.

You don't need to sell the car first to get a new loan. This will be the easiest way to do it. Just make sure you haggle purchase price for new car separately from the haggle for your trade in.

Re: Need advise purchasing a new vehicle

SoCalSchoolBoy — Sat, 14 Jun 2008 20:27:26 GMT

Ok i guess i should have been a little clearer. I have the means to pay off the remainder of the loan in full. Should i pay the loan in full now and hope that the effect of having that account close isnt too negative or should i just continue making payments untill i am ready to make the purchase and use that money towards a downpayment on top of whatever vaue the truck has left?

Re: Need advise purchasing a new vehicle

Schoolbuskid — Sat, 14 Jun 2008 22:06:02 GMT

If it was me i would try and pay the truck off so that i could get more for trade, instead of balance owed being deducted from trade in amount! I suggest playing around with some auto calculator over at edmunds.com! Are you planning to buy new? If so find that car that you want and enter in all applicable data and see what you can come up with! Good Luck hope i was of some help!

Re: Need advise purchasing a new vehicle

Anonymous — Sat, 14 Jun 2008 22:58:48 GMT

If this truck is your only installment loan, paying in full and having the account close could lose you several points.

Sadly paying of car loans in full doesn't help your score. If it were me, I'd continue to make payments on it until you replace the loan with a new one.

I lost 15 points when I paid off my auto loan (it was my only installment line of credit).