Options for Auto Loan

[Anonymous]

Steeler is right - be really careful with the "refi after 6 months" idea, because it may not turn out like you hope.  My brother did the exact same thing - credit wasn't great, needed a decent car, and accepted the 18% interest rate with good intentions to refi.  When the time came (6-8 months later) to refi, nobody would touch it because he was so far underwater.  He was stuck with the car and miserable about it.  

On the flip side, renting a car is a good idea - I do that myself.  I have an '09 Kia Sportage with about 100K miles on it that I drive to work and around town.  My commute is maybe 15 min each way, so no worries (and I have AAA).  I rent a car for longer weekend trips and vacations.  I have a membership card for Enterprise, and they are really good about coupons and earning free days.  If you are renting a car 10 times a year, you will definitely rack up the membership points and start earning free days, so something to consider.  

[Anonymous]

I understand what people are saying about the 20%.  I did check into the car rental.  It would need to be 2 days, and it's about 1,000 miles.  So about $50 per trip or $100 per month.  Although better fuel mileage, it doesn't solve the problems with the Durango which is what I would be driving, or the cost of another vehicle.  So either of those are $1,000 options vs $500 down which is one factor I am looking at.

Every Sub $1k vehicle I have purchased has needed work before I would consider it dependable.  This has nothing to do with appearances, it has to do with properly maintaining a vehicle, and in many cases catching up maintenance.  I realize even just throwing away $1,000 may be less than the interest, but it doesn't changed peace of mind when driving.  Just the knowledge that you know you will get from Point A to Point B without breaking down or being stuck on the road is worth a lot to me.  

As for the refinancing I am good about buying cars.  It may be something I like, but if it's overpriced I will walk away and I usually walk away if it's at retail.  One of the reasons I appreciate a Subaru in this instance is that they don't depreciate heavy so it would likely be February before I saw any real depreciation, which is about the time I would be looking to refinance since my student loans would be rehabbed and I would have a tax return coming to pay it down during the refinance, regardless of where the value is for the refinance, and lower the payments even further.  

I will state I'm leary of even taking on a car payment, but after over 10 years of having problem cars I'm over it.  I don't want to spend anymore on a problem vehicle.  All they do is create problems for me.  I do want to keep my Durango, but as a toy, not something I need to rely on (although it has never left me on the side of the road, but it's getting close).  

I won't know much more until Saturday as that is when I expect my two CC to update and then I want to switch to the monthly on MyFico so I can pull my current auto scores before I do this.

[Anonymous]

Just to update this.  My Fico Auto Enhanced scores came in at 626 (equifax), 599 (transunion), and 621 (experian).  

I was offered 16% on a 15k car with $500 down over 72 months, but it wasn't the car I wanted.  The car I wanted they actually had trouble getting me financing on and I stopped for a reason.

My Durango went down while I was looking at cars, I lost the PCM (computer).  I have a new one on the way and will replace it (I typically do a lot of my own work).  Many of the issues that had me questioning it may be resolved meaning I can wait, and waiting is my best optoin.

MyFico says I should be sitting around 12% right now, but I was offered anywhere from 16% to 20% and most of that on cars that weren't what I want.  I'm within reach of a 650 credit score if I'm careful and make sure all cards report with a $0 or low balance.  A 650 score could net me an 8% rate on what I do want, but being in the area longer will get me the 10% rate.  And 10% is a lot different than 16% or 20% on a $11,000 to $15,000 car.  And I was told by a local credit union they could probably get me 13%, but at that point I had already kind of decided I would be better off to wait.  

I understand what was being said, but at that time I was honestly expecting my Durango to die in a way I couldn't fix it.  I was looking at walking when I need to have a vehicle regardless, and I need something I can trust.  

I think the Durango dieing like it did showing me what was wrong made my decision for me.  I still want a vehicle, and my credit could really use an auto loan, but right now if I wait I've learned it will be easier to get what I want, and not what the dealer wants to sell me.

[Anonymous]

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@Anonymous wrote:

Just to update this.  My Fico Auto Enhanced scores came in at 626 (equifax), 599 (transunion), and 621 (experian).  

I was offered 16% on a 15k car with $500 down over 72 months, but it wasn't the car I wanted.  The car I wanted they actually had trouble getting me financing on and I stopped for a reason.

My Durango went down while I was looking at cars, I lost the PCM (computer).  I have a new one on the way and will replace it (I typically do a lot of my own work).  Many of the issues that had me questioning it may be resolved meaning I can wait, and waiting is my best optoin.

MyFico says I should be sitting around 12% right now, but I was offered anywhere from 16% to 20% and most of that on cars that weren't what I want.  I'm within reach of a 650 credit score if I'm careful and make sure all cards report with a $0 or low balance.  A 650 score could net me an 8% rate on what I do want, but being in the area longer will get me the 10% rate.  And 10% is a lot different than 16% or 20% on a $11,000 to $15,000 car.  And I was told by a local credit union they could probably get me 13%, but at that point I had already kind of decided I would be better off to wait.  

I understand what was being said, but at that time I was honestly expecting my Durango to die in a way I couldn't fix it.  I was looking at walking when I need to have a vehicle regardless, and I need something I can trust.  

I think the Durango dieing like it did showing me what was wrong made my decision for me.  I still want a vehicle, and my credit could really use an auto loan, but right now if I wait I've learned it will be easier to get what I want, and not what the dealer wants to sell me.

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and easier to get what you want at a decent rate if Old Faithful hangs on just a little while longer

Glad you're putting some good thought into this. Try not to go 72 months on any loan. It's another recipe for being underwater unless the interest rate is 0% or waaaaay low.