Do I dare the slings & arrows of Auto Financing?

Anonymous · ‎06-11-2015

My car requirements:

1) 4 doors

2) hatchback or small suv - I DIY a lot so need cargo hauling

3) Good mpg (cuts out a lot of suv)

4) Back seat head/legroom for 6ft+ kids (cuts a lot of hatchbacks)

5) Under $20k negotiated price

Credit Score:

TU: Fico 8: 631, Auto Score 8: 641, Auto Score 4: 697

EX: Fico 8: 631, Auto Score 8: 637, Auto Score 2: 665

EQ: Fico 8: 653, Auto Score 8: 673, Auto Score 4: 672

AAoA: TU: 7yrs, EX: 7yrs, EQ: 6yrs

Inquiries: TU: 4 EX: 2 EQ: 3

# of positive trade lines: TU: 8 EX: 6 EQ: 8

# of negative trade lines: TU: 7 EX:7 EQ: 4

lates on student loans that should have been deferred. No GW from Ed. Last late: 2 Years, 5 Months ago

2 collections: 1 paid that should drop off 9/2015, 1 medical recently paid but still reporting as open.

Income: 65k

Length of Employment: 8yrs

Previous Loan Experience: No auto loans. Have mortgage for 7yrs, refinanced 1/2014

Debt-to-Income (DTI): 25%

CC Util: 42% due to 0% APR offers. Could pay off by Aug to 0 if needed.

Year of Car: 2014 Fiat 500L (~16k) or 2015 Jeep Patriot (~18k), both new.

Miles: 0

Purchase/Refinance: Purchase

Requested loan term (XX Months): Not sure

Down payment amount: 2k can do more if needed

Co-borrower/Co-Signer: NO

Other: 3 new cards - C1 in Nov, CF in March, HD in May

My car was in an accident end of winter & totaled Since then I've been driving my son's car since he didn't need it (can walk to work, etc) while I look for something.

I normally pay cash for cars 2-5k & run them into the ground. But I haven't seen any good deals and I've had extra expenses - graduations, unexpected trip for funeral that have bitten into my savings.

If I had the time, I'd wait until January when the collections and a few lates should be gone and aging should drive my score up near 700 (according to simulator) but #1 got into his 'dream' college that's hours away and needs his car back

Even waiting til August would put me in a better place, but both the Fiat and Jeep have incentives this month that'll take 3-5k off the car price. I don't know if they'll be the same in Aug or if there will be something similar.

So I believe my choices are:

1) Buy another clunker for now and hold out til Jan/Feb

2) Wait til August and see what's available

3) Buy now if I can and look to refinance next year

4) Buy my son a bus pass

I would appreciate some insight. I admit to getting an itch to just go for it but I don't want to spoil my chances.

On the financing side -

I've been banking with WF for over 15 years but I don't know if they'll do anything for me loan-wise. I probably don't want to waste inq on them unless you know something.

C1 says they'll approve up to 35k but they won't do the 2014 as a new car. I haven't pulled the app on that due to the 3-pull cost.

I've seen posts that say Chrysler pull EQ which is my highest, so I might be able to get a decent rate at the dealer.

While I'd love to get something under 5% I'm guessing I'd run around 10%. I'd likely turn down anything higher than that...just not worth it.

Thoughts?

CH-7-Mission-Accomplished · ‎06-11-2015

Check out these used hybrid SUV prices. The Highlander is a nice car.

http://usnews.rankingsandreviews.com/cars-trucks/rankings/used/hybrid-suvs-1/

SamsungHDTV · ‎06-12-2015

Based on the extensive information provided, my vote is for 2) Wait until august and see whats available.

Pay down the credit cards and this will increase your credit scores. You should get way less than 10% now, and less than 5% in august. In my opinion.

SamsungHDTV · ‎06-12-2015

Oh, and give your son back his car by august. He'll need it to go see the college girls. I vote no bus pass.

Anonymous · ‎06-12-2015

Thanks. I think you are right. At worst I'll have my cards paid off and more cash to buy an older car that'll give me something to drive while I look for the right conditions to buy new.

No bus pass

Anonymous · ‎06-13-2015

You may want to consider buying a newly used vehicle that is still under warranty. Any new car is going to take a big depreciation hit in that first two years, really big in year one so if money is tight new may not be the best way to go. If you pick up something used you can often save 5k or more, not a small amount of money so you may want to consider that.

Anonymous · ‎06-13-2015

I agree - that is one of the reasons I was looking at those two vehicles in particular - they were both new, but the incentives/rebates were high enough to offset that first year depreciation. I found some same-year used vehicles with similar pricepoints.

That's when it makes sense to me to buy new - I'm getting a nice discount, but full warranty and that 'new car' smell. After that it's getting something that I know I can handle the payments on, even if Life goes fubar for a while.