OMG QUESTIONS!! New to Auto Loan

Anonymous · ‎11-09-2018

I am planning to buy a used car soon and I have so many questions. This is my first car and I want to do everything right. My brother was ripped off by his dealer so I want to make sure I don't make any mistakes. I have no one to help, so asking my Fico family.

So I am thinking of buying a used 2015 Maserati Ghibli, price range is between 32-35k with less than 25k miles on it. I live in CT but most of the dealers I am looking at are either located in NJ or NY.

Here is some info:

Credit Score: Fico 8: 706, Fico Auto 8 - 712

AAoA: 3.7

# of positive trade lines: 4

# of negative trade lines: 2 (1 settled charge-off, 3 late payments on one of the positive accounts above)

Income: 90,000

Lenght of Employment: 3 years

Previous Loan Experience: None

Debt-to-Income (DTI): 15%

Year of Car: 2015

Miles: Less than 25k

Purchase/Refinance: Purchase

Requested loan term (XX Months): 60

Down payment amount: 3000

Co-borrower/Co-Signer: None

P.S Just checked capital one auto navigator, shows that I am pre-qualified. Doesn't show the APR and monthly for the car I am looking at but it's 5.53% for used 30K car.

So I have a lot and lot of questions, hope I don't bore you! I will list them below

1) Should I only communicate with the dealer through email? If so are there any examples of emails to send?

2) What all should be considered as unavoidable expenses (I am not looking for any add-ons at all)? - Cost, Registration, Taxes what else?

3) Let's say if the price mentioned online is 32k (some dealers mention, only for buyers who qualify for all rebates - eg active military discount), how much should be my first bid?

4) With my credit score, what APR am I looking at? WOuld a CU approve me for a loan with my charge-off and lates? (I am pre-qualified for capone)

5) As mentioned in question (2), What should a final price include, without any unnecessary add-ons?

6) I might be moving to Florida, should I register my car there or in CT? I know CT has yearly car taxes, not sure about FL.

7) Getting a pre-approvals from CU, will it be a SP or HP? And if its a HP, I can ask CBs to remove all except one right? If its within a certain time period?

That's all I can think of right now lol. I will post more questions if something bothers me.

THank you my Fico Family <3

Anonymous · ‎11-09-2018

7) CB's wont remove hard pulls but they are scored as 1 if within a time period and all for auto financing or mortgage

6) Register your car where you currently live. If you move to FL then you will save on annual car taxes but you don't want to get in trouble having your car registered in a state where you do not reside. It's real tempting especially here in NJ where car insurance is so much but not worth it.

5) Dealers have a doc fee, taxes and motor vehicle fees. If buying out of state you may have to pay the motor vehicle yourself when you register it. I believe that's what I had to do when I bought a car in CT and lived in NJ.

4) Depends on who. My Credit Union DCU seems to use the Equifax Mortgage Score their rates are posted on their website. If that was your FICO Equifax Mortgage score listed you should get their best rate but it's hard to tell what scoring model you are listing. Also how long since late or anything negative. If >2 years should not be a problem with DCU if less I don't know.

3) Usually those stipulations are just on new cars. What should you offer? I don't know, don't know what comparable ones go for for the same mileage and condition but see if you can get their price through email or phone because you are traveling from out of state to get here.

2) Motor vehice fees, dealership doc fee and that should be it. They could try and sneak in Window Etching for $399 but refuse to pay for that scam.

1) These days they want to make phone contact immediately and get you in as soon as possible. Maybe if you explain you are from out of state and can't waste time and need to work things out first before you come in then it's OK but be prepared for your phone to ring.

DCU will finance up to 120% on a cars value so if it's a good deal you may not need to put any money down. Not necessarily suggesting that because you could find yourself upside down on the car but I read about how a loan is considered new until 35% paid off so if you took the larger loan and put the $3,000 as the first car payment you might be better off and roughly 10% of loan paid off already.

Also you must get GAP insurance. DCU charges $299 split over monthly payments. 1) If car gets stolen or totaled they zero out loan and you owe nothing 2) they will pay up to $1,000 of insurance deductible 3) they will credit you another $1,000 if you finance another car with them within I think 60 days. Regardless of who the loan is with you really need GAP because it would really hurt to lose the car and still owe money on it.

KLEXH25 · ‎11-09-2018

@Anonymous wrote:
I am planning to buy a used car soon and I have so many questions. This is my first car and I want to do everything right. My brother was ripped off by his dealer so I want to make sure I don't make any mistakes. I have no one to help, so asking my Fico family.

So I am thinking of buying a used 2015 Maserati Ghibli, price range is between 32-35k with less than 25k miles on it. I live in CT but most of the dealers I am looking at are either located in NJ or NY.

Here is some info:

Credit Score: Fico 8: 706, Fico Auto 8 - 712
AAoA: 3.7
# of positive trade lines: 4
# of negative trade lines: 2 (1 settled charge-off, 3 late payments on one of the positive accounts above)
Income: 90,000
Lenght of Employment: 3 years
Previous Loan Experience: None
Debt-to-Income (DTI): 15%
Year of Car: 2015
Miles: Less than 25k
Purchase/Refinance: Purchase
Requested loan term (XX Months): 60
Down payment amount: 3000
Co-borrower/Co-Signer: None

P.S Just checked capital one auto navigator, shows that I am pre-qualified. Doesn't show the APR and monthly for the car I am looking at but it's 5.53% for used 30K car.

So I have a lot and lot of questions, hope I don't bore you! I will list them below

1) Should I only communicate with the dealer through email? If so are there any examples of emails to send?
2) What all should be considered as unavoidable expenses (I am not looking for any add-ons at all)? - Cost, Registration, Taxes what else?
3) Let's say if the price mentioned online is 32k (some dealers mention, only for buyers who qualify for all rebates - eg active military discount), how much should be my first bid?
4) With my credit score, what APR am I looking at? WOuld a CU approve me for a loan with my charge-off and lates? (I am pre-qualified for capone)
5) As mentioned in question (2), What should a final price include, without any unnecessary add-ons?
6) I might be moving to Florida, should I register my car there or in CT? I know CT has yearly car taxes, not sure about FL.
7) Getting a pre-approvals from CU, will it be a SP or HP? And if its a HP, I can ask CBs to remove all except one right? If its within a certain time period?

That's all I can think of right now lol. I will post more questions if something bothers me.

THank you my Fico Family <3

I just bought a car so I know how you feel. Although I bought new, I imagine the experience is almost the same, especially if you’re going to finance. First, identify what features, options, colors, etc you’re looking for and then find as many dealerships as you can that have these cars. Next, I’d research the fair market price for your car (I like US Car News, Kelly Blue Book, and Car Gurus). Since you’re buying used, the fair price can vary a bit depending on mileage and condition. I like Car Gurus because it will compare the fair price and list price to let you know if you’re getting a good deal. It also tells you how long the car has been listed, price changes, etc. All of which you can use to negotiate. Then, to be sure you can afford the car, play with online car calculators to figure out what your monthly payments would be. Make sure it’s within a range you can afford and calculate the max amount of car you can afford. Typically I would take the MSRP + $1000 in misc fees. Add tax to that and you’ll have the approximate final cost of the car.

As for financing, once you’ve figured out your price range and have found several available cars, look into a few financing options before setting foot in a dealership. This will at least give you an edge, since they can try to squeeze more money out of you through financing. I did Capital One and DCU (they gave me a better rate then Capital One) once I knew I was 1-2 weeks ready from pulling the trigger. Finally, I emailed several dealerships for pricing on the particular car I wanted. Basically something along the lines of, “I’m very interested in this car, but I’m out of state. Can you give me a price quote?” Now be ready for varying results. Some wouldn’t give me a price and asked me to come in, but I was persistent and adamant. Others gave me a price right away, one of which was exactly what I was looking for. Make sure to give them some time and check your spam box. I missed a few offers because of that. ALSO, do not let them steer you away from the conversation of price. Many tried to size me up regarding finance and asking me all sorts of questions. Just give them the basics and tell them you’re just looking for prices at the moment. It’s ok to tell them that you already have financing lined up but will let them find something better (DONT tell them your interest rate). Once you get a few prices, you can try to use that to negotiate a better price with one another. Some will be very willing to play along and others might give you a hard time. I didn’t waste my time with the ones that gave me a hard time. In fact I went straight to the one that made it easy and gave me the best price from the beginning. In the end, they also got me a better interest rate.