topic Re: Options for Auto Loan in Auto Loans

Options for Auto Loan

Anonymous — Mon, 30 Apr 2018 21:55:51 GMT

I'm looking at needing to get a car, which I wasn't planning to do for a few months, but need to do in the next two weeks.

I'm asking about options because my first instinct was to go to a buy here/pay here but after reading more on here I realized I may be jumping the gun.

My Fico8 Scores are currently in the 550/560 range, but will be changing in the next 7 days which is why I didn't list them. I wasn't planning to do this for a couple more months, but financially my current vehicle is just not meeting my needs.

I am waiting until end of this week or first of next week after Capital One and Credit One Report. I have 3 cards with a combined CL of $800. Two of those cards totaling $600 were opened 2 payments ago and the new QS One should report this statement period with a high utilization (under limit) and paid on time as well. The other two should report with a low or $0 balance, countering some of the damage I did last month when the new Credit One card posted over limit by $80.

I also intend to switch to monthly scores with MyFico after that so I can see my scores before I got to get the loan, providing I have the chance of getting it.

Now history is $30k in defaulted student loans currently in rehab and over 5 years. One Capital One Platinum Secured $200 CL, 10 months paid on time, one Capital One QS One, 1 month paid on time (may post as 2 months), and one Credit One 2 months paid on time. All 3 cards will be on my report as of this month.

I have one collection remaining on TransUnion for $150. I intend to deal with it this week, but I doubt it will be removed before I need to get the car. Past that I have some 5 year old paid charge offs, and a PIF account from Aaron's showing.

I do not want to put a lot down, no more than $1,000 preferably around $500, and I'm looking between $7k and $20k (used to CPO).

The kicker is I also recently did a major move (500 miles).

Any advice? I'm prepared to do a buy here/pay here I would just like to see if I have better options.

Re: Options for Auto Loan

sccredit — Mon, 30 Apr 2018 22:58:50 GMT

Have you tried the CapOne auto prequal? You might be surprised.

Re: Options for Auto Loan

Anonymous — Mon, 30 Apr 2018 23:03:56 GMT

I did 7 days ago and was not pre-qualified. My CreditWise score is bad, at 499 for a Vantage. It took a bigger hit than my Fico scores due to the new card and overlimit. I'm not sure how much that will bounce back in the next week when the cards all report.

Re: Options for Auto Loan

Anonymous — Mon, 30 Apr 2018 23:08:22 GMT

Check carvana.com they use FAKO scores and show your rate and monthly payment. Some people have had luck on there.

Re: Options for Auto Loan

Anonymous — Mon, 30 Apr 2018 23:29:09 GMT

So they said 20% interest and a $350 monthly payment and I'm okay with that.

Except for the fact that the vehicles I want are priced higher than I can get them elsewhere and they want an outrageous down for them.

Re: Options for Auto Loan

Anonymous — Mon, 30 Apr 2018 23:31:08 GMT

@Anonymous wrote:
So they said 20% interest and a $350 monthly payment and I'm okay with that.

Except for the fact that the vehicles I want are priced higher than I can get them elsewhere and they want an outrageous down for them.

Try again in 7 days when your scores update!

Re: Options for Auto Loan

Anonymous — Tue, 01 May 2018 01:03:47 GMT

@Anonymous wrote:
@Anonymous wrote:
So they said 20% interest and a $350 monthly payment and I'm okay with that.

Except for the fact that the vehicles I want are priced higher than I can get them elsewhere and they want an outrageous down for them.
Try again in 7 days when your scores update!

Well what that told me is I should be able to get what I want with the down I want (which is around $500 or less). I'm looking at Subarus due to the miles I'm putting on and will be putting on. I'll probably be hitting 18k to 20k a year and I want something that will hold up. Plus I will be going from Eugene, OR to either Baker City or Vale about 10 times a year so I want the AWD for winter trips.

I'm going to wait for my credit to update, it isn't that long now. All cards should post by the first of next week, the only one in question post date is the QS One but my second statement just cut sow it should post anytime.

But that definitely helped me in decision making. I know I can likely get what I want, it's just going to be an interest rate game but I may just make 6 months of payments and refinance it.

Re: Options for Auto Loan

pipeguy — Tue, 01 May 2018 04:43:05 GMT

@Anonymous wrote:
So they said 20% interest and a $350 monthly payment and I'm okay with that.

Except for the fact that the vehicles I want are priced higher than I can get them elsewhere and they want an outrageous down for them.

I understand where you are coming from but NO ONE should ever be okay with a 20% apr used car loan. My suggestion would be to pay cash for an old Honda or Toyota and live with it for 6 months while you improve your scores before you "trade up". Being okay with a 20% vehicle loan is thanking someone for robbing you (IMO of course).

Re: Options for Auto Loan

Anonymous — Tue, 01 May 2018 22:17:05 GMT

@pipeguy wrote:
@Anonymous wrote:
So they said 20% interest and a $350 monthly payment and I'm okay with that.

Except for the fact that the vehicles I want are priced higher than I can get them elsewhere and they want an outrageous down for them.
I understand where you are coming from but NO ONE should ever be okay with a 20% apr used car loan. My suggestion would be to pay cash for an old Honda or Toyota and live with it for 6 months while you improve your scores before you "trade up". Being okay with a 20% vehicle loan is thanking someone for robbing you (IMO of course).

Being ok with a 20% car loan for 6 months, then refinancing, and knowing I'm in a dependable vehicle to transport my son an average of 400 miles 10 times a year is worth it's price.

There are a lot more important things than paying 20% interest and not being stuck on the road with my 10 year old son is one of them.

But I'm doing this with the intent to refinance and will not just take a 20% offer. I want to shop around now that I've read some more. Based on $30k annual, with my scores I should be able to get at least 17% from everything I'm reading.

And from what I understand adding the auto loan with my 3 CC should be a pretty good boost to my credit so after 6 months a refinance shouldn't be too difficult.

It's not that I wouldn't be ok with an older vehicle, but the high miles is what I'm dealing with on my Durango. That would be ok if I was just driving local but I don't even trust it to go 400 miles right now and an old sub $1k car won't be any different unfortunately.

Re: Options for Auto Loan

Anonymous — Wed, 02 May 2018 14:45:53 GMT

Be careful with your "intent to refinance" a 20% loan.

What many folks don't realize is that lenders are only going to refinance your vehicle for what it's worth. You are generally going to be way underwater with a 20% loan, and when the time comes to finance you will need the cash to make up the difference. If you don't have a few thousand $ or whatever it is, you are stuck like Chuck with that 20% loan.

Taking a loan with these terms is nowhere near a sound financial decision no matter how you think you're justifying it. It's financial suicide.

Get a AAA membership for like $70. I do this when my cars reach a certain age and they are there in half an hour if something happens.

Alternatively, have you considered just renting a car for those trips w/ your son? To do that 10 times a year is way cheaper than getting a bad car loan. I have many friends and family that drive clunkers around town since they're never going more than a few miles. If they need to travel a few hours, they just rent a car.

Re: Options for Auto Loan

Anonymous — Wed, 02 May 2018 16:01:40 GMT

Steeler is right - be really careful with the "refi after 6 months" idea, because it may not turn out like you hope. My brother did the exact same thing - credit wasn't great, needed a decent car, and accepted the 18% interest rate with good intentions to refi. When the time came (6-8 months later) to refi, nobody would touch it because he was so far underwater. He was stuck with the car and miserable about it.

On the flip side, renting a car is a good idea - I do that myself. I have an '09 Kia Sportage with about 100K miles on it that I drive to work and around town. My commute is maybe 15 min each way, so no worries (and I have AAA). I rent a car for longer weekend trips and vacations. I have a membership card for Enterprise, and they are really good about coupons and earning free days. If you are renting a car 10 times a year, you will definitely rack up the membership points and start earning free days, so something to consider.

Re: Options for Auto Loan

Anonymous — Wed, 02 May 2018 21:51:08 GMT

I understand what people are saying about the 20%. I did check into the car rental. It would need to be 2 days, and it's about 1,000 miles. So about $50 per trip or $100 per month. Although better fuel mileage, it doesn't solve the problems with the Durango which is what I would be driving, or the cost of another vehicle. So either of those are $1,000 options vs $500 down which is one factor I am looking at.

Every Sub $1k vehicle I have purchased has needed work before I would consider it dependable. This has nothing to do with appearances, it has to do with properly maintaining a vehicle, and in many cases catching up maintenance. I realize even just throwing away $1,000 may be less than the interest, but it doesn't changed peace of mind when driving. Just the knowledge that you know you will get from Point A to Point B without breaking down or being stuck on the road is worth a lot to me.

As for the refinancing I am good about buying cars. It may be something I like, but if it's overpriced I will walk away and I usually walk away if it's at retail. One of the reasons I appreciate a Subaru in this instance is that they don't depreciate heavy so it would likely be February before I saw any real depreciation, which is about the time I would be looking to refinance since my student loans would be rehabbed and I would have a tax return coming to pay it down during the refinance, regardless of where the value is for the refinance, and lower the payments even further.

I will state I'm leary of even taking on a car payment, but after over 10 years of having problem cars I'm over it. I don't want to spend anymore on a problem vehicle. All they do is create problems for me. I do want to keep my Durango, but as a toy, not something I need to rely on (although it has never left me on the side of the road, but it's getting close).

I won't know much more until Saturday as that is when I expect my two CC to update and then I want to switch to the monthly on MyFico so I can pull my current auto scores before I do this.

Re: Options for Auto Loan

Anonymous — Wed, 09 May 2018 20:12:14 GMT

Just to update this. My Fico Auto Enhanced scores came in at 626 (equifax), 599 (transunion), and 621 (experian).

I was offered 16% on a 15k car with $500 down over 72 months, but it wasn't the car I wanted. The car I wanted they actually had trouble getting me financing on and I stopped for a reason.

My Durango went down while I was looking at cars, I lost the PCM (computer). I have a new one on the way and will replace it (I typically do a lot of my own work). Many of the issues that had me questioning it may be resolved meaning I can wait, and waiting is my best optoin.

MyFico says I should be sitting around 12% right now, but I was offered anywhere from 16% to 20% and most of that on cars that weren't what I want. I'm within reach of a 650 credit score if I'm careful and make sure all cards report with a $0 or low balance. A 650 score could net me an 8% rate on what I do want, but being in the area longer will get me the 10% rate. And 10% is a lot different than 16% or 20% on a $11,000 to $15,000 car. And I was told by a local credit union they could probably get me 13%, but at that point I had already kind of decided I would be better off to wait.

I understand what was being said, but at that time I was honestly expecting my Durango to die in a way I couldn't fix it. I was looking at walking when I need to have a vehicle regardless, and I need something I can trust.

I think the Durango dieing like it did showing me what was wrong made my decision for me. I still want a vehicle, and my credit could really use an auto loan, but right now if I wait I've learned it will be easier to get what I want, and not what the dealer wants to sell me.

Re: Options for Auto Loan

Anonymous — Thu, 10 May 2018 13:14:27 GMT

@Anonymous wrote:
Just to update this. My Fico Auto Enhanced scores came in at 626 (equifax), 599 (transunion), and 621 (experian).
I was offered 16% on a 15k car with $500 down over 72 months, but it wasn't the car I wanted. The car I wanted they actually had trouble getting me financing on and I stopped for a reason.

My Durango went down while I was looking at cars, I lost the PCM (computer). I have a new one on the way and will replace it (I typically do a lot of my own work). Many of the issues that had me questioning it may be resolved meaning I can wait, and waiting is my best optoin.

MyFico says I should be sitting around 12% right now, but I was offered anywhere from 16% to 20% and most of that on cars that weren't what I want. I'm within reach of a 650 credit score if I'm careful and make sure all cards report with a $0 or low balance. A 650 score could net me an 8% rate on what I do want, but being in the area longer will get me the 10% rate. And 10% is a lot different than 16% or 20% on a $11,000 to $15,000 car. And I was told by a local credit union they could probably get me 13%, but at that point I had already kind of decided I would be better off to wait.

I understand what was being said, but at that time I was honestly expecting my Durango to die in a way I couldn't fix it. I was looking at walking when I need to have a vehicle regardless, and I need something I can trust.

I think the Durango dieing like it did showing me what was wrong made my decision for me. I still want a vehicle, and my credit could really use an auto loan, but right now if I wait I've learned it will be easier to get what I want, and not what the dealer wants to sell me.

and easier to get what you want at a decent rate if Old Faithful hangs on just a little while longer

Glad you're putting some good thought into this. Try not to go 72 months on any loan. It's another recipe for being underwater unless the interest rate is 0% or waaaaay low.