Looking to finance a car within 6 moths and want advice

[vivekp01]

As the title states im looking to buy a car within 6 months (~20-25k). Currently I have 2 credit cards. I keep utilization under 20% and pay in full every month. All my student loans were paid off a couple of years ago. Is there anything I can can do to get better financing? I'm thinking not having any recent loans will hurt but I'm not sure how that plays into the auto score.

Discover IT (Opened as secured September 2017 and converted to non secured at 8 months) - $2,700 limit
REI World Mastercard (Opened May 19) - $20,500 limit

FICO - 738 according to Discover and 751 according to experian.com. Not sure on the auto score as I haven't bought one yet.

[Anonymous]

Taking out a loan just to get a slightly better rate on another isn't worth it.
Your auto loan rates are going to be good as it is.
Just remember to have one card reporting a balance, while the other is reporting no balance.
You can soft pull your auto loan scores from sites for $1 and then cancelling membership. I wouldn't bother until you get closer to the car purchase. Your score should be slightly higher by then, as your newer card will be over a year old, the inquiry for it will no longer have a scoring impact, and just in general your aaoa & aaooa will both be higher.

If you want to lower your monthly payment, a larger down payment is the way to go.
Not sure how you can squeeze in more income or budget any harder? No problem--just shuffling your money around. Many banks offer $150, $200, and $300 bonuses just for opening a checking or savings account with them. A couple will go as high as $500 or $600 at times, if you park enough money there (10-15k). Usually you have to keep the account open for 90 days for the bonus. Since you're waiting 6 months, you have time to hit up a few offers at the same time. Should be able to rack up an extra grand, even without the bigger bonus ones.
Making 500 off of 15k is a 3.33% bonus. And in only 3 months...that's like sitting the 15k in a 13.3% apr savings account for 3 months--that doesn't exist. Keep in mind, the 15k for 3 months is likely sitting in a 2% apr savings account already. 2% for 3 months is .5%.
So you would be withdrawing the initial 15k, $75 in interest, plus the 500 bonus. 575 in 3 months for doing nothing? Risk free? Not bad!


You could also look into joining a credit union. Usually they'll offer better rates on auto loans than banks will. Hopefully others will be able to reccomend good choices for credit unions for auto loans. Many credit unions will offer membership if you simply make a $5-20 donation to a select charity.

Edit: food for thought: when I had two cards and opening my 3rd, the inquiry slightly lowered my scores, but after my 3rd card began to report, my score was higher than before just from having another active line of credit open. YMMV, but this tends to happen for many.

If feeling it, you could consider opening a 3rd card that offers 2% cash back and has a sign up bonus. It varies by dealership, but some will take your full downpayment on a credit card (my brother put his large downpayment on a Lexus through his Cap1 QS to get the 1.5% cashback). Remember,  only put a downpayment on the card that you actual have the cash to pay off the next day.

If you can hit the SUB spending requirements now through normal spending, opening the card sooner than later would be better, to let the account age.

If not mistaken...Penfed credit union offers good auto rates (and often sends you preapprovals?).  They also offer a card that is 1.5% cash back (2% if you open a checking account with them) , with a small but easy to hit sign up bonus. I think I've read they like people with good scores & smaller credit files? Should be able to get approved. They're one of the credit unions that extend membership with a small donation to a charity.

I'm considering them, as I'm considering a good 2% card with 0% FTF that is Visa or MC. Plus I'll likely be buying a house end of 2020, so might be able to get an extra good mortgage rate from them.

[vivekp01]

This is some really great info! I already knew about the bank promotions but haven't really been actively moving money much this year. I used a fifth third $500 promo for a 15k deposit a few months ago but haven't really done any others. Chase is offering 1,000 but they want 75K which is too much at the moment. As for the credit union i'll have to start doing some research on any that could be viable options but from what you mentioned penfed sounds like a solid choice right off the bat. I'll also have to look into opening a new CC soon so I can get it reporting prior to starting the auto loan process. 

I've been keeping 1 card setup for a couple of bills and mainly using the other for 1 or 2 gas purchases a month but it sounds like it may be better just to keep the second at a 0 balance.

Thanks again for the info!

[Girlzilla88]

I wouldn't keep the other at 0 but low maybe 1 or 2% but I do agree with CU read up on PenFed though as they are a bit tougher and have been denying a lot of people lately.     Definitely let your newest card hit the 1 year mark like they said that will help you a lot and when you check your Car scores minimal they should be 650 middle for a 'better rate' but if you are over 7 even better and if you hit middle 750/760 that is 'top of the top' lol but another thing to keep in mind too is to check what the dealership is offering as far as promotion/sales go.     If the dealership has a promotion going on for 0% apr for qualified buyers I would take that and RUN WITH IT!!   LOL    A bank/CU won't get you that low and that would help when you go to trade if you decide or pay it off faster to keep etc as it will all be going to principal.        Looks like you have a good head on your shoulders though and keep us posted

[Anonymous]

Oh, just for clarification on the credit card balances thing:
It's okay to be using all your cards. Just when you're getting ready to take a real look at your scores, you'll want just one and only one showing a small balance (under 8.9% util), as this will maximize your credit score for your personal credit history/report.

This also doesn't mean you can't use other cards for the month prior to getting your best scores pulled. It just means pay the balance off in full before it reports. If a card's statement cuts on the 20th, you should stop using that card a few days before & pay it off completely. If you're going to not bother checking scores until right before the auto loan, I'd stop & pay 5-7 days in advanced. Just extra precaution for if a charge is pending still and doesn't post until the 19th, not allowing your payment to process fast enough (or for you to even notice it), or a restuarant you went to added on the tip days later.

For additional information on this, just search around for AZEO (all zero except one), either on Google or through the search function on the forums.

[randomguy1]

You can get $600 for a combined Chase Checking + Savings bonus. 

https://accounts.chase.com/consumer/banking/online?px=YZ23292&jp_aid_a=54209&jp_aid_p=retail_checkin...

HSBC is offer 750 for 3 months of 5k ea direct deposit. 

Citibank has a combined bank bonus of $500 with checking, savings, and one DD. Their savings account earns better interest than Citi as well. If you live in a state that has their accelerated savings, it is one of the higher savings accounts. Right now it is 2.05 and was just recently 2.21.