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Kid’s 1st Car

Established Member

Kid’s 1st Car

My 20 yo daughter bought her first car today. It’s $6800, she put down $2k. The loan she got thru the dealer is at 13.9% for 48 mos.

Other than student loans, she has no credit. (We plan on working on her having a good credit score by the time she graduates).

Do you think she can refi with her bank (pnc) to a better rate? Should she try navy fed or usaa?
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Frequent Contributor

Re: Kid’s 1st Car

It does sound high.

Make sure there is no pre-payment penalty as some loans have been sneaking that back in.


I don't know what her scores could be but maybe opening a secured card or making her an authorized user on one of your cards (you need not give her possession of the card) can boost her scores significantly in a very short period of time.


The 2 things to look out for refinacing are

1) what is the loan to value - I think you are OK there putting $2,000 down on a $6,800 car but you never know without looking at NADA values.  Most lender will loan up to 110% - 120% of the NADA value.  With a high interest rate over 5 years you won't be paying down too much each month at first and the car will continue to depreciate.

2)  the age and mileage of the car at $6,800 its definitely a used car with some years and miles under it's belt.  Many lender limit how old or how many miles can be on a car.  


If she has a relationship with PNC maybe she can ask them what her chances are, what particular score they use and other factors so she can know before wasting a hard inquiry although if done in a short period of time they are really grouped as one inquiry so there is little harm in applying now.



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