First time buyer financing 2019 car?

Reeflex · ‎12-12-2018

Hey, so I currently own a 2018 Toyota Corolla Se with around 8k miles, the car reaches its year in Fabruary. My dad and I are going to try and turn it in and to take out a 2019 Toyota 86 (frs) this time he wants me to be a co-signer so my credit can go up gradually. He has pretty good history with toyota he has 5 Toyota 3 currently being financed (1 one of them being mine) and 2 other ones he’s already finished paying.

My question is we currently have this Corolla at a 1.9% interest around $380 a month, will the Toyota 86 change the interest to an absurd amount? Does anyone know from any passed experiences. He has around the same score (704) he first had when he took out the Corolla, but now he has 2 more pulls from new cards he took out.

Will my scores affect the interest in a good or bad way? I have a 729 TU with 1 pull | 719 EQ with 4 pulls

Kree · ‎12-13-2018

1.9 is a very good rate, and most rates have gone up this past year. So it is likely that you might see higher rates even if 100% of the application was the same versus last year.

They will most likely place your father as the primary on the paperwork. This should allow them to ignore your scores.

Biggest factor that might raise interest more will be rolling over negative equity. If you owe more on the 2018 than it is worth, and cannot pay the difference, then the Loan to Value ratio might cause rate increases.

Glen_M · ‎01-06-2019

Your scores won't hurt, DTI is going to matter a lot more to them. The interest rate might be slightly higher because the FED rate has increased, and the number of inquiries and new accounts has increased.

This sounds like a good way to give someone else an awesome deal on a 2018 car, while you eat the first year depreciation.

CCrew · ‎01-08-2019

@Glen_M wrote:

This sounds like a good way to give someone else an awesome deal on a 2018 car, while you eat the first year depreciation.

Not to mention that the Toyota86/BRZ twins have a resale that drops like a enormous rock once they roll out of the showroom. Their resale is abysmal.

ridgebackpilot · ‎01-08-2019

@Reeflex wrote:
Hey, so I currently own a 2018 Toyota Corolla Se with around 8k miles, the car reaches its year in Fabruary. My dad and I are going to try and turn it in and to take out a 2019 Toyota 86 (frs) this time he wants me to be a co-signer so my credit can go up gradually. He has pretty good history with toyota he has 5 Toyota 3 currently being financed (1 one of them being mine) and 2 other ones he’s already finished paying.

Let me get this straight: You bought a new car last year, drove it for only 8,000 miles, and you already want to trade it in on another new car? That Corolla depreciated significantly during the short time you've owned it. As a result, you're going to be so far underwater on the new car that you'll drown!

@Reeflex wrote:
My question is we currently have this Corolla at a 1.9% interest around $380 a month, will the Toyota 86 change the interest to an absurd amount? Does anyone know from any passed experiences. He has around the same score (704) he first had when he took out the Corolla, but now he has 2 more pulls from new cards he took out.

As others have said, your credit scores aren't the concern here. Neither is the interest rate on your new loan. Your concern should be the deal itself, which will be so loaded in favor of Toyota and your finance company that they'll be really happy to see you coming. In fact, I'll bet they're hoping you'll be back in next year to trade in your new Toyota 86 so they can take even more of your money!

Have you considered leasing your cars instead? Under the circumstances, that would probably save you a lot of money...

Anonymous · ‎01-16-2019

As others have said your interest might remain the same but the amount of negative equity you will be rolling into a new car is going to be absurd. Couple of issues stand out. Your monthly payment is going to go way up. Do you plan on keeping the next car for the entirety of the loan? You will be ridiculously upside down on the second car more so then your current car. Doubtful you will be able to get out of the second car without a significant down payment on any future cars. ($10-$15k). Do what you want but not a smart move financially. After reading the last 5 or 6 pages of this board it seems people enjoy buying cars they shouldn't buy.

Anonymous · ‎01-18-2019

IMO I would keep that car since its a beautiful car. I personally own a 2018 Camry, and I love my Toyota Camry!

You are paying a beautiful interest rate on that car. Remember the feds have spiked the interest rate up about 1% since the time you purchased this car. That loan could have been 2.9%. The general thumb is that anything over a 700 is considered good. Good enough to get you what you want at a comfortable rate.