Need a new car loan - Poor credit

[ngerasimatos]

Current scores are as follows (see below)

TU= 523

EQ = 527

EX = 567

I have a 2008 Lexus IS350 that I leased through Toyota Financial and owe 41k on, I know I am upside down about 8k on the car and will be putting 4k down, I am hoping with the current rebates and financing incentives I can cut that down a little as well. I need something that is AWD since Washington State has been having a terrible winter and my car is basically worthless in the snow and ice. What are the chances I am going to get financing and what banks should I start looking at first?

Thanks!

[SCF]

I think you will find that lenders will refuse to roll negative equity into your loan with your scores.  We're seeing that even people with great scores are finding it nearly impossible to borrow or refinance more than the value of their vehicle.

Is there any chance you could get out of the lease via a lease transfer?

Otherwise, I think your only option would be to find a way to cover the negative equity with a much larger downpayment.

Have you thought about just investing in good snow tires/chains for your car and trying to muddle through this winter will you get the negative equity taken care of?  I drive a front wheel drive sedan here in Montana and while there are definitely days when I could use the ground clearance of a larger vehicle, I wouldn't trade my fuel economy and lower maintenance costs in the summer for the little bit of extra winter utility on the paved roads in the winter (AWD = all-wheel-sliding on truly icy surfaces). 

Now, if you have to drive down a dirt road to get to your house every day, that may not apply for you, because I know there are times and situations where you really do NEED AWD, but I don't think you're going to get out from under your car without taking care of that negative equity somehow.

Good luck, and stay safe!

[ngerasimatos]

Well, assumnig I am upside down 8000 and the rebate for the new vehicle I am looking to purchase is 6000 and the dealer is knocking off 2000 off the selling price, plus I am putting down 4000 cash. I dont see my total exceeding the MSRP of the new vehicle.

Transfering the lease is an option, but I doubt anyone wants an 800 monthly car payment in this current economy.

On the Lexus IS350 you cannot run chains, I would need to invest in snow tires and from my reading, they dont offer much help in the snow for this vehicle.

[SCF]

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@ngerasimatos wrote:

Well, assumnig I am upside down 8000 and the rebate for the new vehicle I am looking to purchase is 6000 and the dealer is knocking off 2000 off the selling price, plus I am putting down 4000 cash. I dont see my total exceeding the MSRP of the new vehicle.

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Wow, well done on the nice deal there, $8000 off the MSRP will definitely make a loan easier to get in your case.

Are you looking at a new or used AWD?  The amount of depreciation on a new car when it goes off the lot may make lenders wary.  I would start looking for a loan with the banks and CUs you already have a relationship with and any other local CUs you can think of.  CUs are the institutions that have the money to lend right now, and you're more likely to get to talk to someone directly and explain your needs, the cause for your scores and the great deal you're getting on the new vehicle, which I think would work in your favor.

Let us know how things go.

[ngerasimatos]

I am looking at a 2008 Infiniti FX35 AWD

[Anonymous]

From what I know that is a roughly a 50k car, at 8 below MSRP, yo uare still looking at a 42k loan, and in todays credit market with your lower credit scores that might be hard to obtain. Also Infiniti's are known to have poorer depreciation, meaning the car looses value faster, especially when compared to lexus (I think lexus is in the top 3 for very low depreciation). You might want to look for maybe a 2005 - 07 FX, if that is the car your have your heart set on. After looking at some prices, you can get one nicely equipped with low miles (under 20k) for about 25K, which will be a much easier loan to obtain and a much more appealing car payment for you (in this economy) Hope that helped a little.

I looked online for cars in the Seattle area, and if you go with a used 2008, you can get it for much cheaper, saw a couple for about 27k

Message Edited by andytisk on 01-09-2009 05:48 PM

[ngerasimatos]

Good point! I am going to look and see if I can find a used 2008 since I assume the banks will base on the MSRP regardless.

[Anonymous]

How did your situation work out? I am in a similar situation. I have a 2010 Lexus RX 350 that I leased through Toyota Financial Credit--my credit situation has changed dramtically since then--credits scores now in the 520s--my lease is due soon. I am severely over on miles--basically doubled them. I also bought my Lexus ES from the dealership--so the dealer knows me. I have been prettty steady on my car payments but mortgage has fallen behind as I have been supporting multiple households as other members of my family have fallen on hard times. I make more than enough money to support my home and lifestyle and will be back on track by the end of the year. I reached out to the dealer let them know that I had basically doubled my lease miles--they gave me three options

1. put down 5500 finance the car--no warranty

2. put down 12k walk away from the car and also pay for damages

3. put down 5500 got into another 3 year 15k miles a year lease--a 710 a month payment

I need a car, and can come up with the 5500. The dealer doesn't know of my changed credit score when they made this offer--but do know why I went so over on the miles was because of two deaths in the family in Atlanta, GA--I leave in NJ.

Any advice? 

[Anonymous]

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