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Ok so Im going to start off by stating that my credit score is a (550) - this is new credit im just turning 18 and the only thing on my credit is me paying back 875$ of my last year student loans.
I have been at dealerships looking at cars for the past two week & I have looked at a few places like carvana, carmax, but their intrest rates are super high (25%) with about a down payment of 2300. I was looking specifically at a mercedes-benz cla class 250 at the mercedes dealership and they only wanted 19,000 for it.
He claimed he would match the price of 17,600 because thats the price i seen at another dealership just out of town. I dont have a co signer for the car so im needing any advice for who to apply to for financing for the benz. I have only applied to carvana but Im sure in about two weeks im going back to the dealership and hoping to get the car i looked at. I just dont know who to go apply for the auto loan with.
Im going to start on my credit this month but im wanting the car for sure in about two weeks. Im willing to put down about 1200 but first i need to get approved without a cosigner for the loan.
my payment history is 100% perfect because i have payed off the 875$ so hopefully thats a plus
ANY ADVICE HELPS THANKS.
Listen many of us now realize that if we were more prudent with car purchases over the years we would be in a much better financial situation than we are today. Car after car after car was one of my biggest mistakes.
I estimate that if you finance for 7 years your payment would be $455 and depending on the year and mileage that may not be a smart idea to finance for that long but a shorter term will mean a higher payment.
It will also take you a long time to be right side up on the loan meaning that you will not be able to sell or trade in the car for several years because you will owe more than it's worth for a long time.
I know you want a car, maybe even need one but please look at the numbers. Can you afford $455 a month minimum plus gas plus insurance? Now please take 1 piece of advice prove that you can. Take that $455 payment and put it in the bank each month for 3-6 months. If you have to touch that money or can't save it then you can't afford this. If you do save it you have a nice cushion should something happen or more money to put down on the car which could potentially lower your interest rate.
4 years ago because of divorce when my oldest turned 17 I gave her my nice convertible she needed to be safe and have reliable transportation and all I could afford was $5,000 and bought an old high mileage car from a friends used car lot. It was a little humbling but not as bad as 6 years ago at the start of the divorce process I lost my Supercharged Mustang Cobra and needed a car immediately and bought a $900 sh&t kicker 1987 Pathfinder. I drove that car for a month or two until I could get something nicer and newer. If I did this in my 40's then at 18 you can drive what you can afford. I'm not saying you can't afford that Mercedes but it seems foolish at 18 to lock yourself into $455 a month for 7 years. Are you going to go to college? How are you paying for that? Are you commuting? If not are you allowed to have a car on campus the first year?
Remember fight temptation and just because you can doesn't mean you should.
The last thing I want to say you wont' like but i am giving fatherly advice. Why do you want a Benz? Who are you trying to impress? What is it 7 years old with 75K Miles? Do you know how expensive those are to maintain? Do you know how much it costs to replace one of their HID headlamps? I see so many young people driving old unreliable BMW 3 series (not knocking car) because they "need" the status symbol. Seriously for what you are spending there is a laundry list of brand new cars you could get. Honda Civic, Mazda 3, Hyundai Accent, various Kia's come to mind without blinking. I am not in any way suggesting brand new for you (it's also harder to finance new vs used because of the depreciation) but if you can get a brand new Civic for under $20K. How much is a cerfitied pre-owned one with 30,000 miles on it - guessing 14K or less but I don't know. Just remember if you need a car you need a reliable car and lower mileage, newer, reliable, lower cost to maintain is far more important than a status symbol. Learn from my mistakes and please read this again and again.
If you take that 7 year loan you will be 25 years old before it's paid off. Where are you living? Will you want to get an apartment? Will it really have been worth it to get that Mercedes?
I know you are saying to yourself by then you will have a great job and be making good money and can afford more. I certainly don't know you or your situation but you may never have more disposable money than when you are living at home for free. You may not pay for food, clothing, rent... Again I don't know you but ask anyone on this forum once you move out the expenses don't end.
Listen many of us now realize that if we were more prudent with car purchases over the years we would be in a much better financial situation than we are today. Car after car after car was one of my biggest mistakes.
I estimate that if you finance for 7 years your payment would be $455 and depending on the year and mileage that may not be a smart idea to finance for that long but a shorter term will mean a higher payment.
It will also take you a long time to be right side up on the loan meaning that you will not be able to sell or trade in the car for several years because you will owe more than it's worth for a long time.
I know you want a car, maybe even need one but please look at the numbers. Can you afford $455 a month minimum plus gas plus insurance? Now please take 1 piece of advice prove that you can. Take that $455 payment and put it in the bank each month for 3-6 months. If you have to touch that money or can't save it then you can't afford this. If you do save it you have a nice cushion should something happen or more money to put down on the car which could potentially lower your interest rate.
4 years ago because of divorce when my oldest turned 17 I gave her my nice convertible she needed to be safe and have reliable transportation and all I could afford was $5,000 and bought an old high mileage car from a friends used car lot. It was a little humbling but not as bad as 6 years ago at the start of the divorce process I lost my Supercharged Mustang Cobra and needed a car immediately and bought a $900 sh&t kicker 1987 Pathfinder. I drove that car for a month or two until I could get something nicer and newer. If I did this in my 40's then at 18 you can drive what you can afford. I'm not saying you can't afford that Mercedes but it seems foolish at 18 to lock yourself into $455 a month for 7 years. Are you going to go to college? Yes i am actually in college on the pre med route going to school to be a doctor, The reason im wanting to get a car is so it can be paid off by time I go to medical school
How are you paying for that? I have scholarships Are you commuting? I uber and lyft to school If not are you allowed to have a car on campus the first year? Yes we are allowed to have a car on campus.
Remember fight temptation and just because you can doesn't mean you should. - NOTED
The last thing I want to say you wont' like but i am giving fatherly advice. Why do you want a Benz? I wasnt actually looking for a benz i was just doing some basic car shopping and came to love the mercedes benz cla class Who are you trying to impress? Literally no one i just really like the car What is it 7 years old with 75K Miles? No its a 2015 with 28,000 miles and it still hasnt warrany up to 60K miles and im going to extend it to 100k miles if i get it. Do you know how expensive those are to maintain? I know it can be very expensive Do you know how much it costs to replace one of their HID headlamps? Theyre pretty expensive but affordable. I see so many young people driving old unreliable BMW 3 series (not knocking car) because they "need" the status symbol. Seriously for what you are spending there is a laundry list of brand new cars you could get. Honda Civic, Mazda 3, Hyundai Accent, various Kia's come to mind without blinking. I am not in any way suggesting brand new for you (it's also harder to finance new vs used because of the depreciation) but if you can get a brand new Civic for under $20K. How much is a cerfitied pre-owned one with 30,000 miles on it - guessing 14K or less but I don't know. Just remember if you need a car you need a reliable car and lower mileage, newer, reliable, lower cost to maintain is far more important than a status symbol. Learn from my mistakes and please read this again and again.
If you take that 7 year loan you will be 25 years old before it's paid off. Where are you living? Im going to college from home right now Will you want to get an apartment? Nothing soon I dont think I will move until senior year my parents think i should go to school from home espicially if i get a carnote. Will it really have been worth it to get that Mercedes? I will most definitley take all of your advice and look into newer cheaper cars .
One question you didnt answer was though is it going to be hard to get it financed since im just starting my credit- my credit age is only 4 months
THANKS SO MUCH FOR ALL THE ADVICE
Good answers it seems you have a better plan than I thought.
Couldn't answer about chances without knowing income and length of employment.
2015 CPO MB with warranty is better than I thought it would be new is just an option.
I think captive lenders may give you a shot at a reasonable rate like Ford - not suggesting a Ford just saying I know Ford has in house financing. Mazda uses Chase and might be tougher. I have no idea about MB or most other companies.
You can try the Capital One Auto Navigator to see if you are pre-approved.
If your parents have good credit maybe they can make you an autorized user on an old credit card of theirs. That will help as soon as it reports (so within 30 days). They don't have to give you the card they can shred it but it should help as soon as it reports.
All auto inquiries in a period of time (I forget) count as 1 so apping a couple of times is not that bad.
Check pre-approvals with Discover, Cap1 google it for their sites.
If no pre-approval get that secured card ASAP it will help as soon as it reports.
Found this list of some captive auto financing:
https://www.supermoney.com/2018/01/captive-auto-lenders-best-captive-auto-financing/
Website agrees:
PROS
UPDATE: I found the car that I want for sure but I found out about two weeks ago that Credit Karma has been giving me the incorrect and way off credit scores. My Experian is 649 TransUnion is 624. do you think it'll be a little easier to get a car loan and I was approved at Carvana with zero down on the Benz with a 9% interest rate with expectations to refinance in about 7 months. oh and do you recommend any credit cards for my credit score to get to building my credit?
As far as cards, I would recommend that you apply for the Discover IT student card. They have rotating 5% categories and double your cash back the first year.
The Mercedes sounds like a good car but do further homework. Get full coverage insurance quotes for cars you are considering. Take a look at a Honda Civic, for not much more you could have a brand new car. In addition you can get an 8 year 120,000 mile warranty for the Civic for about $1,000. That could get you through medical school.
Live at home as long as you are welcome and save the money for the future.
Good luck
I will most definitely look into the hondas and I applied to the discover it credit card earlier and the didn't approve me im not sure why.. I am a college student and i did include that in my application and no luck
@Anonymous wrote:UPDATE: I found the car that I want for sure but I found out about two weeks ago that Credit Karma has been giving me the incorrect and way off credit scores. My Experian is 649 TransUnion is 624. do you think it'll be a little easier to get a car loan and I was approved at Carvana with zero down on the Benz with a 9% interest rate with expectations to refinance in about 7 months.
CK is not giving you incorrect scores. It is giving you correct Vantage scores, which are not widely used. Unfortunately nobody caught that in your earlier post and pointed it out to you, it is well known here.
It's good that your FICO scores are higher, and that you know that now. You seem set on the MB, and they are nice cars, but like most German luxury brands, maintenence costs can be pretty steep, so be prepared for that.