Any advice for a college student?

Anonymous · ‎07-20-2012

I am going to try and get my first car. My score is 674 right now. I have 5 credit cards with balances under $500 each. I plan to pay at least one off completely before going forward with this. I am looking at a 2011 Kia that is 21,000. I plan to have a down payment of around 6,000. My big question- my finace is in this with me. We are young (20 and 21) and he does not have any credit. However, he makes around 5,200 a month with only around 400 in bills. I bring home around around 1,000 a month (part-time job). We will definitely be able to handle the car payment. I am just very unsure of our ability to get decent rates, that is if we will even be approved at all! Would I be better off trying to get the loan on my own or would his income help our chances? Any advice/help would be appreciated. (Please, do not say we are too young. I am very aware of our young age!)

xiownthisplacex · ‎07-21-2012

Are you a member of a CU? If not, I would join because they are pretty aggressive on auto loan rates. Also, manufactures also have special APR for first time buyer's, usually on new vehicles. With $6k down you should be fine, it's a big down payment. More than likely your fiance will have to go on the loan because your low income (lenders like to see at least $1,800/month).

If you want to go with a used car, just make sure it's Certified because APR on certified are also lower, and you get warranty with them as well.

Anonymous · ‎07-23-2012

I know there are horror stories all the time on this site about co signing but that sounds like it would be the best option in this case. Or at least one option.

Have your fiance apply for the car loan so he can use his income, then co sign so your credit history can be used for a good rate since you have a good score. Also like the poster above recommended try to look at a certified pre owned if you can. There is ever very little reason to buy a brand new car fresh off the lot. Certified pre owned is a lot cheaper since the first owner took the depreciation hit, and it still comes with a warranty and is still relatively new.

Another option if your fiance's income is 5,200 but only has 400 in bills then why not save up a few months and pay cash for the vehicle? If you don't have any other obligations for the money that of course is the cheapest option. No loan out there can top 100% down and 0% APR.

If you are looking to finance though co signing sounds like the best option. Hopefully I have given you some ideas and other people can chime in here and build off what I said. I have never bought a new car, I drive a car that was built when Bill Clinton was president, my parents handed it down to me, and it still runs like a charm because I maintain it well and I have no intention of getting a new one anytime soon so I unfortunately can't give you any good advice based on a personal experience so hopefully some others can chime in, particularly about co signing.

OptimalFICO · ‎07-23-2012

CourtB 22,

Read my comments in the Forum link below, good info for you and addresses your question:

http://ficoforums.myfico.com/t5/Auto-Loans/How-to-find-what-I-would-qualify-for/m-p/1503820/highligh...

If you buy it together, it's the same as co-signing, except that you have rights to the vehicle. Never co-sign for anything!