First time auto loan.....my process. Input requested.

[Anonymous]

Hey everybody,

I am going to apply for my first auto loan.  My FICO scores are in the mid-upper 720s.  My debt to credit limit is about 18 percent (on all my cards).  

I am selling my 96 5.7l caprice today for 2,000 dollars.  I am trading in my boss's work truck for 1000 or so (be happy to get 300 honestly)

I am looking at a 2004 nissan frontier xe with 70,000 miles.  I currently use a 98 frontier xe with 202k on the clock.  My boss also has a 04 with 170k....

They want 8,200 for it.  I am going to try to get them down to about 7,500 with trade in of truck.  I am putting the 2,000 from my car sale as a downpayment, as well as another 3,000 from my savings acount.  

Looking at 5,000 down on a 9-10,000 loan (after tax, title, etc...).  Dealer is driving 3 hours to get my truck for me (it was going to auction).  Going to test drive it Monday, and if I like it, taking it home Monday night.

My question is....I am going to be going through the dealership.  I feel with my excellent credit, I will get a good rate.  However, I am going to make sure there are no "pre-payment penalties" because I plan on paying this car off in 3 months (the remaining 4,000 or so).  I have never had a car loan, but my credit is excellent so I figured I'd add a loan to my credit history.  I was going to buy this cash, but figured might as well take advantage of my high scores and pay it off withing 3-6 months or so...

Anyway, wish me luck guys.  

[Anonymous]

And once I pay this off, I will eliminate the rest of my credit card debt....and then saving up to get a "weekend" ride.  The truck is going to be for my window cleanin business, as well as getting to my other job.

[Jazzzy]

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@Anonymous wrote:

My question is....I am going to be going through the dealership.  I feel with my excellent credit, I will get a good rate.  However, I am going to make sure there are no "pre-payment penalties" because I plan on paying this car off in 3 months (the remaining 4,000 or so).  I have never had a car loan, but my credit is excellent so I figured I'd add a loan to my credit history.  I was going to buy this cash, but figured might as well take advantage of my high scores and pay it off withing 3-6 months or so...

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I do wish you good luck. I don't see you having any problems.

My input would be to be careful about the financing. You say that you are going to go through the dealership. Don't let them put in a general app for you that is shopped around. We've seen people end up with lots and lots of inquiries when one app is faxed out to several lenders "trying to get the best deal." Multiple inquiries for auto loans will count as one for FICO scoring purposes, but, in reality, your future lenders will still see a list of inquiries. You will then have some explaining to do.

Where do you bank? Do you belong to a credit union? I would want to know what my loan was going to be before I bought the truck. I'd be checking a few places other than the dealership. This isn't a huge loan, so you'll be fine. But I would never leave my fate to the dealer. I'd be locking in something first. Then, I might let the dealer try to beat it...maybe.

[MarineVietVet]

I second what Lynette said about not going through the dealer for financing. It's been many years since I did that. My last few car loans have all been through my credit union because they have great rates and I know there will only be one inquiry for my application.

From a BK years ago to:

9/09 EX pulled by lender 802
3/10 EQ- 800
4/10 TU -772

You can do the same thing with hard work

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