topic Re: Young Auto buyer in Auto Loans

Young Auto buyer

Anonymous — Wed, 26 Aug 2009 22:44:25 GMT

Ok, for starters, I'm only 19, turn 20 next month. I just bought my equifax score and its was a 666 (yes i know). My biggest things pulling me down was of course my lack of credit history and amount of new credit. My first loan was on my 18th birthday and it was an auto loan for 7800, with a co-signer, and I have had for 2 years so i have some car credit. I then have had 4 credit cards which only 2 have a balance, and all of the balances will be payed off in the next 2 months. I want to buy a new car at the begining of next year sometime, but dont want a co-signer. The car ive been looking at is used and around 17 to 19 grand. i plan on putting down around 1500 dollars and whatever equity I make off my truck, hopefully around 2 to 3 grand. Is this even going to be possible with my lack of credit history, I mean I hope to pull my credit score up a little by then but i would like to know what any of you think and what to do in order to make it possible to buy my next car in my own name. Thanks.

Re: Young Auto buyer

Anonymous — Wed, 26 Aug 2009 23:47:09 GMT

The short answer is---maybe. A lot of this is going to deal with your current income. Also, expect an insurance jump (even with a perfect driving record) with the vehicle solely in your name, most states will require you to have your own insurance policy.

To get a better guess at financing, you will need to provide current income and time on job at a minimum. To greatly improve your odds, plan on 25% down.

Re: Young Auto buyer

Anonymous — Thu, 27 Aug 2009 00:27:56 GMT

Thanks for the input. Im aware of the insurance, i carry my own policy and have got the exact amount for the premium. I know a lot of people, (peope my age more then anything) buy cars without having clue about insurance then realize that they cant afford insurance on it. But my current time with my employer will be around 3 years when I plan to buy the car and my income, which is not great but the best i can do until I finish college is around 21,000 not including bonuses. I am going to try my hardest to pull my fico score up to a 700 before a buy the car. Thanks for the help again, its nice to have a forum to turn to for this.

Re: Young Auto buyer

Anonymous — Thu, 27 Aug 2009 00:48:52 GMT

Kylan coming from a Father that has a son older then you Congrats on everything you have accomplished...What car are you looking for?

Re: Young Auto buyer

Anonymous — Thu, 27 Aug 2009 18:43:25 GMT

Thanks for that. I'm looking to buy a Honda Civic (Si trim). Being a huge car person i knew if i wanted to have a car it would take a lot of work and since 18 I started researching this FICO system and how it works. Over time it started to intrest me highly. Ive have learned a lot by this system over the past 2 years but the one thing i have learned is the the account history part if it cant be rushed or changed in just a few months. I really apperciate that complement, it means a lot to me to know that people are out there to talk to because all my friends 19, 20 or 21 laugh when i talk abouy credit. But ill be laughing at them in 10 years when my interest rate is 3 or 4% lower on a mortgage.

Re: Young Auto buyer

Anonymous — Thu, 27 Aug 2009 18:55:16 GMT

Since you have car credit established, your only issues are really going to be income. You will need to show a minimum $1800 a month plus gross to support the car loan.

Assuming your bonus checks show on your pay stubs and your average income then proves this you are great, if not....you may have a little bit of a roadblock.

Re: Young Auto buyer

Anonymous — Thu, 27 Aug 2009 19:00:27 GMT

ok thanks. I do believe they show up.

Re: Young Auto buyer

Anonymous — Thu, 27 Aug 2009 19:02:03 GMT

Dont report your bonus checks on the app as seperate income.

Just average your last XX months gross pay (including bonuses) and enter that in the blocks, as long as your income is supported by your pay stubs you are covered.

Re: Young Auto buyer

Anonymous — Thu, 27 Aug 2009 20:50:11 GMT

OK thanks for the help. I'll do that.

Re: Young Auto buyer

Anonymous — Fri, 28 Aug 2009 16:29:45 GMT

is it just me or does anyone else think paying 17-19K for a used Honda Civic is ridiculous? In this car market, you should be able to negotiate any civic on the lot (minus a hybrid type) to that as a new cost. My Camry didn't cost much more than that new.

Also, remember that financing a new car is often easier and cheaper (interest rate wise) than a used car.

Re: Young Auto buyer

Anonymous — Fri, 28 Aug 2009 21:14:08 GMT

To make it more clear, the civic is an si. Its a little different over a normal civic. Its hondas "pocket rocket" of their cars. 197 hp, 0 to 60 on around 6.6 seconds, pulls .91g on the skidpad. Car is a blast to drive. A standard civic brand new is around 17 grand, and this car is around 23 new, so one with 15-25k mileson it thats one or two years old are usually around 17 to 19 grand.

Re: Young Auto buyer

Anonymous — Fri, 28 Aug 2009 21:21:04 GMT

Also, does anyone know if because my father cosigned for my truck, when trade in time comes, will he have to be present also? His name appears underneath mine on the registration which makes me think he is also on the title. I didn't think he had anything to do with the title because he only cosigned for the loan, but now that i see his name on registration I'm thinking different.

Re: Young Auto buyer

Anonymous — Fri, 28 Aug 2009 23:00:28 GMT

@Anonymous wrote:
To make it more clear, the civic is an si. Its a little different over a normal civic. Its hondas "pocket rocket" of their cars. 197 hp, 0 to 60 on around 6.6 seconds, pulls .91g on the skidpad. Car is a blast to drive. A standard civic brand new is around 17 grand, and this car is around 23 new, so one with 15-25k mileson it thats one or two years old are usually around 17 to 19 grand.

STOP.

have you actually talked to your insurance company about this specific vehicle?

have you made them aware of all these specifications on this vehicle?

At your age, being a male under the age of 25 your car insurance could and probably will be more then the car payment.

I think you need to rethink this.

I had more "Deals" on V8 Manual Mustangs go south not because the under 25 yo could not afford the car payment, but because he found out that the insurance would be about 1.5X the car payment. I simply started reality checking the guys first instead of wasting my time any more.

The reality was, if someone wants to pay 1100 a month for a car even at the age of 23, they are going to drive a Lexus or a Mercedes.

Re: Young Auto buyer

Anonymous — Sat, 29 Aug 2009 00:18:51 GMT

Yes. To answer your question I have checked my insurance for this car. 135 a month. I took a VIN number up of an iditical car to my insurance agent. I pay 92 dollars a month for my 2004 F150 so its not too big of a jump for the kind or car it is and my age. I mean think, how many 19 year olds you know go, and even care to pay 16 bucks to check their FICO score, not many. If I was smart and cared enough to do this. I think i would be smart and care enough to check my insurance. This purchase I have budgeted very carefully for almost a year and have put a LOT of thought about if I should or shouldnt. This is no impulse buy at all means, however it is a want and not a need, so if everything goes well, then ill have the car, if something does not go exactly how i want, then ill walk away knowing it was not the right time to make this purchase yet.