Car loans for bad credit.

[Anonymous]

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@Anonymous wrote:

What do youi guys define as int rate that is too high? 14 %? 

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Anything over 5.9% is too high if you run amortization tables and see.

Even 5.9% is painful if you can't pay down 20% of the loan after you get it.  Run amortization tables on any figure and interest rate and compare them with standard depreciation figures.

If you get an autoloan, only get one with 80% LTV (or lower!).  Then, run depreciation figures regularly and keep your balance at 80% of the selling price.  Never, ever have a loan that you can't get out of with a quick sale of the securing asset.

[Anonymous]

Look I run the finance department for one of those "everyone approved" places

Every single person is approved. It's just not on your terms. The down payment might be higher than you want or have. The interest will be higher. Or the payment might be high. But you are approved if you come down with the right down payment The more down the less risk

It has nothing to do with the rich getting richer. It has to do with paying your bills. Last time I checked income had no impact on your credit score

If you don't pay your debts you are more risk. If you are more risk you pay more for people to deal with you.

If you live week to week you are living above your means,If you can't pay your bills you are living about your means. That fine. If you want to live like that you can. But it's a pretty stressful and costly life.

Everyone can have hard times. You need to have a emergency fund for those times. If you are in constant "hard times" you need to reevaluate your life

a Repo is not magic.  90% of the time they trashed the car or damaged it and you get half to outstanding balance.  It's not like "if I stop paying just repo it".  Yeah you take the car but you take a bath on it 

If you think you are going to be poor the rest of your life because the system is "rigged", you will be. Fine. Live like that, less competition

[Anonymous]

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@Anonymous wrote:

It has nothing to do with the rich getting richer. It has to do with paying your bills. Last time I checked income had no impact on your credit score

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A long term friend of mine is an unskilled worker in her 30s.  She's literally made $1 over minimum wage her entire life and just doesn't have the capacity to learn enough of a skill to move up.  I believe her after tax income last year was like $19,000 or something.

Her FICO score is almost 850.  I think her last annual CCT $1 pull was in the 830-840 range across the board.  On $19,000 income.

She also has almost $20,000 in savings, and even has a small retirement account.

Income and FICO scores don't matter if you live BENEATH your means, and save money for rainy days and emergencies.  If someone on a $19,000 income can put away $20,000 by age 33 and have a near perfect FICO score, anyone can do it, they just refuse to do it.

[Anonymous]

I guess they deleted my post.  

I work in the industry and deal with what he was talking about everyday.  

Gave me a honest post and it's gone. 

Oh well 

[Anonymous]

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@Anonymous wrote:

What do youi guys define as int rate that is too high? 14 %? 

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an interest rate.

[ejm201]

I completely agree! How can anyone come out ahead with a 16-24%?! Many people I have met who go to buy here/pay here style places are genuinely hard working and simply NEED a car for work. We lived in FL and despite living next to a bus depot, we BOTH "NEEDED" a car to even make just the little bit we did make. We both worked PT jobs; I was able to get a FT job before wife, who sacrificed that to help care for the kids while I worked.

I think many people forget, these people who go to these "buy here/pay here"places, at least the ones I have met really want to do right and rebuild or simply try to build credit. And again many need these cars for work. Some say save and buy a car in cash, well, from my own personal experience, people can't get cash IF they can't get to work in the first place. So, I agree it's a very vicious cycle. I was ONLY able to buy a car in csh due to using money from tax refund. If it were not for that, I'd have to finance two cars, and no choice being here in MD as well. Up the road means a 40mi hike...and most places outside of a suburban area REQUIRES a car, no way getting around it UNLESS you live in select areas, or Baltimore or DC.

I don't like when some people lump those particular consumers in a batch of "irresponsibles"[which I admit some people are just willfully ignorant]. From what my wife, a Tax Accountant tells me; many people simply were not taught finances, many not aware of what can be done to build credit and for me personally, it was trial and error. I still beat myself up for buying my 2010 corolla for 18k at 8.5%aprand my credit score at the ime was a 700. So, I know for sure others out there were like me, inexperienced and ill-informed with not a lot of financial advisors. 

[Anonymous]

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@ejm201 wrote:

I completely agree! How can anyone come out ahead with a 16-24%?! Many people I have met who go to buy here/pay here style places are genuinely hard working and simply NEED a car for work. We lived in FL and despite living next to a bus depot, we BOTH "NEEDED" a car to even make just the little bit we did make. We both worked PT jobs; I was able to get a FT job before wife, who sacrificed that to help care for the kids while I worked.

I think many people forget, these people who go to these "buy here/pay here"places, at least the ones I have met really want to do right and rebuild or simply try to build credit. And again many need these cars for work. Some say save and buy a car in cash, well, from my own personal experience, people can't get cash IF they can't get to work in the first place. So, I agree it's a very vicious cycle. I was ONLY able to buy a car in csh due to using money from tax refund. If it were not for that, I'd have to finance two cars, and no choice being here in MD as well. Up the road means a 40mi hike...and most places outside of a suburban area REQUIRES a car, no way getting around it UNLESS you live in select areas, or Baltimore or DC.

I don't like when some people lump those particular consumers in a batch of "irresponsibles"[which I admit some people are just willfully ignorant]. From what my wife, a Tax Accountant tells me; many people simply were not taught finances, many not aware of what can be done to build credit and for me personally, it was trial and error. I still beat myself up for buying my 2010 corolla for 18k at 8.5%aprand my credit score at the ime was a 700. So, I know for sure others out there were like me, inexperienced and ill-informed with not a lot of financial advisors. 

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A lot of people confuse want with need when it comes to cars.  It can be incredibly difficult to get to work without a car, but it generally can be done. Case in point: my sister was without a car for close to a decade in FL. Work was 15 minutes away by car. On the bus in suburban FL? Over an hour. It was ridiculous, but she did it for years.  You generally can get to work to save cash to buy a car . . six months of saving the $300/month you'd be spending on a car payment, one would have $1800 to buy a cash car. Too many people just don't have the patience for it.  In a two adult household, sharing a car until a second is feasible is almost always possible. These things aren't fun but they can be done to stay out of bad deals. 

I'm not at all saying this was you . . but it's this mentality that drives people to the buy here pay here places that you've mentioned. 

[ejm201]

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@Anonymous wrote:

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A lot of people confuse want with need when it comes to cars.  It can be incredibly difficult to get to work without a car, but it generally can be done. Case in point: my sister was without a car for close to a decade in FL. Work was 15 minutes away by car. On the bus in suburban FL? Over an hour. It was ridiculous, but she did it for years.  You generally can get to work to save cash to buy a car . . six months of saving the $300/month you'd be spending on a car payment, one would have $1800 to buy a cash car. Too many people just don't have the patience for it.  In a two adult household, sharing a car until a second is feasible is almost always possible. These things aren't fun but they can be done to stay out of bad deals. 

I'm not at all saying this was you . . but it's this mentality that drives people to the buy here pay here places that you've mentioned. 

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I agree with you somewhat.

My wife was a full time college student and had to take three buses which was about 4.5+ hours of commuting on the Hartline in addition to walking every day to class and to work at a deli. My post was more so meant for workers like her and your sister you mentioned. 

I do agree with you here,there will always be people who just don't care[about fiancial health]. But there are good people like my wife who truly was limited in job opportunities due to not having what employers called, "reliable transportation"aka a car. An employer saw she didn't walk to a car and never called her back. I have heard many employers turn good people like her away because she didn't have a car. Not making excuses but just like "price gouging" during a natural disater is illegal'; charging 24% even 36% IR(it has been done) on an auto loan is CRIMINAL, if not highly immoral IMO. Think of how much interest one pays just paying 3%APR. Could never imagine paying 20%+ on a car that will depreciate faster than my tennis shoes.

There's a reason why I have read people's post on here about easily getting a $20k limit on a CC and a $50k auto loan yet CAN'T get $150k for a home loan. I think we can all agree simply having a pulse can get you into a car loan but not so much for a house which is actually a far better investment than the car. Why aren't the same stringent requirements in place for car loans but are for buying a home. I know people with 680+ scores having to jump through rings of fire for a $200k home loan now but practically breathing on a mirror lands you in a new set of wheels.

[Anonymous]

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@ejm201 wrote:

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@Anonymous wrote:

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A lot of people confuse want with need when it comes to cars.  It can be incredibly difficult to get to work without a car, but it generally can be done. Case in point: my sister was without a car for close to a decade in FL. Work was 15 minutes away by car. On the bus in suburban FL? Over an hour. It was ridiculous, but she did it for years.  You generally can get to work to save cash to buy a car . . six months of saving the $300/month you'd be spending on a car payment, one would have $1800 to buy a cash car. Too many people just don't have the patience for it.  In a two adult household, sharing a car until a second is feasible is almost always possible. These things aren't fun but they can be done to stay out of bad deals. 

I'm not at all saying this was you . . but it's this mentality that drives people to the buy here pay here places that you've mentioned. 

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I agree with you somewhat.

My wife was a full time college student and had to take three buses which was about 4.5+ hours of commuting on the Hartline in addition to walking every day to class and to work at a deli. My post was more so meant for workers like her and your sister you mentioned. 

I do agree with you here,there will always be people who just don't care[about fiancial health]. But there are good people like my wife who truly was limited in job opportunities due to not having what employers called, "reliable transportation"aka a car. An employer saw she didn't walk to a car and never called her back. I have heard many employers turn good people like her away because she didn't have a car. Not making excuses but just like "price gouging" during a natural disater is illegal'; charging 24% even 36% IR(it has been done) on an auto loan is CRIMINAL, if not highly immoral IMO. Think of how much interest one pays just paying 3%APR. Could never imagine paying 20%+ on a car that will depreciate faster than my tennis shoes.

There's a reason why I have read people's post on here about easily getting a $20k limit on a CC and a $50k auto loan yet CAN'T get $150k for a home loan. I think we can all agree simply having a pulse can get you into a car loan but not so much for a house which is actually a far better investment than the car. Why aren't the same stringent requirements in place for car loans but are for buying a home. I know people with 680+ scores having to jump through rings of fire for a $200k home loan now but practically breathing on a mirror lands you in a new set of wheels.

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I think it's for this reason that they are predicting subprime auto loans as the next collapse!

[Anonymous]

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@Anonymous wrote:
It amazes me how many companies, banks and dealers that claim they can finance anyone and don't!
All it takes is an illness (such as what I have been dealing with for years) or an injury and then you have to choose what gets paid and putting food on the table. Then your car dies so now you can't get back to work to clean up the credit. So now you have a job you can't get to, can't get to work can't pay the bills. Yes there are people who scam, lie, cheat and don't pay their bills even after second chance but not everyone is like that.
If they don't pay their car payment then repo the car but making it harder on the people that really are trying to do right isn't going to stop those that don't pay their bills. And people who haven't had to struggle all their lives put those that have in a different category and put us down. I really thought maybe this country was going to change and give others the chance to get ahead but I don't ever see that happening! It's a vicious circle for the poor and some middle class! It's true the rich keep getting rich and the poor keep getting poor and there really isn't many out there that care.

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I get what you are saying, and its unfortunate, but it makes sense. 

I have OK credit now (660ish across all 3) but before i started rebuilding i was at a 505. And i needed a car loan during those bad credit years. 

I understand the feeling of "I have bad credit, but i can pay and i WILL pay! Why wont someone just give me a chance"

But the fact of the matter is that people extending credit are running a business. One that needs to make a profit. And they have developed algorithms far smarter then you or I that determine the risk/reward of giving someone a loan. "I really thought maybe this country...." Come on now. Seriously? What does it have to do with what country you are in. For some reason just because you are in a certain country, companies should loan out money to people at certain rates which are proven to lose them money in the long run? Thats not how a business works. If that is what you are looking for, you are looking in the wrong place. Maybe go check out some local charities. 

Its unfortunate. It is. That the people least able to pay high interest rates are the ones who get them. It seems like a never ender cycle designed to make you fail. Its not. Creditors loan you money in order to make a profit. And because people with lower scores tend to default and never pay them back, they have to charge those people higher interest rates so that the ones that DO end up paying the loan back make it profitable to lend to the group of people whith those scores. 

They arent being mean. Creditors are only around because they can make a profit by extending that credit. They arent a charity. They arent just trying to screw you by either giving you a high APR or deciding to not lend to you all together. They are calculating a risk/reward. Thats all

What would you rather. A) the freedom and opportunity to accept a high APR loan if you so choose to. or B) Not being offered any kind of loan at any APR, period. I for one will pick A. Even tho there would likely never be a situation where i actually accepted those type of loans. last time i checked this was supposed to be a free country. Meaning I, as a private citizen, should be able to enter into any contract i want with another private citizen/company/corporation without the government deciding FOR ME what is or isnt good FOR ME.