Hi everyone! I'm so grateful for this board. I've learned so much that has helped me!! I'm wanting to get approved for a car loan so I figured this would be the best place to ask for help.
July 2018, I had my car repossessed. I had gotten it from CarMax via Santander. I believe the APR was around 18%, maybe a little higher. It wasn't until a few months before the car was taken that I realized most of my payments had went to interest and not the princible. I had the car for almost 3 years. To make a long story short, my credit dropped down to 430. Ironically, the repo actually "helped" my credit once the account was closed.. it shot up 111 points. Since then I have gotten many things removed from my report. I still have at least 10 items to challenge per each bureau but I'm now at a 590.
In October I got approved for a $14,000 car loan from Credit Acceptance at 22% interest, but the car was sold from under me. But at this point, I really NEED a car. I'm looking at going back to CarMax because I want something that's reliable and I trust (my car had no issues). But because Santander is still on my report as a charged off account, I'm not sure if I'll be approved for any of the other CarMax lenders. Can anyone offer advice?
If you "need" a car, then here is my following advice.
1. Determine a monthly car budget. (include car payments, insurance, gasoline)
2. Save 3x your monthly car budget in cash. Now you are mostly safe from reposessions, and other negatives.
3. Don't worry about APR, your goal is to buy a car you can afford. APR will determine what cars you can afford, but the goal is reliable mobility, not the perfect deal.
4. report back to us, and we can help you math out different car options for the best bargain. Doesn't matter if you save 50 a month on the car, if you pay 30 extra in insurance and 40 extra in gasoline. A holistic picture is needed.
I would recommend getting a car loan through a Credit Union or a Bank you use/trust THEN go to the car place of your choice you won't have to worry about what place they send you through and you won't have to worry about a ton of hits since then that will affect your score too! If you lived in the Southeast region (Ga specifically) I can tell you some good dealerships to try.
If you've been getting around this long without a car, hold tight a little longer and just buy something cheap and pay cash.
There ARE reliable cars to be had for not much money. Find a good mechanic and have it checked out before you buy. A buddy of mine left NYC a few years ago and moved to Ohio and of course needed a car. He bought a Volvo wagon that was in great shape with 150,000 for like 3 grand, had it checked out by a shop a friend recommended, and is about to turn 200,000 on the thing with no major issues to date.
Continue getting your credit cleaned up and finance your next car without 25% interest or whatever.