Having some trouble getting financed

Anonymous · ‎11-09-2010

I had a repossession on a vehicle about 8.5 yrs ago due to losing my job. Since then, I've been going to buy-here pay-here type dealers which always sell me a car that is falling apart for double what it's worth. Tired of making a $300/mo. payment and having to sink another $200/mo. on average into it to keep it running.

Anyways, here we are 8+ yrs later. I've had a decent job for 5yrs (35K/yr). Saved up some money thinking that now my credit is at least cleaned up and everything is paid down including the removal after seven years of my repo. Score sits at about a 640 average between all three bureaus. FICO's site tells me that I should qualify for a 48 month used auto loan from anywhere between 12% and 15%. The total price of the car I would like to buy is less than 11K, about a thousand below KBB with the mileage. With my $2000 down, I think at this point I'm ready to rock!

I start the pre-approval process, firstly with my bank- Bank of America. They turn me down, or their computer does at least (nothing like a computer generated "NO"). I think to myself... what is the problem? So, I go to Lending Tree and apply with about five others. Again, a computer generated "NO" without any explanation whatsoever. I decide I'll go directly to the dealer and talk with someone face to face for once!

I get to the dealer, tell him of my down payment and go for a test drive. All is well, until they run my credit. I sit for hours waiting to hear back from these "banks", he finally tells me that I'm going to need a co-signer. I laughed and told him my mommy/daddy days were over about 18yrs ago! Another hour goes by... he comes back and tells me that I'm going to need 40% down!

I gave him a breakdown of my expenses and a copy of my latest check stub, it clearly shows that about 70% of my wages are free and clear. I don't have any children, nor a car payment (it's paid for) or rent/mortgage (it's owned by my girlfriend).

So now, I'm sitting here wondering if there is anything that can be done. I've read all over the net about people getting car loans with horribly low credit scores, I know mine isn't the best but it certainly isn't bad (FICO says it's "fair"). It's a used Scion with 70k miles, it's not like I'm trying to finance a Maserati! Any suggestions? I really want and need this car! No more clunkers!

Anonymous · ‎11-09-2010

Your problem is the car most likely. Banks dont want finance a car with 70K miles. Most banks the limit is 80-85K with perfect credit. Have you tried road loans.com? They will finance anyone. Also I would try Nissan Motor Acceptance they are pretty liberal. Also a car with 70K miles your gonna be way upside down soon. I think you should try a different dealer and a different car.

Anonymous · ‎11-09-2010

That is something to consider, thank you. I've done the math and this car works out perfectly for me, 36 month loan at about $315/mo.

I put about 17k miles on it yearly. Which to me says it will be paid off and only have 120k miles on it. At that point, I should have repaired my credit enough to trade it in and finance a new vehicle. I'm not too concerned about being upside down, I've been there and worse for quite some time trying to keep these clunkers running. My main problem right now is trying to come up with $4k, it seems a bit much to me to be asking nearly half the car's cost up front as a down payment.

Anonymous · ‎11-09-2010

As has baeen stated, I think the problem is the car.

once you go five plus model years old, and/or 70K miles plus the banks that are willing to finance start to drop off. Its that simple.

The reason is: car loans are collateralized loans. There is the expectation that if you do not pay the finance company can take the vehicle and sell it and at least recoup their investment in you. At 70K there is there is the expectation that the vehicle will be quickly rendered heavily depreciated if they were to try to sell it.

I am confident that you could get yourself a new car or a newer used.

At the same time if you are clearing 70% of your income a month, you should also consider Ramen noodling your lifestyle (as in cutting off all unnecessary spending and fancy eating) to secure a bigger down payment.

Larger down= more likely to finance, lower interest rate and lower payment for you plus you can possibly buy a new or newer used car.

mross1080 · ‎11-09-2010

I also think youd have an easier time financing a new car. Nothing fancy or anything. Maybe a nissan versa or a kia. you can get a basic one for around 12k. With those scores and a couple grand down should be an easier approval. Good Luck!