Hi everyone,
I am new to the community and am really need some advices on obtaining auto loans. I recently paid off all my CC balances and according to the simulation tool, my TU FICO score would fall in the 723-763 range. With that score, I would qualify for Tier 1 rates. But the problem is my credit history is very recent with the longest CC opened 2 years ago. Other than that my report is free of lates, bankruptcies..etc. My monthly income is $2500 before taxes and I am gonna put 3k down on the used Audi A6 valued at 26k. Would that negative bring my application down?
Thanks for reading. Your advices are really appreciated. 
@Anonymous wrote:Hi everyone,
I am new to the community and am really need some advices on obtaining auto loans. I recently paid off all my CC balances and according to the simulation tool, my TU FICO score would fall in the 723-763 range. With that score, I would qualify for Tier 1 rates. But the problem is my credit history is very recent with the longest CC opened 2 years ago. Other than that my report is free of lates, bankruptcies..etc. My monthly income is $2500 before taxes and I am gonna put 3k down on the used Audi A6 valued at 26k. Would that negative bring my application down?
Thanks for reading. Your advices are really appreciated.
First of all, congratulations on getting off to a good start with your credit history. If you manage to control your impulse buying decisions such as buying a used Audi A6 that costs around the same as you make gross in an entire year, you'll end up with an 800+ score in 4-5 years. The Luxury German cars are a joy to drive, I've had 3 BMWs...but I can tell you that they don't age well like a Honda Civic would as an example. You'll be much better off spending 18k on a new Honda Civic LX, which can give you at least 10 hassle-free minimum maintenance years of use. In those 10 years, you can save money as your income increases instead of using it to pay off interest.
Unless you live with your parents, pay no rent, and have them pay for all your groceries, it's a bad decision to spend this much on a car that's going to be expensive for you to maintain. Wait until you can pay cash for it, and then actually use credit if you can get 2.9% interest like I did on my certified pre-owned X5. I walked into the dealer with my checkbook ready to pay cash, but decided to go for the excellent 2.9% financing that they were offering at the time and let my cash ride on the stock market which was at close to generational lows last year.
If you don't want to listen to me as far as my preaching about good sense and you do decide to get the Audi A6, then you'll need a co-signer in order to get a good interest rate on your loan given your limited credit history. But then again, you must be living with your parents if you can afford to buy a car that's equal to your yearly gross wages (before any taxes, social security, 401k, health insurance, etc are deducted)....so you can get them to co-sign for you.
@Mark_in_Pasadena wrote:
@Anonymous wrote:Hi everyone,
I am new to the community and am really need some advices on obtaining auto loans. I recently paid off all my CC balances and according to the simulation tool, my TU FICO score would fall in the 723-763 range. With that score, I would qualify for Tier 1 rates. But the problem is my credit history is very recent with the longest CC opened 2 years ago. Other than that my report is free of lates, bankruptcies..etc. My monthly income is $2500 before taxes and I am gonna put 3k down on the used Audi A6 valued at 26k. Would that negative bring my application down?
Thanks for reading. Your advices are really appreciated.
First of all, congratulations on getting off to a good start with your credit history. If you manage to control your impulse buying decisions such as buying a used Audi A6 that costs around the same as you make gross in an entire year, you'll end up with an 800+ score in 4-5 years. The Luxury German cars are a joy to drive, I've had 3 BMWs...but I can tell you that they don't age well like a Honda Civic would as an example. You'll be much better off spending 18k on a new Honda Civic LX, which can give you at least 10 hassle-free minimum maintenance years of use. In those 10 years, you can save money as your income increases instead of using it to pay off interest.
Unless you live with your parents, pay no rent, and have them pay for all your groceries, it's a bad decision to spend this much on a car that's going to be expensive for you to maintain. Wait until you can pay cash for it, and then actually use credit if you can get 2.9% interest like I did on my certified pre-owned X5. I walked into the dealer with my checkbook ready to pay cash, but decided to go for the excellent 2.9% financing that they were offering at the time and let my cash ride on the stock market which was at close to generational lows last year.
If you don't want to listen to me as far as my preaching about good sense and you do decide to get the Audi A6, then you'll need a co-signer in order to get a good interest rate on your loan given your limited credit history. But then again, you must be living with your parents if you can afford to buy a car that's equal to your yearly gross wages (before any taxes, social security, 401k, health insurance, etc are deducted)....so you can get them to co-sign for you.
I have a bad habit of over-stating things, so please bear with me.
14 years ago (during my senior year in high school), got into accident that somehow led to a guy threatening me with some sort of action to my credit history. I don't remember the details, other than my brother took care of it (supposedly, I can only assume so since I haven't heard anything about it since).
13 years ago, I applied for a "pre-approved" credit card, got denied (I don't know why, though the above statement could be it). Since then, I've ignored all matters regarding credit and relied on cash, and eventually debit card, for all my purchases.
2 years ago (more like 20 months), long story short, I had to restart my life. I work at a restaurant doing deliveries. I use a 1999.5 Nissan Pathfinder (the ".5" means late model, aka mid-year change). I live with my sister and her family (the truck belongs to her husband), while I don't pay rent, I do pay for gas, electric, and TV/internet bills. I began putting $400+ per month into my savings account, which I do not touch.
14 months ago, applied for an American Express CC (so I could use it with Costco), go denied.
13 months ago, applied and got a $500 secured CC from BofA.
6 months ago, applied for an Auto loan for the amount of $21k from BofA website, got denied. That was a mistake as I had intended on putting a down payment on the car. Also had the limit on my secured card increased to $1000.
Last week, applied for an auto loan again, for the amount of $10k from BofA website. got denied again.
My TU and Equifax FICO scores are 709 and 706, but with only a single line of credit that is only 13 months old. There are no other negatives that I could find other than having two inquiries listed, both from BofA (dated the same time as my application for auto loan). Did not find any inquiry from AMEX, which I thought was strange.
That being said. I feel that I need a new car, and soon. As stated above, I am driving a Pathfinder SUV. During the last two winters I averaged 13-14 MPG. Unfortunately, summers aren't much better. According to my last fill up, I managed to eek out just under 15 MPG for that tank. Unfortunately, that pushed the limits me being frugal. The car I intend on buying is the Honda Fit. According to the updated EPA, its MPG rating is 27/33/30 (city/highway/combined avgs). While I'm fairly certain that I don't drive anywhere nearly as frugal as some Fit drivers that claim to get 38 MPG or so, I'm sure I should be at least able to keep it to about 27 to 30 MPG. Which is double the Pathfinder. I estimate the savings in gas is between $150 and $200 per month depending on how busy I am. Just for reference, in the last 20 months that I've been driving the Pathfinder, the odometer has gone from 77,000 to over 104,000 miles, and I have put on nearly all of it. Not to mention the maintenance that I have had to deal with.
I have, between my savings account and some cash on hand, almost $12k to put as down payment for the car. As I've said, the car that I want is the Honda Fit, the trim level is the Sport w/Navigation. The price for that trim (after taxes and other fees) is just over $20k. Using $21k as the cost and 12k as down payment, making it a $9k loan with an APR of 7.3% (based on my fico score on this site) for a 60 month loan, I get a calculated monthly payment of $180. I honestly DON'T expect to get that APR, and might get something higher, but for the most part, I am aiming for a monthly payment of about $200.
While I will have to pay additional cost in insurance, most of the loan is already offset by just the difference in gas. I intend on diverting my savings deposits to pay off the remainder (including insurance), since that was one of the goals of that savings account in the first place.
Of course, with each passing month, I will have an additional $400+ to put as down payment. If I really wanted to pay it all in cash, I could do just that in about 2 years using my savings and cash on hand. The base model of the Fit would cost me about $4k less than the Sport w/Nav, meaning I could get that one even sooner.
The thing is, I really do want the Sport w/Navigation, it's the only model that offers a number of convenience options and one safety option, VSA (vehicle stability assist). This would be my first NEW car and also the first car I bought. The last car I considered mine, was bought by my father from an auto-body shop, it had been salvaged from front and rear end collision that totaled it. I want the pride of getting my own car, and something that I got with all the things I wanted, not something with too many compromises.
That selfishness aside, I feel that I "should" get a loan. I know that getting a loan has a negative short term impact on my FICO score. But, I also know, or at least I think, it would have a long term positive impact.
Would I be more likely to get a loan if I talked to a loan officer in person, as opposed doing via online website? I've seen a couple of other similar topics on these forums that mention going to credit unions.
Mark, do you (or anyone else) have any additional advice?
Wow, this was pretty long...
+1 to Mark_in_Pasadena, great advice!
Goobers, I think you'll be very happy if you go to a local credit union and speak personally with a loan officer. 
