Will I Qualify?

[Anonymous]

Hello all!

I am looking to obtain a auto loan and I was wondering if I would qualify. Here are the particulars:

-Total Price- $50,000

-Downpayment: $30,000

-Loan amount- $20,000

My TU is 756, and my Equifax is 766. This is going to be my first auto loan, so I think my current auto-enhanced score is terrible.

However, what concerns me is that my credit history is only 4 years, 6 months old. I am 24, so the maximum credit length I can have is 6 years, but I opened my first credit card when I was 20.

Do you think that this length will spook the lenders? I can pay off the vehicle with cash, but I want to have an auto loan in my credit report, as it is beneficial (from what I've heard).

EDIT: My AAoA is 3 years. My monthly income is $5,400. I will not have a cosigner. My credit utilitzation is 8%.

[MarineVietVet]

IMO I don't think you'll have any trouble qualifying but the interest rate is an unknown of course until you start shopping around. I hope you find a good rate.

From a BK years ago to:
EX - 9/09 pulled by lender 802
EQ - 7/06-663, 3/10-800
TU - 8/10-772
You can do the same thing with hard work

[Anonymous]

Thanks for the response!

So in your opinion- the short length, combined with no previous auto loan history would be offset by my other credentials? I will start shopping for rates next month onwards- but I'd hate to get completely rejected. If there is a good chance I would get rejected, I'd rather wait a while.

Also, would you be knowing what the auto enhanced score would be for someone with no auto loan history?

Once again, thanks a bunch for the reply!

[MarineVietVet]

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@Anonymous wrote:

Thanks for the response!

So in your opinion- the short length, combined with no previous auto loan history would be offset by my other credentials? I will start shopping for rates next month onwards- but I'd hate to get completely rejected. If there is a good chance I would get rejected, I'd rather wait a while.

Also, would you be knowing what the auto enhanced score would be for someone with no auto loan history?

Once again, thanks a bunch for the reply!

---

A lender will look at other things also such as income, job history, etc. As far as what you listed in your credit reports it looks pretty good to me but only a LO can tell you for sure. Here is a thread about Auto Enhanced Scoring that might answer some of your questions.

From a BK years ago to:
EX - 9/09 pulled by lender 802
EQ - 7/06-663, 3/10-800
TU - 8/10-772
You can do the same thing with hard work

[Anonymous]

I don't see nothing keeping you from getting denied. Great income: Check 20% down payment: Check Established History: Check Under 9% credit usage: Check My only advice would be to apply at a few local Credit unions as they may have the best rates. If you want to save even more money on your purchase, send me a PM.

[Anonymous]

I think its very unwise to buy such an expensive car for your age... you should look for something cheaper and once you have your credit built up for 10 years you can then go buy a 50k car. I used to have a 12k used honda when I was 24..... get your priorities straight or else your gonna be drowning in debt soon.

[Anonymous]

I think it is very smart to get a car loan on your credit file.  (Why did you wait until you were 24?)  That said, I think pouring $30k cash into a depreciating asset is reckless for someone at your age.  I certainly hope you already own a home, if not, that money needs to go towards that instead.

I'd shoot for a $25k car and put about $5k down. That is much more reasonable.  Get a 2-3 year old model of the car you want, it should be available for around $25k as most cars depreciate about 50% after 3 years.

[Anonymous]

I appreciate the advice you folks have given me- it's all true. I purchased my current car with cash I earned from my first job- it was barely $6,000. The car is now in its last legs, and I've been saving for a new vehicle for quite a while. Thanks to several lucky breaks in my investment portfolios, I have been able to hit my mark of $50,000 for the vehicle. I have another portfolio for saving up for a house as well (which has a substantial amount), but my job requires me to travel very frequently, so I am holding off on purchasing a house until I get settled.

Until I was 21, my thinking was that I should always try to avoid taking on debt- no matter how small. If I didn't have the money upfront, I shouldn't buy it. So, I didn't get credit cards, or take any loans. However, after reading up, I realize that taking on debt but paying off on time is what really helps the credit history. Not taking any debt hurts the credit file. Please correct me if I am wrong!

I do realize that it is ridiculously too much money for a car, but it's something I wanted for a while- my conscience allows me to be reckless this one time-- I'm blaming it on my young age.. hey most of us are stupid when we are in our early 20s!

Thanks again!

[MarineVietVet]

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@Anonymous wrote:

I appreciate the advice you folks have given me- it's all true. I purchased my current car with cash I earned from my first job- it was barely $6,000. The car is now in its last legs, and I've been saving for a new vehicle for quite a while. Thanks to several lucky breaks in my investment portfolios, I have been able to hit my mark of $50,000 for the vehicle. I have another portfolio for saving up for a house as well (which has a substantial amount), but my job requires me to travel very frequently, so I am holding off on purchasing a house until I get settled.

Until I was 21, my thinking was that I should always try to avoid taking on debt- no matter how small. If I didn't have the money upfront, I shouldn't buy it. So, I didn't get credit cards, or take any loans. However, after reading up, I realize that taking on debt but paying off on time is what really helps the credit history. Not taking any debt hurts the credit file. Please correct me if I am wrong!

I do realize that it is ridiculously too much money for a car, but it's something I wanted for a while- my conscience allows me to be reckless this one time-- I'm blaming it on my young age.. hey most of us are stupid when we are in our early 20s!

Thanks again!

---

I'm much older than you and I still do stupid things. 

That doesn't mean I endorse your decision. But you have to make that choice.

From a BK years ago to:
EX - 9/09 pulled by lender 802
EQ - 7/06-663, 3/10-800
TU - 8/10-772
You can do the same thing with hard work

[monkeywre]

OP you will definately qualify, but you said you have the cash to buy car why would you want to borrow on it? Lets face it, a 50k car is a pure luxury item no one NEEDS a car that expensive, that said if you earned the 50k and want to buy one you've earned it but don't get conned into thinking of this as an investment. As it has been mentioned earlier spending that much on a depreciating asset is a bad idea but borrowing on one makes it even worse. With your scores you should be able to get the best rates on any type of credit you apply for, don't buy into the scam that you have to borrow constantly to be successful, having no car payment is one of the best feelings in the world. As another poster said if you don't own a home yet you should definately get on that rates are fantastic, and homes can be practically stolen in this market, based on the info you have posted you should have no trouble qualifying. If you really want a new car might I suggest you take the 20k you have saved and buy yourself a cheaper new car, or buy that 50k model you want 2-3 years old and let the other poor sap pay for all that depreciation. Best of luck to you in whatever you choose