topic do i have a chance ? in Auto Loans

do i have a chance ?

Anonymous — Wed, 11 Jan 2012 21:11:34 GMT

hello everyone,

i am intrested in purchasing a 2012 hyundai sonata around 24,000.with out a cosigner... i would like some opinions please.

i work 30 hours a week. gross around $1600 a month.

i pay $300 a month for all my bills.

i messed up my credit when i was 19. started fixing credit in october. i have came along ways in those few months.

i have a few medical bills in collections on my report. credit score on equifax is 600

and a credit card that was charged off for $500. it should be falling off report in march

i have 2 student loans that i have never been late on. from 2004 and 2006

one best buy master card with a cl of $300. balance $7.00 never late

i also have accounts that where closed in good standing never late. including: student loans, credit cards, small bank loan.

i just started a new job 4 months ago but was at my previous job for 3 1/2 years. i left old job and started new job next day. ( not sure if that matters)

i have a down payment of $8000 plus a trade in thats in horrbile condtion. hoping to get at least $1000

thanks,

(sorry for errors, just trying to answer all questions that would be asked)

Re: do i have a chance ?

Mike360 — Thu, 12 Jan 2012 02:27:09 GMT

Based on low income and short current employment history at current job plus collections i don't believe you will get approved. if you do happen to get approved the APR is gonna be horrible.

Use that money on a nice used car.

Good luck

Re: do i have a chance ?

Revelate — Thu, 12 Jan 2012 03:42:23 GMT

Employment history is whatever: show your last two paystubs and that covers that... this isn't a mortgage. Your downpayment is excellent even without the trade-in, 1/3 on a new car, complete win.

The only issue you might have is income: you gross 1600, and you're looking at roughly a 16k note over a 5 year period and possibly around a 10% APR on a new car... which is a note of roughly $350 / month. I know you don't pay a lot in taxes, but this is a pretty big expense for your current income, and I concur with the prior poster: see about getting a cheaper used car instead. Even at 5% financing if the captive dealer lender is in a good mood, is still $300 a month, again likely too expensive. You're getting a loan of roughly the same amount as your approximate annual after-tax compensation Too much in an uncertain world.

You might well be able to get a Sonata just off lease, you may pay a little more finance wise, but you probably knock a good 5-8K off the price at the dealer, and you may still get a good finance deal from Hyundai directly, they appear to be pretty willing to deal with subprime / rebuilding credit folks. Just a swag, and this is conservative, a 2009/10 off lease, knock off 1/3 for depreciation, now you're looking at like ~$170 / month at 10%, and if you get an ugly loan like mine (19%) which is a lot more you're still only at $210, and both those numbers are a lot more defensible on your income.

One trick you might want to try, since you're rebuilding, get a 6 year loan instead of the 5, and be planning to refinance in six months to a year as your credit scores keep improving. This might save you a little on the APR, and also on a lower payment, you have more opportunity to throw extra money to pay down the principal faster, which is HUGE on a higher interest rate loan. Or any loan for that matter.