Before I begin- I just want advice from people that was in my position before or have a good idea about car loans.
Hello all, I am 19 years old. I'm looking to buy my first car either through carvana or CarMax. I make about 4100 monthly. My fico 9 scores are 750+, but my credit file is thin. One discover student card, Credit limit 1250.
I know they say carvana approves almost anybody with various credit types. But will I be able to finance like 28-30k with a $2,000 down payment?
@JupiterDiary-24 wrote:Before I begin- I just want advice from people that was in my position before or have a good idea about car loans.
Hello all, I am 19 years old. I'm looking to buy my first car either through carvana or CarMax. I make about 4100 monthly. My fico 9 scores are 750+, but my credit file is thin. One discover student card, Credit limit 1250.
I know they say carvana approves almost anybody with various credit types. But will I be able to finance like 28-30k with a $2,000 down payment?
Who is your main bank with ? Do you belong to any credit unions? Carvana and Carmax usually have higher rates . Since this will be your first car loan rates wil be on the higher side . I would try cap one as well .
Check CapOne.
My last car loan was with them.
Very low rate, pre-approved terms, simple and easy at the dealership.
New exactly what my cost was before even test driving.
@JupiterDiary-24 wrote:Before I begin- I just want advice from people that was in my position before or have a good idea about car loans.
Hello all, I am 19 years old. I'm looking to buy my first car either through carvana or CarMax. I make about 4100 monthly. My fico 9 scores are 750+, but my credit file is thin. One discover student card, Credit limit 1250.
I know they say carvana approves almost anybody with various credit types. But will I be able to finance like 28-30k with a $2,000 down payment?
Carvana takes mystery cars from auction, and people's problem cars they sell them. Many of the ones at auction were abused and may even be someone's bankruptcy repo.
Expect to get a car that's been marked up for at least 40-50% more than private party price and is just a mystery grab bag. Carvana doesn't know much about it, and they just drop it off basically and toss you the keys.
Financing a car should have the music to Jaws playing in the background, especially when you use in-house financing at the place that sold it to you.
All I can do is state the facts as I see them. You'll do whatever you want and find out later like we all do.
If your credit isn't garbage, why would you finance with Carvana, or even buy a car there at all, instead of a normal car dealer?
You want to look for a Certified Pre-Owned vehicle, especially a reliable brand like Honda or Toyota so it's not eating you alive with billable mechanic hours while you're trying to pay for it, and these come with some warranty extension for a while, direct from the dealership through the manufacturer program, and no reputable dealer is likely to have the interest rates Carvana does.
Reputable dealers also typically do a multi-point inspection as part of CPO and tend to fix what's wrong with them to get them fit to sell, and most dealerships were not started by a felon and don't have issues getting people their title after they paid for the car.
CPO programs make it harder to slip a bad car to you and leave you with a mess on your hands. They tend to be newer, but significantly depreciated (because the person who buys new gets walloped with depreciation losses), so you have a significant cost savings (the first owner took the financial lumps for you) and the car still probably has plenty of life in it.
In other words, people who buy new cars either can't do math and handle their pocketbook, or have plenty of money and don't care, but you may not be like them.
The dealership has to fix it up in accordance with the manufacturer program, and they're not just going to leave you with no warranty except perhaps the "lemon law". As these tend to come with at least a year or 12,000 from the company that made the car, if anything outrageous happens shortly after you buy it, you're probably going to be okay.
Warranties that do not come from the factory/manufacturer are perhaps typically one of the biggest frauds in the car sales industry. Typically all they ever do is cost thousands of dollars, get rolled into loans making the loan more oppressive, and don'tt actually cover much of anything.
If they start talking about warranties, figure out what it actually is. Many of these used car places just see them as profit centers and couldn't care less if you're out $2,000-3,000 at outrageous interest rates for something that does not help you later.
@IsambardPrince wrote:
@Shooting-For-800 wrote:Check CapOne.
My last car loan was with them.
Very low rate, pre-approved terms, simple and easy at the dealership.
New exactly what my cost was before even test driving.
Capital One told me they'd only finance me at 10.39% and I've got their 10.39% swinging.
The car I drive is reliable enough to just change the oil and drive for a while until the banks decide to be more reasonable or I can pay for the car in cash.
Until I can get significantly more favorable terms than that, I'm not playing their game. I could get a personal loan and buy a car with that as part of the payment now. Wouldn't even need to be a huge loan, would be 2/10ths of a percentage point higher, and they wouldn't have my car title.
It would still not be ideal, but at least there wouldn't be a lien. 10.39% is an insult.
I would not consider a 10% car loan an insult with your thin file, lack of credit expierence, and today's interest rates. The best rate anyone can get with perfect credit (and a lot of it) from a regular (non manufacturer) bank is maybe 5%.
You are losing a lot more money shopping at Carvana than you would be using the Cap One loan at a better dealership.
Good luck.
