Need to finance a used car- how much will i have to put down?

[glamchick]

I am interested in financing a used car for about 10,000.  My credit scores are 655, 661 and 665 and i have a bankruptcy from 2001. 

1.  Do you think I can get away with only putting down 1,000?

2.  The mileage is about 95,000 do you think they will finance a car to me with high mileage?

Thanks for your help

[cobra19]

Would a lease work better for you?

[glamchick]

no I dont think i can get approved.  I think this SUV i want is a really good deal so i would rather finance.

Do you think I can get a warranty as well?

[Anonymous]

My husband and I bought a 2001 Yukon XL this January, with scores a bit higher than yours (upper 600s to lower 700s) and no bankruptcies.  He'd never had a car loan; I had one that was paid off 4 years ago.

It was about $11k, 103,000 miles, we put $1000 down.

The biggest problem we ran into is that some banks won't finance a vehicle that old or with that high miles, and the ones that would, offered higher interest rates and shorter terms.

If you can find a vehicle that fits your needs in your price range, but is 2002 or newer, and under 100k miles, you'll have a lot more options for good financing.

It is doable, though.  I would strongly suggest lining up financing beforehand with a credit union or the like- we're going to refinance the loan in the near future with USAA to get a better rate (now that I've gotten added onto the USAA).

-MsMS

[glamchick]

Thanks MSM.

[Anonymous]

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@Anonymous wrote:

My husband and I bought a 2001 Yukon XL this January, with scores a bit higher than yours (upper 600s to lower 700s) and no bankruptcies. He'd never had a car loan; I had one that was paid off 4 years ago.

It was about $11k, 103,000 miles, we put $1000 down.

The biggest problem we ran into is that some banks won't finance a vehicle that old or with that high miles, and the ones that would, offered higher interest rates and shorter terms.

If you can find a vehicle that fits your needs in your price range, but is 2002 or newer, and under 100k miles, you'll have a lot more options for good financing.

It is doable, though. I would strongly suggest lining up financing beforehand with a credit union or the like- we're going to refinance the loan in the near future with USAA to get a better rate (now that I've gotten added onto the USAA).

-MsMS

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Really really high miles. I got my car in Feb 07 and I had a choice between two cars. 1)2005 with 15k on the clock for 9k, 2)2001 with 90k on the clock for 9k, guess which one i chose?

[Anonymous]

Most banks won't finance a used vehicle over 5 years old or over 100k miles or at least not where I live. I'm impressed with your results!

[BooBee]

10k is a lot for such high miles for a used car.  My wife and I got a used Mitsubishi with 42K miles for 10K; total was about 12k after taxes and fees with $500 down.

The problem with getting financing with high miles is that the bank does not want the car to break down to the point that you don't want it anymore and default on the loan for a useless car.

You should try getting a pre-approval before you buy the car this way you know what your maximum financed price will be before you get to the dealer.  It would also give you confidence in knowing you have the pre-approval before hand and can give you the upper hand knowing you have 10K guaranteed to spend.

But to answer your question directly, the down payment depends on your lender.  Our bank asked that we put down $500 before we were approved for 15K.

[Anonymous]

Yeah, I wasn't particularly sanguine about a truck that old (particularly an American vehicle; I had too many bad experiences stranded in my parent's clunkers as a kid).  But it really was about the only thing that would work for all the various needs (large climate-controlled space for high-dollar sensitive electronics, tow an 8000 lb trailer, carry 4 adults on long trips while towing the trailer...)  The newer ones were way out of the price range, though.

Take it to a mechanic you trust (not one recommended by the dealer/seller), and have them look it over well.  It may need a timing belt, brakes, or other somewhat pricy periodic repairs; you may be able to use that to negotiate on price.

-MsMS

[Anonymous]

You say the vehicle is a "really good deal" are you sure it not that you just "really want it"?

No vehicle with 100K miles and a $10K loan is a "good deal". Have you looked at the endmunds or kbb trade-in value (not retail or private party but trade in value) for the vehicle. Now drop off about 5% and that is what it is "worth".

Mind providing the make, model, trim, options?

You have three strikes against you
1) credit scores - while not horrible they will banks uneasy and require a higher APR. Banks aren't looking for even MORE risk. That want to give you a "vanilla" loan (newer car, low miles, payments 20% of gross pay, 10% downpayment).

2) Car has very very high miles. Banks aren't going to have a mechanic inspect vehicles so they look at the market value and miles to determine what is the vehicle worth if they need to repo it. What is the vehicle worth today? On a 4 year loan you will pay down about 1/3 at halfway point. Check value on Edmund's for a vehicle 2 years older and with 24K more miles. That will give you an idea what the vehicle is worth in 2 years.

3) Lastly how much do you have put aside for maintenance & repair. A car with 100K miles is going to have more out of pocket expense than one under warranty. A car that is broke down out of warranty is massively more likely to be reposed. If 2-3 months from now you need to drop $2K into the vehicle (on top of your car payments) will that be a problem?

It comes down to wants vs needs. Are you sure this is something you "need" or something you "want".