What are my options?? Need a car!!

Anonymous · ‎01-23-2012

I lost my car last July due to the engine dying and I didn't think the cost to replace the engine was worth the money. (Repairs were more than car value). When I applied for an auto loan w/my credit union I was denied. I also went to a dealership, which resulted in 4 inquiries and were also denied. My credit score was 664 and is now 651. I have no one to co-sign on my behalf. I owe on 3 of my 4 credit cards. I have never missed nor been late on payments. I just started a 2nd so my income will be $2000/month. I'm trying to figure out should I work on improving my score so i can try for financing this July or use the money I saved to purchase a decent but cheap car. I really need something cheap but reliable, as I commute an hr away for school and I am using my mother's car but she is hinting that she won't for much longer. I don't want to rush and end up w/a lemon! Any suggestions are appreciated.

Anonymous · ‎01-23-2012

What are your current expenses each month for rent, credit card minimums, student loans, etc?

Is the $2,000 before or after taxes?

Anonymous · ‎01-23-2012

Im a college student that lives w/my sis. The rent I pay is n/a since I am not on the lease. I don't owe on my student loans since I am still in school. My credit minimum adds up to $105/month. $2000/month income after taxes.

Revelate · ‎01-23-2012

If you're dead set on financing a car, it's going to depend how much you can put down vs. the amount of the loan.

Out of curiosity, how much of a loan were you looking for on how old a car? What was the reason for the dealers and CU's denials?

In your case I'd consider taking one month's income and just throw it at whatever 2000-2001 honda / toyota I could find with ~150k miles on it private party (just get it inspected first), and try to get a year or two out of it. You can get a loan on your next car when school / income / debit are a little more manageable if you're in a tight spot now.

Anonymous · ‎01-24-2012

I tend to agree that I wouldn't finance a car right now. Your rate is going to be high, and it isn't worth it at this point.

I say this a lot on these boards, but living with a friend/family/whatever that doesn't have a set rent amount (if any), does not help you as a borrower... it hurts you. If they don't know your monthly rent payment, they will assume it is $0, and then will have to consider that any day in the future your monthly expenses could rise significantly as a result of housing costs. If I were you, I wouldn't finance a car right now.

Here's a hypothetical that is extremely common. You make $2k after taxes each month... your CC payments are $100 (not paying them down at all... which isn't good), your car payment is $300, insurance is $100, then you have to find a place to live and it costs you $600-700 a month. Now you are looking at ~$1,300 a month in expenses without anything else considered... gas, utilities, food, entertainment, savings, paying down debt, etc.

Just don't over extend yourself. I would get the CCs paid off before anything, then start working on your student loans and consider an auto-loan when you have a minimum of a 20% down payment, and have a stable living arrangement where you aren't dependant on the whim of someone else.

Anonymous · ‎01-26-2012

I wanted a car for $18,000 and I was gonna put $2000 down. I wanted a 2008 Nissan Altima Coupe. My credit union said that my credit utilization was too high and my employment history was too short. (less than 6 months at the time. They said my score was decent for my age range but recommended a co-signer, which I don't have). I also tried with one of the dealerships I went to and they said the same. Right now I have $4000 that I would like to put towards a car. I figure my mom gives me until Aug to continue using her car and to save more money, I can just buy one with no financing or get the car I want because I would have my credit cards paid off by then, longer length of employment and no more credit utilization issues. I was thinking of trying for a cheap car but so far no luck and I'm cautious about older cars because I'm scared for another car to break down on me. My old car was ten years old. I need something that can survive my commute to school.

Anonymous · ‎01-26-2012

Well right now living somewhere else isn't on the cards. My sis and I are both young and single, so we decided to live to together to save money. I know what I pay in rent isn't counted to a financial institutio offering loans, that's why I said my rent I pay is n/a (not applicable) to me being approved. Fully aware.

I don't really want to finance a car. I just need another car so that I can commute to school. Work is close to my house so that isn't an issue. I really just need the car to last me at least a year or two since I graduate college next year. My student loans are federal so I don't have a balance due until I graduate. As I said to the other contributor, my credit union and the dealership said my credit utilization was too high then (July 2011) and my length of employment too short. They both suggested I get a co-signer, which I do not have. I am paying off the cards. I was just wondering if that would help me if I try to finance a car later this year. I have 20% down as well.

Revelate · ‎01-26-2012

Credit card utilization is one of the most important factors of one's FICO score. Absolutely paying them down may help you qualify for financing if it raises your score sufficiently.

My personal opinion having paid cash for cars all my life till recently, finance something. If you can afford to save up a 20% deposit in around a year, you can afford a loan (assuming stable income). An auto loan reporting as a positive tradeline (no late payments and what not) is another very good item on your credit report.

Anonymous · ‎01-27-2012

@Anonymous wrote:
I don't really want to finance a car. I just need another car so that I can commute to school. Work is close to my house so that isn't an issue. I really just need the car to last me at least a year or two since I graduate college next year.

There's the issue right there. You say yourself that you dont want to finance a car and don't need much of a car... but you also want to purchase an $18k car? Makes absolutely no sense. You could buy a brand new Kia for $8,000 that is under warranty and will get you safely from point A to point B for less than half the cost.

If you are dead set on buying a car, then buy a cheap one.

Anonymous · ‎01-27-2012

@Anonymous wrote:
I wanted a car for $18,000 and I was gonna put $2000 down. I wanted a 2008 Nissan Altima Coupe. My credit union said that my credit utilization was too high and my employment history was too short. (less than 6 months at the time. They said my score was decent for my age range but recommended a co-signer, which I don't have). I also tried with one of the dealerships I went to and they said the same. Right now I have $4000 that I would like to put towards a car. I figure my mom gives me until Aug to continue using her car and to save more money, I can just buy one with no financing or get the car I want because I would have my credit cards paid off by then, longer length of employment and no more credit utilization issues. I was thinking of trying for a cheap car but so far no luck and I'm cautious about older cars because I'm scared for another car to break down on me. My old car was ten years old. I need something that can survive my commute to school.

Your answer is right there in your explanation. You have 4000 right now and say you can save 1000 per month than till Aug the total would be 12000 and I bet if you put that down you would definately get the car you want.

Second option. Id you dont have that much saved than in taht case you can get a decent used car for 5000-6000 that will last you for couple of years. Ans also see if you can get a personal loan or an auto loan for that so that will help you in builing your credit. In case if the interest is sky high than you already have the money sitting in your account and you can pay that up in few months. This will help you little bit (not to great extend) in showing you credit worthiness.