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Car financing for an 18 year old

Deeko

Deeko

Lifer
This January I'm looking to buy a new car, probably a Mazda 6. I don't exactly have 16 grand laying around, would it be possible for me to get financing? I turned 18 in August, and I'm doing my best to build up credit as quickly as possible, I've got 2 credit cards, one I rarely use, the other I've maxed out and promptly paid of 3 times already, and I've got a cell phone bill I pay every month. Are they tough on people with limited credit? Would I get offered different terms?
 
You'll probably have to have someone co-sign the loan with you (so if you don't pay, they'll pay 😉 ). I'd say as long as you have that, you're good to go 🙂
 
My first loan ever in my life was for 4k. My mother cosigned because I was not of contract age.

My second loan wa for $35k without a cosigner at 19. I think it all depends on your crditworthiness.

You will probably need a cosigner.

<edit>
Also, people with less credit usually get higher interest rates. The 35k loan was for 11.9% interest, which I refinanced through my credit union for 6% 6 months down the road.
 
your not going to be able to get a car loan UNLESS you can prove to the bank that you've had a steady job (whether its part time or full time), and that you have a good credit history with a lot of transactions. Plus the fact that your only 18 makes them kind of iffy.

Also, its good to have about a 20% down payment for your new vehicle.
 
Originally posted by: PsychoAndy
I'm gonna go out on a limb here and say that you could get financing if you put 25% down and pay unholy interest rates.

-PAB
Click to expand...

Pretty much, they'll want 1/4-1/3 down, & you'll be paying around 25-29% interest.

When I was 18 I was making $25K a year, & was considering financing. That's exactly what they told me. Plus, I couldn't have financed more than $10K or so. At that point I had been working over a year at one job. Add onto that the wondrous prices you'll receive if you get your own insurance policy, you can expect to pay $350+ a month for comprehensive (which is required when you finance).

Let's say you negotiate a deal for a $15,000 car, with 20% down ($3,000). That's $12,000 financed. Let's say you finance for 48 months.

Monthly payment: $425
Total cost: $23,400

At 25% interest:

Monthly payment: $398
Total cost: $22,104

20%:

Monthly payment: $365
Total cost: $20,520

15%:

Monthly payment: $334
Total cost: $19,032

10%:

Monthly payment: $304
Total cost: $17,592

5%:

Monthly payment: $276
Total cost: $16,248

Suddenly a $15,000 car is a $800 a month commitment. Do you make 4x that in a month?

I know a few people who are paying that kind of rates on their vehicles, & they financed less than you want to. They make around $30K a year, & they regret doing it. They are upside down, and hating it.

IMHO you will too.

Viper GTS
 
like PAB said, if you put tons down they don't even need a credit check to give you an awful rate.
 
You'll never get out of debt...

I'm 18, just turning 19 and I'm going to get financing for a car (co-sign)... but its only going to be for $3-4k.
 
I got a call yesterday from a credit union saying I was preapproved for an autoloan of 22500 dollars at a rate of 12%. I don't have a job so I thought that was interesting. Credit wise, I had a checking account since junior year in high school and I've had about 3k of traffic a month average and a credit card when I turned 18 which I've promptly maxed and payed off four times. Other then that, my current car is under my name and thats pretty much it.

It'll probably be better if you can get your parents in on this. I know my brother took money out of his house and bought a car straight up so that he's essentially paying aboug 4.5% interest. That, and since you have to pay for full insurance on new cars, you'll be paying up the @ss for insurance too. I'd recommend you buy a newer used car. Maybe a 98-2000 model.

<== monkey dance
 
By yourself? Unless you're a millionaire (which you could use that $ to get a secured loan), NO.

Get a co-signer who has good credit, good income and low debt.
 
damn thats high interest lol....I've seen all the commerials for 0% financing I knew I wouldn't get that, but wow, 25......well here's to hoping my parents will cosign.
 
This thread was right below a thread that had the word "craving" in it (*edit* the thread was called "What are you craving right now?"). At first I read this topic as "Craving for an 18 year old" and I thought it was gonna be a post by some dirty old bastardtecher.
 
This thread was right below a thread that had the word "craving" in it. At first I read this topic as "Craving for an 18 year old" and I thought it was gonna be a post by some dirty old bastardtecher.
Click to expand...
hahah thats one of the funniest things I've seen all day.
 
Yes they are tough. Would you loan an 18 year old money for a $20,000+ automobile who has never had that much credit or any proof that they can handle the repayment of such a sizable loan? It will be impossible without a co-signer or a large amount of money down.
 
Well, I wouldn't be getting the full 16K in loans, I'm selling my old Grand Am (about $2500 probably), plus I should have a decent chunk saved up by then....I would say the loan would be about 10K. I'm making decent money, how many 18 year olds do you know that make ~$20/hour? I guess that doesn't make a differnce though, its all about credit history, which I don't have much of, even though I'm workin on it. Ah well....if my parents aren't idiots about it they should cosign. They know I'll pay it, I do make twice as much as my mom.
 
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