Used car loan

[carbon]

I am currently trying to get a used car loan, wanted to get some insight on my chances of getting approved, or what I need to do to make it happen.

Current credit score is right around 650, utilization and credit history length are cited are negatives. My utilization is reading high becuase I have a few high balances hanging out on 0% cards that I was paying down before the end of the 0% period. Knowing that I was going to be car shopping soon, I went ahead and paid those completely last week. My current utilization rate is below 20%. Obviously, this has not been reflected on my credit report yet, but I didn't think I would have found a car to buy so quickly. I have 5 years of credit history, including several cards, store cards, and 2 previous auto loans. There has never been a late payment, and there are no negative marks.

Also, my wife and I just purchased her a new car 2 months ago. This probably isn't going to look very good either when applying for another car loan so soon.

I'm looking to borrow $35,000. My monthly gross is $7000. My wife does not work at this time, and her new car loan is her first credit. Rent is ~$1200/mo, her car payment is ~$300/mo, student loan payment is $200/mo, and other payments are ~$150/mo. 

What do I need to do to get approved? Will waiting until my credit report updates and shows <20% utilization, rather than >60%, be enough? 

[Revelate]

From what you posted, if your utilization is currently at 60% you're probably easily north of 700 on your auto-enhanced at 20%.  It's always better to wait if you're going to take a big revolving utilization swing.

That said, borrowing 35K for a used car, is a lot of used car.  I think you're going to have to bring cash to the table to get it done, what's the rough cost of the car total?  I'm assuming in this case it's only 2-3 years old at most?

[carbon]

The car is $38,000, it is a 2010 model year.

[Revelate]

It's possible, I was thinking around 10% down at a minimum, but it depends who you go through.  If you're going through a branded dealer, they can almost certainly find you financing.

[carbon]

That's the problem - it's a private party deal. Any recommendations for who to apply with?

[Revelate]

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@carbon wrote:

That's the problem - it's a private party deal. Any recommendations for who to apply with?

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I don't know, private party deals are harder to get financed, especially at higher dollar values... some folks may be able to offer suggestions, probably credit unions.  Out of curiosity, how much of a discount are you getting for this vehicle vs. simply buying it from a dealership?

[carbon]

It's a car that has been extensively modified, not something you would find at a dealer. The $38,000 price tag is still a few thousand under NADA and KBB value, though.

[Anonymous]

Some banks will finance 110% of NADA retail (KBB values carry no weight with any bank I'm aware of,  their values also tend to be high for retail and low for trade-in value. KBB is the dealers best friend),  a few banks will do up to 125% of retail, depending on who's trying to borrow the money. You will get no extra loan value credit on the modifications from any bank that I'm aware of..... Modifications scare some banks, they would rather see factory options only. You may want to approach two or three of your local dealer's and see if they would be interested in helping you finance the car with one of their lending sources. First thing most banks are going to ask for is your wife's information when they see that joint account for her car loan and the rest of your debt load. You're debt to income is getting pretty high, most banks would rather see you buy less car. With a franchise dealer's help, I'd give you 50-60% chance of approval and getting all the money and the months you need to finance it. Without a franchise dealer's help, 25% chance or less of a loan approval, depending on how many banks you went to about the loan. Dealer's have 10-15 lending sources, at the very least they will know 2-3 lenders that would be potentially interested in doing your loan. They're going to make some money on you by getting a lower rate from the bank than what they will charge you, and pocketing the difference. So go to two dealers. Let them each give you a quote, if you got a better quote from one tell the other about it. Play the game. Good luck.