Son first time auto buyer

MYRLORA · ‎05-24-2017

My Son is 19 and he's looking for his first vehicle purchase. He would like to finance a used vehicle however he doesn't know yet if the vehicle he finds will be from a dealer or a individual. Where can he apply for just and auto loan in general? Most places ask if it is either dealer or individual, but that's the part that he doesn't know. He would like to know how much he qualifies for first so that he can star his search. He's been working for almost a year now and he has two credit cards, both of them in good standing and his FICO is over 750 on all three. He's not looking for much; $5-7k 36 or 48 month loan.

Thansk ahead for your help.

Raul

Anonymous · ‎05-24-2017

I would suggest getting pre-approved through Capital One Navigator:

https://www.capitalone.com/cars/prequalify?PFFSRCID=S-GG-1234567890K-SEM-0001&external_id=COAF_V1_SE...

It is a SP so it should not affect his credit. This pre-approval could give him an idea about what he may be approved for and the APR that could be extended.

I also suggest your son become a member of a good credit union if he is not already one. Credit unions are hard to beat for car loans and if you go through a local CU (or a large, natiional one with a branch nearby) you can apply, walk in and get the check to take to the dealer/individual.

MYRLORA · ‎05-25-2017

@Anonymous wrote:
I would suggest getting pre-approved through Capital One Navigator:

https://www.capitalone.com/cars/prequalify?PFFSRCID=S-GG-1234567890K-SEM-0001&external_id=COAF_V1_SE...

It is a SP so it should not affect his credit. This pre-approval could give him an idea about what he may be approved for and the APR that could be extended.

I also suggest your son become a member of a good credit union if he is not already one. Credit unions are hard to beat for car loans and if you go through a local CU (or a large, natiional one with a branch nearby) you can apply, walk in and get the check to take to the dealer/individual.

Thanks! I did the Cap One Nav and got pre-approved but I had to co-sign, which I really didn't wanted to. As far as CU; I called Space Coast and was told he will require a co-signer as well due to him not being at one particular employer for a year or more.

StartingOver10 · ‎05-25-2017

@MYRLORA wrote:
My Son is 19 and he's looking for his first vehicle purchase. He would like to finance a used vehicle however he doesn't know yet if the vehicle he finds will be from a dealer or a individual. Where can he apply for just and auto loan in general? Most places ask if it is either dealer or individual, but that's the part that he doesn't know. He would like to know how much he qualifies for first so that he can star his search. He's been working for almost a year now and he has two credit cards, both of them in good standing and his FICO is over 750 on all three. He's not looking for much; $5-7k 36 or 48 month loan.

Thansk ahead for your help.
Raul

Just some points of info for you:

Since he is a first time vehicle buyer - his file will undergo a little more scrutiny. Read in the stickies above this auto forum and you will see information relating to first time buyers
Income and work history are very important for first time buyers from a stability POV
Believe it or not, one of his issues from a lender POV is the fact that he only wants $5-$7k loan. A lot of the lenders have loan minimums.

I have to ask this: why doesn't he have the $5k to $7k saved up? If he has been working and has no expenses, he ought to have savings. If he doesn't have savings, it will be a struggle for him to make a car payment + the insurance payment each month. This would be a red flag to any lender if someone comes in new to the workforce with few expenses and no savings. You might want to sit down with your son and teach him about having a budget. JMO

Anonymous · ‎05-25-2017

I have to ask this: why doesn't he have the $5k to $7k saved up? If he has been working and has no expenses, he ought to have savings.

When I was 19, I made minimum wage, had to pay for gas, rent to live at home, clothing, food, etc. There was no way I could have had $5-7k just sitting around. I was jumping for joy when my savings hit $600.

Anonymous · ‎05-26-2017

I think it would be good to go through a CU if you found one that was willing to help him out and work with him but it seems that most of the time when you really shoot for a traditional car loan at that age you are going to end up needing a co-signer.

I had a vehicle loan through Cap1 back in 06' and they were good to me. Always willing to help me out when I had a few months where I was having issues making the payment. If you treat them right, then they will do the same back.

Good luck on finding a vehicle!

MYRLORA · ‎05-31-2017

Thanks everyone for the comments. I did the CapOne Navigator for him and got pre-approved. I also contacted a few CU as recomended here. However; after speaking with my auto insurance company, believe it or not, he's much better off with a new vehicle than a used one so we have decided to go with a leased new vehicle. As far as his savings, he does have over $3k but I don't believe in putting money down on a vehicle, especially a leased one with GAP. They key for us was that the insurance company has their own vehicle rating system and we were able to pin point which make and model works out better for him. There was almost $85 monthly difference between a used vehicle of the same make and model and a brand new leased one...that is a substantial amount per month.

Anonymous · ‎05-31-2017

Be aware that as a first time car owner, he has to be VERY aware of the horror stories of what happens to folks at the end of their lease who have too many miles, or scratches on the paint job, or a messy interior with stains. He has to know that he's giving the car back at a certain time in a VERY specific condition or he's going to get punched with a lot of fees.

If he's responsible overall, this may not be a big deal. If he's not a neat freak, I've seen some pretty severe pummeling on fees turning in the leased vehicle at the end.

Anonymous · ‎06-03-2017

My 20 yr old daughter just got her first car loan from Navy Federal. She has a very thin file, only one credit in her name for less than a year, although we added her to a couple of ours as AU. She works at Walgreens ~30 hours a week and her 3 FICO scores are in the low 700s. But she was immediately approved for $15k at 3.74% and she was thrilled.