Ok so I recently got my license. I'm 29 years of age and this is my first time buying a used car, or rather a car in general. I've been driving around here and there for the past 4 years with on and off experience. Now, I make 26k a year with my current job and go to school full time. I'm recently recovering from debt and have a 596 fico score (480 Last October). My credit ratio usage is around 3% and I do not keep high balances. I'm pretty responsible as I have to be in order to rebuild successfully. Now, I went through a prequalify with Capital one because I've been with them for over a year now with my credit cards and they gave me an offer of 8% on a 20k car. Mileage on the car is 13k and it's a Toyota Camry V6 with no bad background or issues. I know that 8% for some of you is and can be considered high but that reflects off my current credit scores. A family member told me 8% for my current score is good and it could have been worse as a ~600 score can range from 10-15%. If I have a co-signer with excellent credit sign for me as well what would my numbers look like? I know it's different for everyone and mileage will vary, but what would the possibility be? Also, putting down about 15-20% with the current interest rate above. Do you consider this a good deal? Should I apply to penfed or another CU?
Oh one more thing to add is that my monthly payments were estimated to be 384$
Things to note:
I don't pay rent where I live (family is nice enough to let me live here rent free while I focus on school)
I don't have major bills to pay
No current loans, including student loans.
Covered by financial aid for a long while.
8% is not terrible especially if the length of the loan is 6 or 7 years.
3.75% is probably best you could hope for 6 years with a co-signer with very good credit. That would save about $40/month
Try not to use a co-signer. (just my 2 cents)
Do get GAP insurance. This covers the difference between what you owe and what insurance pays if stolen/totalled. It's a very hard pill to swallow to total a car and still owe lots of money. Cars depreciate quickly and with any loan you pay more interest at first and that slowly goes down. You can download a free amortization schedule and see what you will owe after 6 months, 1 year.... I don't know about Cap1 but my credit unions charge $299 one time fee for the GAP coverage.
Capital One - your deal sound sreasonable - don't know much about car but if possible see if you can get a certified pre-owned with a good warranty. Sometimes CPO have better warranties than new. Captial one is a bird in the hand but may or may not be your best rate.
I feel since capital one looks at all 3 scores they try and find a way to screw you. Most lenders pull 1 score.
If you know what your real FICO scores are and not just the FICO 8 you can try and find a lender that uses your best score.
For example DCU uses your FICO Mortgage score and Visions (local CU) uses Experian Mortgage Score. I just refinanced from 8% for 7 years to 3.75% for 6 years with Visions - they gave me an A rating, but Capital One would have looked at 3 auto scores and likely come back with a lower rate.
Also what is your history when was your last late? Any bankruptcy, any open collections.
That info with your FICO scores could help us recommend something better.