topic Re: First Auto Loan After Rebuilding Credit in Auto Loans

First Auto Loan After Rebuilding Credit

rdtech — Thu, 03 Mar 2011 21:01:56 GMT

Hello,

I've been rebuilding my credit using all the info here since 2008. Now I want to look at getting an auto loan

I'm just wondering if anyone has had luck with a going into a dealer and successfully financing a 30K car with a profile similar to mine. Only baddies I have are 2 charge offs from 2005. The good I have are 2 secured credit cards opened 6/08, MetaBank account opened 12/09, 2 store cards opened 11/10, BestBuy Gold MasterCard opened 11/10 all with perfect payment history. Never had an auto loan or any other installment loan.

All cards are reporting a $0 balance except for 1 which is reporting $1 balance. Scores should be listed below and current as of today. TU should go up again once HSBC repots to TU. I will buy TU and update that in a few days hopefully with an updated balance from HSBC.

I make $70K per year and can put down 10%-15%

Just want to know if anyone has had luck with similar profile like mine. I spoke with a credit union that I am with today and based upon their requirements I won't get approved through them so I have to rely on delaer financing.

Would love to listen to all opinions.

Re: First Auto Loan After Rebuilding Credit

Anonymous — Thu, 03 Mar 2011 21:37:46 GMT

@rdtech wrote:
Hello,

I've been rebuilding my credit using all the info here since 2008. Now I want to look at getting an auto loan

I'm just wondering if anyone has had luck with a going into a dealer and successfully financing a 30K car with a profile similar to mine. Only baddies I have are 2 charge offs from 2005. The good I have are 2 secured credit cards opened 6/08, MetaBank account opened 12/09, 2 store cards opened 11/10, BestBuy Gold MasterCard opened 11/10 all with perfect payment history. Never had an auto loan or any other installment loan.

All cards are reporting a $0 balance except for 1 which is reporting $1 balance. Scores should be listed below and current as of today. TU should go up again once HSBC repots to TU. I will buy TU and update that in a few days hopefully with an updated balance from HSBC.

I make $70K per year and can put down 10%-15%

Just want to know if anyone has had luck with similar profile like mine. I spoke with a credit union that I am with today and based upon their requirements I won't get approved through them so I have to rely on delaer financing.

Would love to listen to all opinions.

In all honesty you are going to be very challenged even at a dealer. I have no idea what your debt/income is but:

1- do you really need a 30K car? A truck- I can see if you need one for work, or an SUV if you need it to fit the family, but....there is no 30K car that someone "Needs"

2- you probably need more money down

Re: First Auto Loan After Rebuilding Credit

Anonymous — Thu, 03 Mar 2011 21:42:34 GMT

Hello,

I puchased a car last year with high interest of 17% which, was a car that I needed and not wanted. My fico was like 574 and back then I had 2 charge offs and 2 collections paid. One year later, still showing baddies from last year, I decided to go get what I needed and wanted as I improved my score to 650, was approved for with not the best interest but better 9%. So its possible! Good luck!

Re: First Auto Loan After Rebuilding Credit

rdtech — Thu, 03 Mar 2011 21:55:08 GMT

usmc58555,

I'm glad you chimed in! Your posts are always blunt and straight to the point which is just what I'm looking for...

To answer your questions and play with this a little bit, I don't "need" a $30K car, it's more that I want it . Reasons being are that I feel I make more than enough money to afford a $30K car. In fact, I'm getting a pay increase in a month or so as well. I'm not sure what is factored into DTI, but I have very little debt. My CC's are paid off, my rent is $400 per month (live with roomate) cell phone, my part of utils, other expenses is under $600 per month. Actual take home pay after tax varies from $4050-$4300 per month so I have plenty left to accomdate a car payment.

If the downpayment were say 20% what do you think? I definetly understand that with enough money down I can get financed, but want to put the least down that I can get away with.

Would love for you to chime in again or any others.

Re: First Auto Loan After Rebuilding Credit

rdtech — Thu, 03 Mar 2011 21:58:53 GMT

ceva02,

Thanks for your reply!

I'm very happy that things worked out for you and you were able to get your car loan. Also appriate the kind words.

I def understand that I wont get the best rates, but I don't want to buy something I don't like. If I'm going to buy a car and have to make payments on it, it's going to be something I want to get

Even with bad rates, I can attempt a refi in a year or so and see what happens.

Re: First Auto Loan After Rebuilding Credit

Anonymous — Thu, 03 Mar 2011 21:59:17 GMT

@rdtech wrote:
usmc58555,

I'm glad you chimed in! Your posts are always blunt and straight to the point which is just what I'm looking for...

To answer your questions and play with this a little bit, I don't "need" a $30K car, it's more that I want it . Reasons being are that I feel I make more than enough money to afford a $30K car. In fact, I'm getting a pay increase in a month or so as well. I'm not sure what is factored into DTI, but I have very little debt. My CC's are paid off, my rent is $400 per month (live with roomate) cell phone, my part of utils, other expenses is under $600 per month. Actual take home pay after tax varies from $4050-$4300 per month so I have plenty left to accomdate a car payment.

If the downpayment were say 20% what do you think? I definetly understand that with enough money down I can get financed, but want to put the least down that I can get away with.

Would love for you to chime in again or any others.

In all honesty buying a car that you "want" vs "need" is OK, but in your circumstance, the only thing I would recommend considering is if you have a 6-9 month emergencey fund, and have set up your Retirement planning, then you are OK.

But lets be honest here: If you have a free and clear of $3000+ a month you need to be putting more then a token 10-15% down.

buying a wants not a need I think you need to put more down as close to 50%. And in your case that amount will def get you financed at a good rate.

Re: First Auto Loan After Rebuilding Credit

rdtech — Thu, 03 Mar 2011 22:28:36 GMT

usmc58555,

You make some very good observations and points!

The 6-9 month emergency fund I 100% agree with. TBH, I don't quite have that as I'm siting around maybe 3 months pay saved. I could easily fix this and probably should do so... I'm dumping money into the 401K each pay period so retirement is moving along.

You are right about the downpayment. Closer to 50% would prob be ideal if I was patient to save and was not aflicted with the instant gratification disease...

I guess my logic is that if I get it now, I could always double up on the payments later and pay it down quicker. Probably not the best way to think

In another week or so, I'm going to talk to a few dealerships and see what they think. I owe it to you to let you know the outcome and will certainly post again.

I could bounce this around with you all day as you have many good points, but I don't want to consume all your time. Thanks alot usmc58555!

Re: First Auto Loan After Rebuilding Credit

Anonymous — Thu, 03 Mar 2011 22:42:06 GMT

@rdtech wrote:
usmc58555,

You make some very good observations and points!

The 6-9 month emergency fund I 100% agree with. TBH, I don't quite have that as I'm siting around maybe 3 months pay saved. I could easily fix this and probably should do so... I'm dumping money into the 401K each pay period so retirement is moving along. 401Ks ARE FINE BUT CASH IN LIQUID ASSETS IS VERY IMPORTANT, YOU NEED TO MAKE THAT EFFORT.

You are right about the downpayment. Closer to 50% would prob be ideal if I was patient to save and was not aflicted with the instant gratification disease... INSTANT GRATIFICATION IS WHAT CAUSED YOU TO NEED TO REBUILD CREDIT- YOU OWE IT TO YOURSELF TO FIGHT THAT MONSTER.

I guess my logic is that if I get it now, I could always double up on the payments later and pay it down quicker. Probably not the best way to think NO ONE EVER DOES THAT, THEY JUST ROLL THAT NEGATIVE EQUITY INTO THEIR NEXT WANTS CAR PURCHASE

In another week or so, I'm going to talk to a few dealerships and see what they think. I owe it to you to let you know the outcome and will certainly post again. I HIGHLY RECOMMEND THAT IF YOU HAVE JUST REBUILT YOUR CREDIT YOU CHALLENGE YOURSELF TO MAKE A GOOD DECISION NOW

I could bounce this around with you all day as you have many good points, but I don't want to consume all your time. Thanks alot usmc58555! YOU ARE WELCOME

CAPS LOCK KEY WAS ENGAGED, DID NOT SEE IT TILL AFTER I POSTED AND JUST TOO DARN TIRED TO RE-TYPE