First time car buyer

[Anonymous]

Ok, I've read a couple of these and love the feedback. Hopefully I can get some advice as well. I'm 25, married and haven't owned a car, ever. I've been very luck to be able to walk/commute/bus everywhere I need. But I just accepted a new job (starts in 2 weeks) and I need a car to get there, plus it's time for me to buy a car.

I've been looking around and found the price range I can afford (~$15K) with my new salary. My problem is an auto loan. I'm trying to get pre-approved so I have some leverage when I go to the dealership. But I've been denied for 3 loans this week (Capital One, Huntington & FirstAgain). I did get approved through RoadLoans, but the interest rate is 14.89%, which I'd rather not use. I don't understand why I'm not getting approved - my average credit score is 685. I have never been late or missed a payment on any of my credit cards or student loans. I have about 7 years of credit history. My only negative is I have 60% utilization (paid for college), but it's been going down for the past year since I got married.

After reading some forum feedback, I know I should wait and pay off some credit, but it's not an option. I need a car now to get to work my first day. If I know I can afford this payment, how can I get financed? I really don't want to buy a beater car for a couple of months and try again in December. It's a waste of money. Would it be a good idea for me co-sign with my wife (we both work full time)?

[Anonymous]

I haven't a clue either why you aren't getting approved.

Go to the dealership and don't take anything more than 5.99%....You CAN get that with your score and being a first time car buyer and having the credit utilization that you carry.  (years ago my first car purchase was at 5.99% with a 650 credit score and 90% utility)

Just being knowledgeable and knowing what you can get is enough not to get swindled at the dealership.

Most dealerships really don't pull auto enhanced scores........

Message Edited by 1111mel on 07-17-2008 10:42 AM

[WhirledPeasPlease]

Reading the sticked thread about auto-enhanced scoring might help explain why your classic 685 got you such a high rate.

Are you including student loan debt in your 60 percent util?  SL is scored differently from revolving.

Check out the car ads online or in your local paper.  It's always fun to see who's offering what -- even if you won't qualify for top tier rates, you may have some luck with a first time buyer program.

Have you tried to have your wife qualify for a loan? 

Just my 7 cents -

[Schoolbuskid]

its probably because the OP has no auto loan history, and you may need to find out what your high credit is, alot lenders look at that!

[Anonymous]

Did any give a reason for turning you down? When I bought my second car I had no auto loan history (paid cash for first). My rates ranged from 6.79-9%. Do you have a down payment? The dealership finance guy told me my big down payment helped with the financing. I put 4500 down on 15000. Are you currently employed? I know you said you have a new position but if you aren't currently employed or you have only been working at the current job for a short while or if your current position pays much less these may be an issue. If it were me I think I would ask if having her co-sign would help if you aren't willing to wait or buy a beater in the meantime.

[Anonymous]

If you haven't already, I'd go ahead and take the loan since your options are so limited. Make sure all payments are on time/early and make more then 1 payment per month if possible to get it paid down. Be patient because your score will improve with time as long as you stay on track.. Just remember,,, each time you give your social out someone will try to use it and your score will always take a hit. Do not open any new accounts!

[Anonymous]

If your new job belongs to a credit union you should join it and apply there... It was the best thing I ever did!

[Nenne]

credit4me, can you expand on your experience? I'm a recent graduate and my new job has a credit union in the building and obviously my job history is 1 month. I'm wondering if I would still have a chance with them. My scores are low (571) but I plan on bringing them up by next month since my revolving debt is only 3.5k.

[cobra19]

Try a CU

[islandchild82]

I would definitely try a credit union as well. If you aren't affiliated with any specific organization, many offer other options to join such as by where you live, etc. If approved there, you can take that to dealerships and use that as leverage.