Auto loan for 30k possible?

[Anonymous]

Hello everyone. I have been using equifax's website to check my scores, and as of now they are eq 712 tu 728 ex 729. I Just now checked my FICO for equifax only here and it is 736. That confuses me. But my downfall seems to be only having 2 years of credit history, no previous auto loans or mortgage. Is there any way possible to get an auto loan for anywhere from 28k-33k??? I have been employed at the same job for 3 years now, steady income, no missed payments ect.

[Lel]

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@Anonymous wrote:

Hello everyone. I have been using equifax's website to check my scores, and as of now they are eq 712 tu 728 ex 729. I Just now checked my FICO for equifax only here and it is 736. That confuses me. But my downfall seems to be only having 2 years of credit history, no previous auto loans or mortgage. Is there any way possible to get an auto loan for anywhere from 28k-33k??? I have been employed at the same job for 3 years now, steady income, no missed payments ect.

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Hello, and welcome to the FICO Forums.

The first thing that you should know is that there are a lot of different credit scores that can be obtained from a variety of websites, but these are not FICO scores (with a couple exceptions).  The scores that you got from the Equifax website are not FICO scores, but are rather a proprietary credit scoring formula developed by Equifax.  These scores may not reflect your true FICO scores at all.

The second thing to know is that for auto purchases, many auto lenders use an automobile industry-specific FICO score, which gives added weight to prior auto loans.  The fact that you do not have a prior auto loan doesn't mean that your auto industry score is nonexistent or bad, it just means that it can't use any auto loan data when the score is calculated.

As for whether you can get approved with a score of 729, I'd have to say that the score itself would appear to be sufficient.  But there are a lot of other factors that go into any loan approval.  Your steady job history is a positive factor, but if your income is only $20,000 a year (for example), then a loan of ~$30,000 may not be forthcoming.  Also, if you have a lot of credit card debt, that could weigh on your approval chances.

[Anonymous]

O OK, I see. 25,600 is roughly my gross income. I have a 1% credit/debt ratio though. I've been told by one company that because I don't have 36 months of previous auto loan history, it will not go through

[p-]

You do realize you could be looking at 600 dollars or more for car payment, right?  I'm not sure what your take-home is, but it could be up to half.  That's a lot.  Lenders might not be willing to give you that much, especially if you have other expenses like rent.  

30k for a car at your income level is quite a bit of money, you might consider looking at something less expensive.  If this is new, see if you can find a deal on a low mileage used of the same model.  Or even consider financing something in the 7k to 10k range, paying it off in a year, then going for the larger loan once you have a history.

If you are insistent on buying the 30k car, I recommend you put this idea on hold for 3 months or so, and try putting that amount into savings and don't touch it.  See if you can get by without it, then use the money you saved as a down payment.

Be careful what you commit to, or you could find yourself with a repo.

[Anonymous]

Yessir, Right now, found one car for 25k, and one for 26k. Currently about to apply for a 27k loan. 487$ a month is the rate they have set for the 27k Which is very manageable for me

[Lel]

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@Anonymous wrote:

O OK, I see. 25,600 is roughly my gross income. I have a 1% credit/debt ratio though. I've been told by one company that because I don't have 36 months of previous auto loan history, it will not go through

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What kind of car?  Have you factored in the insurance rates on the vehicle?

Not having 36 months of previous auto loan history will not kill an auto purchase.  How could anyone finance their first car if this really were a requirement?

[Anonymous]

If you are grossing $25,600 a year, you are taking home roughly $19,200 a year or $1,600 a month.

1- You probably will not get financed due to the percentage of how much of your take home/gross the payment will be.

2- You may have low debt or obligations now, but that is not expected to be static for the 5-6 years you have a loan.

3- Yes because you do not have a previous auto loan history and are looking for such a large amount financed and a monthly payment that is why you were declined.

4- If you live at home with parents and pay no rent it is not as favorable a thing as you may think. To a lender that means that your living situation is at the pleasure and sufferance of another. Your parents could become unemployed and need to move, their house could be on the path to foreclosure as you are applying, they could kick you out 4 months after you get the car. 

5- Lets do the math: $1,600 a month minus $580 for car payment, minus $120 for car insurance, minus 200 for gasoline and maintenance takes us to $900 a month leaving you with 700 a month to "live" on. If you are not living with family you are looking at $700 to pay rent/eat and live off, and thats not sustainable.

You are trying to buy too much car. There is no $25,000-$30,000 car that anyone needs. You need to be looking for something new that starts between $19K-$21K at the most, preferably lower after rebates and incentives, or something one year old used that will be no more then $15K

You have to crawl before you can walk. You are trying to buy too much car. Now if you could walk into a 28K vehicle putting $10,000 down, Ok you can get it all you want.

[p-]

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@Anonymous wrote:

If you are grossing $25,600 a year, you are taking home roughly $19,200 a year or $1,600 a month.

1- You probably will not get financed due to the percentage of how much of your take home/gross the payment will be.

2- You may have low debt or obligations now, but that is not expected to be static for the 5-6 years you have a loan.

3- Yes because you do not have a previous auto loan history and are looking for such a large amount financed and a monthly payment that is why you were declined.

4- If you live at home with parents and pay no rent it is not as favorable a thing as you may think. To a lender that means that your living situation is at the pleasure and sufferance of another. Your parents could become unemployed and need to move, their house could be on the path to foreclosure as you are applying, they could kick you out 4 months after you get the car. 

5- Lets do the math: $1,600 a month minus $580 for car payment, minus $120 for car insurance, minus 200 for gasoline and maintenance takes us to $900 a month leaving you with 700 a month to "live" on. If you are not living with family you are looking at $700 to pay rent/eat and live off, and thats not sustainable.

You are trying to buy too much car. There is no $25,000-$30,000 car that anyone needs. You need to be looking for something new that starts between $19K-$21K at the most, preferably lower after rebates and incentives, or something one year old used that will be no more then $15K

You have to crawl before you can walk. You are trying to buy too much car. Now if you could walk into a 28K vehicle putting $10,000 down, Ok you can get it all you want.

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+1

Seriously...  I just bought an used Jeep Gr Cherokee LTD with all the options.. all of them.  It only had 18k miles on it and for all intents and purposes it's a brand-new car.  It was less than 25k.  Brand new it would have been almost 50.  At your income level it makes sense to buy used, you'll get more bang for your buck.

Back when I made 25k a year I drove a 500 dollar buick.  When I got up to 30 I bought a nice used Lexus for about 8k...  that was my first car loan on my credit report.  I put 220k miles on my last jeep and will probably do the same with this.  I get all the value I can out of a car...

A car payment like that will haunt you...  Be careful what you commit to.

[Anonymous]

That puts it in a whole different perspective. Maybe I should save a handsome amount to put down. I have a daily driver already so why rush it eh? I am new to it and though my 700+ scores would net me they 470$ monthly payment they had. To be honest, the car is just for pleasure as I am a gear head. Probably wasn't going to put it on the road for a year so so after getting it

[Walt_K]

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@Anonymous wrote:

That puts it in a whole different perspective. Maybe I should save a handsome amount to put down. I have a daily driver already so why rush it eh? I am new to it and though my 700+ scores would net me they 470$ monthly payment they had. To be honest, the car is just for pleasure as I am a gear head. Probably wasn't going to put it on the road for a year so so after getting it

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If you don't plan to drive it for a year, save the payments for a year.  Or give them to me.