Auto Loan beginner question

[Anonymous]

Hi all,

As noted on the credit card forum i'm not only a newb here, but pretty much to credit in the USA.

I got my first CC in June of last year. My score is up to around 715 at last check, I don't have a lot of out standing credit (one store card $150, Cap1 $500 and AmEx Gold card).

Point of this is; Just out of curiosity - what stage do i have to get to generally speaking to actually qualify for a good auto loan? - Am i looking at a two year history needed first? more credit needed from other lenders? I'm very much learning!

[renaboo01]

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Ankh7 wrote:
Hi all,

As noted on the credit card forum i'm not only a newb here, but pretty much to credit in the USA.

I got my first CC in June of last year. My score is up to around 715 at last check, I don't have a lot of out standing credit (one store card $150, Cap1 $500 and AmEx Gold card).

Point of this is; Just out of curiosity - what stage do i have to get to generally speaking to actually qualify for a good auto loan? - Am i looking at a two year history needed first? more credit needed from other lenders? I'm very much learning!

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Hey AnKh7! Welcome to the forums. You really don't need two years of history, but if you have not had a car loan before your interest rate could be really high. I got my first loan 4 years ago when I was 19 and my rate was pretty high. Due only to not have an installment loan before. But a CU may be ideal for you. They have lower interest rates then banks do. I hopes this helps.

Rena

[Anonymous]

If you are buying new from a dealership DO NOT accept a higher interest rate than 5.99%!

If buying used from a dealership DO NOT accept a higher interest rate than 7.5% !

Play dumb if they say you don't have enough credit history. Just focus on your 715 Credit Score.

The dealerships will do just about anything to get you to buy their car. So if you go in there educated on the car, your credit etc. and stand your ground you WILL get what you want.

That is my advise. I finally bought a car this year where I didn't get screwed (for lack of a better word....) It took me 3 times to get it right.

[koz08]

Ankh7 - I received my first car loan when I was 19.  I bought a "used" car with 6k miles on it, had no credit history and took a dealer loan at 17%.  What I wouldn't do to go back to that day now...

Anyway, if you can afford it, buy a one or two year old car as the depreciation incurred will make it a bit cheaper than new models.  The only issue is used cars do carry higher interest rates on the loans, but I agree with the above post that paying more then 7.5% would be unfair to you.

The other option is just to buy a new car.  The '08 models will be coming up to their "sale" period, when traditionally dealers are trying to get rid of their inventory and offer some great incentives.  Also, in this current economy, dealerships are having a very difficult time selling auto's (think gas prices), so auto's are moving very slowly.  Dealerships will be very motivated to move a new car off the lot, and it is quite possible that you may see deals near 0% financing over 4 years.  Nothing wrong with no-interest loans if you can find them.  If not, many deals out there will offer between 2.9% to 5.9% over four or five years. Still an excellent deal if you find them. 

Good luck car hunting!