Auto Loan Rookie

[Striker1]

Hi everyone and in advance I would like to thank everyone for their great advice regarding Auto Loans. I have been lurking for awhile and now am going to ask for some advice.

I am 29, income of 51K. I have never had an auto loan. Always paid with cash and keep my vehicles around as long as I can. I have now decided I want to buy either an Acura TL or an Acura TSX. I have a few thousand saved for a down payment.

TU and EQ score mid-700s. I have no idea what my EX score is, but when checked several months ago it was the highest. No negatives ever on credit report. I do have some installment loans. A couple are student loans (pretty small payments) and I financed a ring several years ago for my fiance, which was paid off quickly.

I have been reading about blank check, credit unions, etc., but not sure where to start and not sure what to expect in terms of interest rates. I am buying used, probably 2009 or 2010. I am not in a hurry to buy a car so I have test-driven and looked around and continue to do so until a great deal pops up. I plan on financing $20-21000.

I bank with wells fargo and have a credit card with them, also have a credit card with chase. Not sure if this makes a difference or not.

Any advice would be appreciated. Thanks!

[Brian_Trying_700]

Your fine. In April I finance a 2009 BMW 328xi. My credit score then 605-610 range but I got $2500 for the trade in and $9000 down payment for 21.5%. 6 yr loan I should have waited. In your shoes for a 21k car with 3k down 5 yr loan and you credit score with what it is.  You are fine. You will be in the range of 18%. 

[Striker1]

18%? That seems awfully high. I was hoping for much less.

[Mike360]

no previous auto history will keep you from getting the best rates. i'd suggest a local cu or try the cap 1 blank check route. also would suggest 20% as down payment. let the dealer shop you around. it counts as 1 inq. within short time frame

[Revelate]

I'd be surprised if you got 18% or anywhere close to that.

A lot is going to come down to how much you have for a downpayment: I assume you're planning on a used TSX or TL if you're only planning to finance 20k or thereabouts, or you're talking 10k downpayment as being a few thousand?  (FWIW I like your style, I was looking at either a used TL or a used/new TSX, wound up getting a 2010 TSX, mucho happy!).

Even auto-enhanced as a first time buyer on a used car, you're probably talking about mid-600's or low 700's, and that's not 18%.  

I would apply for a loan with Chase, they recently offered someone on this forum an astonishingly good rate with a weaker credit history than yours.  Wells may be an option, but their APR may well be semi-high.  Any CU's you have a membership with are also good candidates, and there's always dealer financing.  Honda Financial tends to look for gold-plated people, but you may be qualified with them from your scores under a first-time buyer program.

I don't think you're going to have much trouble, especially if your downpayment is solid; you just will need to shop around till you get a good rate, and you might be able to get one in the 3-5% range if you find a lender willing to work with you.  As always YMMV with rate shopping.

[Striker1]

I guess I wasn't expecting a drastic score drop. I figured with some installment loan history that it wouldn't drop too much. I guess I'll be shopping around and my scores are about to get a bump so that should help. They're right around 750.

[Revelate]

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@Striker1 wrote:
I guess I wasn't expecting a drastic score drop. I figured with some installment loan history that it wouldn't drop too much. I guess I'll be shopping around and my scores are about to get a bump so that should help. They're right around 750.

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They may not, but you didn't post that originally

Am sorry I made the assumption that you only had revolving debt.  When you're ready to buy go ping some lenders, if your scores are around 750 you may well still be in the 720+ category in which case you're talking top tier basket from most captive lenders.  Until you know though what the score is, we're all just making guesses and unfortunately auto-enhanced scores aren't very well known; however, sometimes there can be a substantial drop in points (50 or higher) from the usual scores we can obtain for first-time buyers.

[Striker1]

THanks for the input. I may try wells Fargo since I have been with them for such a long time. I guess I should have also mentioned that I do have a mortgage. Ive also looked in to the blank check f rom capital one but have also read horror stories. I guess that goes with just about any lender though lol.. There's good and bad I guess.