Options for Auto Loan

Anonymous · ‎04-30-2018

I'm looking at needing to get a car, which I wasn't planning to do for a few months, but need to do in the next two weeks.

I'm asking about options because my first instinct was to go to a buy here/pay here but after reading more on here I realized I may be jumping the gun.

My Fico8 Scores are currently in the 550/560 range, but will be changing in the next 7 days which is why I didn't list them. I wasn't planning to do this for a couple more months, but financially my current vehicle is just not meeting my needs.

I am waiting until end of this week or first of next week after Capital One and Credit One Report. I have 3 cards with a combined CL of $800. Two of those cards totaling $600 were opened 2 payments ago and the new QS One should report this statement period with a high utilization (under limit) and paid on time as well. The other two should report with a low or $0 balance, countering some of the damage I did last month when the new Credit One card posted over limit by $80.

I also intend to switch to monthly scores with MyFico after that so I can see my scores before I got to get the loan, providing I have the chance of getting it.

Now history is $30k in defaulted student loans currently in rehab and over 5 years. One Capital One Platinum Secured $200 CL, 10 months paid on time, one Capital One QS One, 1 month paid on time (may post as 2 months), and one Credit One 2 months paid on time. All 3 cards will be on my report as of this month.

I have one collection remaining on TransUnion for $150. I intend to deal with it this week, but I doubt it will be removed before I need to get the car. Past that I have some 5 year old paid charge offs, and a PIF account from Aaron's showing.

I do not want to put a lot down, no more than $1,000 preferably around $500, and I'm looking between $7k and $20k (used to CPO).

The kicker is I also recently did a major move (500 miles).

Any advice? I'm prepared to do a buy here/pay here I would just like to see if I have better options.

sccredit · ‎04-30-2018

Have you tried the CapOne auto prequal? You might be surprised.

Anonymous · ‎04-30-2018

I did 7 days ago and was not pre-qualified. My CreditWise score is bad, at 499 for a Vantage. It took a bigger hit than my Fico scores due to the new card and overlimit. I'm not sure how much that will bounce back in the next week when the cards all report.

Anonymous · ‎04-30-2018

Check carvana.com they use FAKO scores and show your rate and monthly payment. Some people have had luck on there.

Anonymous · ‎04-30-2018

So they said 20% interest and a $350 monthly payment and I'm okay with that.

Except for the fact that the vehicles I want are priced higher than I can get them elsewhere and they want an outrageous down for them.

Anonymous · ‎04-30-2018

@Anonymous wrote:
So they said 20% interest and a $350 monthly payment and I'm okay with that.

Except for the fact that the vehicles I want are priced higher than I can get them elsewhere and they want an outrageous down for them.

Try again in 7 days when your scores update!

Anonymous · ‎04-30-2018

@Anonymous wrote:
@Anonymous wrote:
So they said 20% interest and a $350 monthly payment and I'm okay with that.

Except for the fact that the vehicles I want are priced higher than I can get them elsewhere and they want an outrageous down for them.
Try again in 7 days when your scores update!

Well what that told me is I should be able to get what I want with the down I want (which is around $500 or less). I'm looking at Subarus due to the miles I'm putting on and will be putting on. I'll probably be hitting 18k to 20k a year and I want something that will hold up. Plus I will be going from Eugene, OR to either Baker City or Vale about 10 times a year so I want the AWD for winter trips.

I'm going to wait for my credit to update, it isn't that long now. All cards should post by the first of next week, the only one in question post date is the QS One but my second statement just cut sow it should post anytime.

But that definitely helped me in decision making. I know I can likely get what I want, it's just going to be an interest rate game but I may just make 6 months of payments and refinance it.

pipeguy · ‎04-30-2018

@Anonymous wrote:
So they said 20% interest and a $350 monthly payment and I'm okay with that.

Except for the fact that the vehicles I want are priced higher than I can get them elsewhere and they want an outrageous down for them.

I understand where you are coming from but NO ONE should ever be okay with a 20% apr used car loan. My suggestion would be to pay cash for an old Honda or Toyota and live with it for 6 months while you improve your scores before you "trade up". Being okay with a 20% vehicle loan is thanking someone for robbing you (IMO of course).

Anonymous · ‎05-01-2018

@pipeguy wrote:
@Anonymous wrote:
So they said 20% interest and a $350 monthly payment and I'm okay with that.

Except for the fact that the vehicles I want are priced higher than I can get them elsewhere and they want an outrageous down for them.
I understand where you are coming from but NO ONE should ever be okay with a 20% apr used car loan. My suggestion would be to pay cash for an old Honda or Toyota and live with it for 6 months while you improve your scores before you "trade up". Being okay with a 20% vehicle loan is thanking someone for robbing you (IMO of course).

Being ok with a 20% car loan for 6 months, then refinancing, and knowing I'm in a dependable vehicle to transport my son an average of 400 miles 10 times a year is worth it's price.

There are a lot more important things than paying 20% interest and not being stuck on the road with my 10 year old son is one of them.

But I'm doing this with the intent to refinance and will not just take a 20% offer. I want to shop around now that I've read some more. Based on $30k annual, with my scores I should be able to get at least 17% from everything I'm reading.

And from what I understand adding the auto loan with my 3 CC should be a pretty good boost to my credit so after 6 months a refinance shouldn't be too difficult.

It's not that I wouldn't be ok with an older vehicle, but the high miles is what I'm dealing with on my Durango. That would be ok if I was just driving local but I don't even trust it to go 400 miles right now and an old sub $1k car won't be any different unfortunately.

Anonymous · ‎05-02-2018

Be careful with your "intent to refinance" a 20% loan.

What many folks don't realize is that lenders are only going to refinance your vehicle for what it's worth. You are generally going to be way underwater with a 20% loan, and when the time comes to finance you will need the cash to make up the difference. If you don't have a few thousand $ or whatever it is, you are stuck like Chuck with that 20% loan.

Taking a loan with these terms is nowhere near a sound financial decision no matter how you think you're justifying it. It's financial suicide.

Get a AAA membership for like $70. I do this when my cars reach a certain age and they are there in half an hour if something happens.

Alternatively, have you considered just renting a car for those trips w/ your son? To do that 10 times a year is way cheaper than getting a bad car loan. I have many friends and family that drive clunkers around town since they're never going more than a few miles. If they need to travel a few hours, they just rent a car.