Help for First Time Car Buyer!

[Anonymous]

Credit Score: 697 Transunion/693 Equifax (credit karma)

AAoA: 7 years, 2 months

# of positive trade lines: 13 (1 credit card [only 2 months old], 12 fedloan student loans)

# of negative trade lines: 0 reporting (but I have collections/charge-offs that I PIF and are now closed)

Income: $8200/month (pre-tax)

Lenght of Employment: 1 year, 9 mos at current employer 

Previous Loan Experience: This is my first car loan

Debt-to-Income (DTI): 22%*

Year of Car: 2019 Toyota or Honda

Miles: 0 (new)

Purchase/Refinance: Purchase

Requested loan term (XX Months): 60 Months (but flexible if will help APR) hoping to get $20,000-$25,000 financed

Down payment amount: $2000 and a trade-in worth about $400 (can put down up to $5000)

Co-borrower/Co-Signer: Available

Other: 1.5 years ago I tried to buy a new car and found out my scores were in the low 500s (charge-offs, collections, defaulted student loans) and they could only sell me a Toyota Camry with a horrendous "first-time buyer" loan, I walked away. The next day I joined these forums, bought a $500 used car, and have now brought my credit scores to just below 700. Now I am ready to try and buy again because that $500 clunker is on her way out. I have read several guides on this forum already, but if any one has any advice on securing a car loan specific to my credit profile it would be greatly appreciated. I can provided any additional information on my credit history that will help.

*debt includes half rent (I have a roommate on lease), and my two student loans. I don't carry a balance on my credit card. I pay a student parent loan monthly, but it is in my mother's name...I believe I am correct in leaving this out of the calculation because it is not on my CR???)

[Anonymous]

First congrats!  It's a fantastic thing that you bought the clunker and were ablet o keep with it for a year and a half.  I am sure there were opportunities for you to get something else but you were smart and waited until you felt your scores were good.

Try and do this on your own without a co-signer it's a huge burdeon.  I know that's what family is for but unless there is no other way try and avoid it.

You are looking at Credit Karma scores which are pretty meaningless you need your FICO scores.  

Discover will give you a free FICO score even if you don't have their card.  There are other trials for $1 for real FICO scores you can probably find then cancel.  If you can get your hands on your Equifax FICO Auto score then you will have a real good idea where you stand with a credit union like DCU who publishes their rates by score.  There could be other factors like time since late but it's a good measure.  You might have to bite the bullet and join MyFICO for a month to get all the scores you need to know where you truly stand.

Even knowing your FICO doesn't always mean everything becaue the leners are probably using an Auto Enhanced Score not your FICO 8.

So let's assume those scores match your FICO Auto Scores then you should be in decent shape I think but wha do you mean by #of negative reporting 0.  Are there collections showing on your credit report even if they have a $0 balancE?

How long has it been since you were late?  Big difference between last month and 2 years ago.

Both Honda and Toyota offer in house financing and could be a little easier to qualify for then a credit union or other.

Lastly consider that financing a used car is often much easier than a new car as it is already partially depreciated.  Sometimes Certified Pre-Owned cars even come with better warranties.  I recently purchase a CPO Audi A3 that came with 46 month unlimited mile factory warranty.  The CPO is not just to save money but can also help you get the nicer model for less money.  Just a thought.

Also do not forget GAP insurance it's a must if you will be upside down for any time on the loan.  It's a horrible thing to have a total loss and after insurance settles still owe the fianance company.

[MitchDeerfield]

Instead of paying top dollar for a plain vanilla Camry or Accord, you can get a much more luxurious and less expensive pre-owned Buick Regal.  A loaded 2016 model with all options can be bought for under $16,000.  And I do mean loaded.

That model also includes  full one year bumper to bumper warranty.  Never buy a used car without a warranty.   A new Accord will cost about $25,000 if not more and will depreciate rapidly.  The used Regal is much less with a 259 hp engine, leather, moonroof, Bose stereo system, etc.  

It's your call.