Recommendations welcome

Jesse3581 · ‎02-05-2015

Looking for advice.

A year ago I couldn't generate a credit score. After getting a credit card, my score was 570. I have been extraordinarilly diligent about this. I have kept it under 10% utilization, I have paid for deletes and disputed where nessesary. My last collection has just been disputed off about a week ago (all were paid in full). I also applied for and recieved a Chase Freedom card but it hasn't come yet. Last months scores were 620-640 according to MyFico. I am eagerly anticipating this months scores now that the last collection is gone.

The other day my beater started acting up. I took it in and they said $2000 transmission repairs and it's not worth fixing. I took this as a positive sign that I should go car shopping. There is a car I have loved since I was a teenager. the BMW Z3. It was in production from 1997-2002. They then released the Z4 which I do not like as much. Being financially sound with better credit and some money in the bank, I went to my credit union to apply for a car loan.

She told me that they don't like financing cars over 10 years old and that with my score the interest rate would be 15.99%. I looked at her screen and saw that it was still showing the collections (although paid, so she didn't seemed concerned) and said I had too few accounts. I told her I was waiting for the Freedom in the mail, but she had a score and a chart and that's that.

Looking at her chart it showed that even if I had an 800 score, I would be paying 9.99% on a loan for a car over 10 years.

So that's where I'm at. Kinda need a car (still driving the beater with the bad transmission), but I don't want to strap myself to a car I don't love and be paying that off for 5 years. Part of me thinks I should bite the bullet and pay off the car loan ahead of schedule but still, we're talking about $1200 in interest. Another part of me wants to see my scores update, the Chase Freedom report and walk into the credit union with the updated scores. Or do I move on, destined to not own a BMW Z3 for another few years?

$1750

$5200

$2000

$7500

$2000

sccredit · ‎02-05-2015

If you are looking to buy a Z3 pay cash, don't finance something over 10 years old. Most credit unions want the car paif off by the time it is 10-12 years old

SamsungHDTV · ‎02-05-2015

I need some clarification, so correct me if I don't have your situation right.

The loan officer said they don't like financing cars over 10 years old, your Z3 would be at least 13 years old. She didn't mean the loan term would be 10 years. Majority of lenders do 72 months, some do 84 months. You can choose your term, say 48 months. It really matters on what you want your payments to look like. Paying off loans are always a good thing.

I was in a similar situation in 2013. I had totaled my car, needed a new one. Insurance payout was higher than I expected, so I figured I could get almost what I wanted. I've always wanted a 2005 Acura TL. I loved the look of the car, its shape from front to back. The insurance check was short maybe 2-3K, not bad. But for whatever reason, I decided let go the one I found online. I didn't want to hassle with the repairs of an older car. I'm not handy with cars, so I didn't want to keep repairing anything that came up. So I ended up with a new 2013 (at the time) honda accord. I've outgrown the dream car I wanted when I was younger, and I'm happy with what I have now. No regrets.

After you get your car situation fixed, I would recommend getting another card. You might even ask the credit union to see if they can use that same inq to consider you for a credit card. My credit union did this in 2013. One inq, for both my auto loan and credit card they approved me for. Just beware some say they will use the same inq, but do separate.

Jesse3581 · ‎02-05-2015

You're right, it would not be a 10 year loan, probably 2-4 years.

I know I have my heart set on this older car. Maybe it's time to move on though. It's hard.

$1750

$5200

$2000

$7500

$2000

Anonymous · ‎02-05-2015

@SamsungHDTV wrote:

I was in a similar situation in 2013. I had totaled my car, needed a new one. Insurance payout was higher than I expected, so I figured I could get almost what I wanted. I've always wanted a 2005 Acura TL. I loved the look of the car, its shape from front to back. The insurance check was short maybe 2-3K, not bad. But for whatever reason, I decided let go the one I found online. I didn't want to hassle with the repairs of an older car. I'm not handy with cars, so I didn't want to keep repairing anything that came up. So I ended up with a new 2013 (at the time) honda accord. I've outgrown the dream car I wanted when I was younger, and I'm happy with what I have now. No regrets.

Back when I had a good job I lesaed a brand new 2005 TL. It was the best car I've ever owned. The new ones are out of my price range. Heck even one a few years old is out of range now.