Can I get approved?

[Anonymous]

My car died on me today. I have access to a car for about a month that will get me back and forth to work, but it's not a long-term solution and I need to figure something out before October. Here's some info...

- Gross monthly income roughly 1900

- Been employed at my job for 7 months

- Rent is 500 a month

- Utilities (electric, internet, phone) -  about 85 a month

- 50 a month for Sallie Mae student loan payment (2 student loans in grace period, 1 in forbearance during consolidation)

TU score is 705, EQ at 677. My EQ report shows an unpaid 5 year old collection.

I'm not looking for anything crazy. Something affordable and economical, like a Ford Focus or something. I don't want to finance more than 7000. I do not have any previous auto loans, which I have been told will make it difficult to secure an auto loan. I can likely come up with a 2000 dollar down payment with some disciplined saving. 

So what are my chances? I know it's tough to say for sure, but I'd like a general idea from you wise folks. Also, is it easier to secure financing through a CU or through a dealer? I plan on opening an account at a CU on Monday (it's been on my to-do list, now on the must-do list) but will they be likely to extend credit to such a new customer? I've been told dealers will work harder to get financing for you..is this true?

[Eager2Learn]

You have a thin credit file (assuming you only have your student loans) and a charge off beaming off of your report.  Your best bet would to be to look at an even lower priced vehicle.  If you could put 2K down on a 5K vehicle you might be able to find some financing at double digit rates.  Financing is tough out there right now, but a CU with electronic deposit and a hefty down payment might get you rolling again.

[Anonymous]

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@Eager2Learn wrote:
You have a thin credit file (assuming you only have your student loans) and a charge off beaming off of your report.  Your best bet would to be to look at an even lower priced vehicle.  If you could put 2K down on a 5K vehicle you might be able to find some financing at double digit rates.  Financing is tough out there right now, but a CU with electronic deposit and a hefty down payment might get you rolling again.

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Incorrect advice.

Most banks/financial institutions do not finance less then 5-7 thousand dollars. Any less is juts not profitable enough to be worth the time, effort, and costs.

Your income is just scraping by, but you do qualify on income, but probably not on having a thick enough credit file.

Here is the real problem: You make 1900 a month gross. Assume 30% taxes- and you are only making 1300-1400 a month.

Rent is 500/UTS 600. that leaves you with $800 to live on

If you could secure financing for 8000 you would still be paying close to 160-170 a month, not including insurance or gas. so thats 300 a month.

Leaving you with $400-$500 a month to live on.

You may need a co signer.

And at least 2K down.

[Anonymous]

Probably should have posted some other info as well. Currently have 9 revolving accounts - 5 bank cards, 4 store cards. UTIL at 10%, total credit limit about 24000. I have been on file with all bureaus for about 5.5 years. Besides that 5 year old collection, my credit history is spotless. No missed payments on any accounts.

I understand what you're saying about the income and such, but I'm pretty frugal and have budgeted out a car payment. I know I can afford it, however, I do understand how a bank might feel about that. I do not have a creditworthy co-signer so I'm all on my own here.*sigh*

Well, I guess the only way to know for sure is to talk to a CU or dealership...

Message Edited by dmcca21 on 08-30-2009 01:52 PM

[lajntx]

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@Anonymous wrote:

Incorrect advice.

Most banks/financial institutions do not finance less then 5-7 thousand dollars. Any less is juts not profitable enough to be worth the time, effort, and cost

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Amazing how its always something with auto loans

Your score isnt good enough... no loan for you

If someone has a good score, suddenly it's : " We make dont decisions based off a score ", then they get slammed into a bad rate due to "not enough history"

If someone comes in with a chargeoff from 2002 set to fall off in next month.... You have this bad mark therefor "dont qualify for this program" or get a bad rate

Let someone spend a decade barely using credit, but suddenly want to finance a 25K car with 5K down.... You dont have enough "established credit"

Good score, good job, great down payment, 10 years credit history... WAIT! you only have been at your job 6 months???? 10.75% for you!

I'm really begining to believe there is no such thing as "the perfect auto credit application" when it comes to auto loans except those that have perfect credit, over 10 years history, and trade in their cars every couple of years that way the loans stay fresh, and the lenders have nothing to nitpick through

[Anonymous]

IMO you may be able to get a loan but at what interest rate is the question. I would suggest instead of getting yourself into more debt. Why not just look for a used car and PIF. With $2000 you should be able to find something reliable.