Help Me Plan an Auto Purchase

[JustKeepSwmng]

I just totaled my car recently. Fortunately I'm well insured, loan was paid off and got a nice settlement too. Used some to pay down my utilization last week. Still have plenty for downpayment and OTD fees upfront. Reports are updating in the next week for the paid cards and will be under 30%. My existing auto loan (only one), will also get paid off, currently balance of $19k, and at the same time a $10k personal loan was just paid off this month and will update as well.

Some factors:

- I want the lowest APR possible obviously. My existing/closing loan had an APR of 2% w BOA (Miss you 2022). 

- I am looking to switch to EV, and for that reason want to buy used as the deals are great. Lower end of my bduget is $32k for the lower end option to $45k to get something similarly fun to drive like my old ICE.

- I have free charging at work and at home, so the savings are hard to turn down.

- Today my score is 720 with 85% utilization reporting (before the payments this week)

- BOA offer 7.5% APR w this score. I havent sent additional apps yet.

- My FICO simulator on AMEX, Experian, and FICO all suggest that I will see a score bump to at least 776-790, so waiting for that.

- If it matters I am looking at a used CPO i4 xdrive vs i4 M50 to purchase. I see 23/24/25 models near me that are $20-$40k down from New.

Questions:

- Should I put another $5-8k to get it under 10% util? Or is that better served w a larger downpayment, or HYSA or something else?

- Where to apply? Quick seard I see averaging of 6-9% so BOA rate seems typical

- Credit union?: Kinda already know answer is yes. But is any particular one the one to go with?

I'm  not familiar with any credit union, have only banked with BOA ever. However, just got a referral for Navy FCU from sibling, Also have parent with EdSysFCU, they have low 5%. Open to others, looking into PenFed. 

[Patient957]

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@JustKeepSwmng wrote:

Questions:

- Should I put another $5-8k to get it under 10% util? Or is that better served w a larger downpayment, or HYSA or something else? 

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Assuming you're paying CC interest rates on your utilization, you're much better off paying that down as low as possible vs a higher down payment or HYSA.   It's just a matter of comparing interest rates.  

 However, just got a referral for Navy FCU from sibling, Also have parent with EdSysFCU, they have low 5%. Open to others, looking into PenFed. 

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Navy is probably a smart move.

 My existing auto loan (only one), will also get paid off, currently balance of $19k, and at the same time a $10k personal loan was just paid off this month and will update as well.

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Be careful not to close your last open installment loan.  If you do, you may lose some points due to the 'no open installment loan' penalty.

[JustKeepSwmng]

Great points. The CC APRs def all higher. I'll work on the util.

Should I open the Navy now even though I won't apply for the auto loan for a week or two? Is there a cooling period for new members? 

I have student loans and a diff personal/medical loan that would still be active. But good point too. 

[Patient957]

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@JustKeepSwmng wrote:

Great points. The CC APRs def all higher. I'll work on the util.

Should I open the Navy now even though I won't apply for the auto loan for a week or two? Is there a cooling period for new members? 

I have student loans and a diff personal/medical loan that would still be active. But good point too. 

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I'm not a member of NFCU, so I don't know the details.  I would join as soon as possible, though.  I'm pretty sure you can apply for a loan as soon as you become a member, but hopefully others who know for sure can chime in.

[JoeRockhead]

Navy is a great CU, but I would say to join sooner, rather than later.  I don't know that there's an official waiting period.  They'll base approvals primarily on your outside scores and the strength of your reports. However, they also weigh your internal score with them.  This would, in part include how long you've been a member.  Now, how much that weighs in their scoring... we'll never know. 

I've never been rejected for any credit product from them, and I've never had any more than a modest checking and savings account.  I'd go ahead and join if they interest you... better to have it and not need it, than to need it and not have it.  

[JustKeepSwmng]

Thank you! Very helpful. I'll apply for membership tonight.

[LIGHTNIN]

The best time of year to buy a vehicle is around memorial day in May.

The worst time is at the beginning of the year.Why? Because dealerships jack up prices,due to people getting their tax returns. 

To find a car, at a price i could afford.  I tracked prices on cars.com and carfax. I watched how much $ the car, dropped in price by noticing their schedule of changes. Like some were weekly, biweekly,10 days, 3 weeks.

Another helpful advice I used, that worked.  When I went in, I told them the price  i was willing to pay, it's called  "total price out the door".

[Patient957]

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@LIGHTNIN wrote:

The best time of year to buy a vehicle is around memorial day in May.

The worst time is at the beginning of the year.Why? Because dealerships jack up prices,due to people getting their tax returns. 

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Ray Shefska from Caredge says the end of the year is the best time to get the best deals, particularly the week between Xmas and New Year.  

https://www.youtube.com/watch?v=CVLDAc2tz7w

Not saying Memorial day is bad, but certainly the OP doesn't have to wait until May to get a good deal.

[JustKeepSwmng]

Yup. I cannot possibly wait until May when I currently have no car.. I'll be getting something by Thanksgiving. 

[LIGHTNIN]

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@JustKeepSwmng wrote:

Yup. I cannot possibly wait until May when I currently have no car.. I'll be getting something by Thanksgiving. 

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Right, you don't want to buy inJanuary thru mid-May, thats when the prices are higher,

Let me say this in a different way,ok.

The first 5 months ,dealership raise prices.

You want to buy a vehicle, last weekend in May thru December 31st.

Best day of the month to buy a vehicle, is the last day of the month. 

I use to work at a dealership for 7 yrs. The sales department had contests, on who sold the most units each month, winner received a bonus, with their check. That was how it was done, where I worked at, other dealerships may differ.

I found the carfax and cars app,  very helpful. You type in the make,model and year you are looking for. Then, it would show you the vehicles available, in the area you want. App shows accident info and value price.