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I am a college student and have typically secured a great job on campus over the summer. That didn't happen. Instead, I've recieved a job offer that's off campus, but I don't have a car. My parents have a very old Accord 2002 or 2003? with 67k miles that they'd sell me for $3,000 if I wanted it. They even "prequalified" me for 0% financing for a year. Now, I could just pay them the $3,000 outright, but I am wondering if it would be better to get an installment loan reported on my credit profile?
Are you in California? I'll buy that Accord
It's always preferred to always have at least 1 installment loan. They don't always have to be cars though. As my father's installment loan is financing of some new appliances.
@Schwartzinator wrote:I am a college student and have typically secured a great job on campus over the summer. That didn't happen. Instead, I've recieved a job offer that's off campus, but I don't have a car. My parents have a very old Accord 2002 or 2003? with 67k miles that they'd sell me for $3,000 if I wanted it. They even "prequalified" me for 0% financing for a year. Now, I could just pay them the $3,000 outright, but I am wondering if it would be better to get an installment loan reported on my credit profile?
I doubt that you can acutually get a 0% loan on a 15 year old car but if you can then sure its a good thing to have. Having an installment loan history is a good thing for credit, personally I would pay cash for the car and join Alliant and do a secured savings loan ($500), pay it down 95% and build your installment history that way. The advantage is also no interest because of the way you would pay it down and then you would have a multi year installment loan without having to have a lien on the car and the insurance requirements that come with liens etc.
@Schwartzinator wrote:I am a college student and have typically secured a great job on campus over the summer. That didn't happen. Instead, I've recieved a job offer that's off campus, but I don't have a car. My parents have a very old Accord 2002 or 2003? with 67k miles that they'd sell me for $3,000 if I wanted it. They even "prequalified" me for 0% financing for a year. Now, I could just pay them the $3,000 outright, but I am wondering if it would be better to get an installment loan reported on my credit profile?
Sorry, but no one reputable is going to finance a 15 year old Accord. Great cars though. My mom held on to her (new at the time) 1987 Accord until 2007.
I would stick with the Bank of Mom and Pop for this one. If you jwant to have an installment loan reporting on your credit, I suggest you search the forums for "Shared Secured Loan" and see how to get one reporting for several years, at the cost of only a few dollars.
I believe his 0% financing was a tongue in cheek thing. His parents are offering him the 0% financing not a bank
That isn't necessarily true, many reputable lender's will still offer great financing on older models. My credit union has no vehicle age limit and offer's 3.09% financing for up to 63 month's on older vehicles. I financed my 2005 model vehicle through them at 3.05% for 63 month's a few year's ago (rates have changed a tad since then).
@Anonymous wrote:That isn't necessarily true, many reputable lender's will still offer great financing on older models. My credit union has no vehicle age limit and offer's 3.09% financing for up to 63 month's on older vehicles. I financed my 2005 model vehicle through them at 3.05% for 63 month's a few year's ago (rates have changed a tad since then).
You financed a 9 year old car. Depending on the vehicle, that isn't unreasonable. Many luxury vehicles still command a decent resale value. We have a 2003 Porsche 911 Carrera 4 that still Kelly Blue Books for 24K.
OP is was asking about financing a 15 year old Accord, which could have very different lending standards than the 9 year old car you financed 3 years ago. Plus there are better options for installement loan reporting.
Dee,
As I mentioned in my comment my credit union has no vehicle age restriction's. So I was simply stating that there are credit union's on there that will finance a vehicle no matter the age as long as credit isn't an issue, DTI is inline, and LTV ratio's are fine. Credit union's will most definately finance vehicle's of that age. I was using my situation as an example, and I fully understand the vehicle in question is older than what mine was, I was simply giving an option.
Another option (depending on your savings) would be to take out a secured loan from your personal bank and use your saving's as collatoral. This will result in a VERY low rate, and an installment loan reporting on your bureau's which will help with scoring if that is what you are wanting.
Just sort the installment part of the scorecard with a share secured loan. Cheaper that way and every bit as effective if not more score wise.
I have a different opinion than some as I've been in the dirty scorecards for years, but when I can move even my dirty file by 22 points on FICO 8, worth doing.