• We’re currently investigating an issue related to the forum theme and styling that is impacting page layout and visual formatting. The problem has been identified, and we are actively working on a resolution. There is no impact to user data or functionality, this is strictly a front-end display issue. We’ll post an update once the fix has been deployed. Thanks for your patience while we get this sorted.

Financing a vehicle...

Raduque

Raduque

Lifer
I have bad credit, but I also have no bills. I plan on going in with $3000 to put down, but I'm pretty sure with my credit I don't have much bargaining room save for the fact that I don't actually NEED a new vehicle, I just want one. I can walk out at any time if I don't like the numbers they're giving me.

How badly are they going to try and screw me?
 
and what car are you planning on buying? Are you part of a credit union? Usually you can get a really nice low rate with them without having to worry about financing through the dealer.
 
Get your financing ahead of time through your bank. You'll know exactly how much money you will be getting, what your payment will be, etc and won't have to deal with the stealership financing team. This way when you go to the dealer, you can negotiate as if you have cash.
 
Back it up. So you have bad credit and don't even need a car but you are still looking to finance one? That is a terrible financial decision, but then terrible financial decisions are why you have bad credit after all.

You could easily be double digits on interest rate. If borrowing $15k and paying $150/month in interest sounds good to you, go for it!
 
My credit is under 600, but it'll be better next year (when I'm actually going to start shopping).

The vehicle I'm looking at is the 2004-2008 F-150. I hope to spend around 14k including vehicle and interest charges. I'm not a member of a credit union, but I want to switch to Navy/Army FCU.

Stageleft, I understand it's a bad financial decision, but that's not why I have bad credit. I simply have never done anything that would actually GO ON my credit report. I get denied for cards (except for garbage like Orchard Bank) because I have "insufficient age or number of tradelines" or something like that.

And no, I don't NEED a new car, I WANT one. I realize it's the wrong way of thinking, but I'm tired of puttering around in my sister's 12yo underpowered Altima (she doesn't drive so by default the car fell to me - but it's not mine). It's just not for me, and I don't feel comfortable in it.
 
Well, you have $3,000 now, start making the car payment every month (say $375) to yourself. Next year when you're ready to buy you will have $7,500. If after a year you decide making the car payment sucks you can spend the cash on a nice used truck. If you don't mind the payment you'll only have to finance 1/2 of your purchase price (assuming $14-15k like you said).

Good luck.
 
You need to pump up your credit score, get a low balance credit card and use it for gas, or food, something you can pay off every month, then pay it off every month. 😉

In a year or so, not only will you have more time to get a down payment together, but you will be in better shape to get a decent loan.
 
Vic Vega said:
Well, you have $3,000 now, start making the car payment every month (say $375) to yourself. Next year when you're ready to buy you will have $7,500. If after a year you decide making the car payment sucks you can spend the cash on a nice used truck. If you don't mind the payment you'll only have to finance 1/2 of your purchase price (assuming $14-15k like you said).

Good luck.
Click to expand...

This is sage advice.
 
I don't have the $3000 yet. I'm going to start saving after the holidays (christmas, birthdays, etc =\ ), about $500/mo, not including my tax return, which will also go to this. That's why I'm waiting till next year - to save the down payment and let my credit score go up a little bit more.

ayabe said:
You need to pump up your credit score, get a low balance credit card and use it for gas, or food, something you can pay off every month, then pay it off every month. 😉

In a year or so, not only will you have more time to get a down payment together, but you will be in better shape to get a decent loan.
Click to expand...

Sounds good - but where am I going to get an unsecured card with an under 600 score?
 
Last edited:
Raduque said:
I don't have the $3000 yet. I'm going to start saving after the holidays (christmas, birthdays, etc =\ ), about $500/mo, not including my tax return, which will also go to this. That's why I'm waiting till next year - to save the down payment and let my credit score go up a little bit more.



Sounds good - but where am I going to get an unsecured card with an under 600 score?
Click to expand...

I seen to be confused as to whether you have bad credit or insufficient credit. If you have outstanding debt or bad debt that you just recently paid off then you probably won't get approved for even a 10K car loan, not without paying mafia level interest rates.

You might consider buying a car outright for $3000 or less, that will help your credit, you will have something in your name. You could almost certainly find something you like more than the Altima. Then you can work towards getting your dream truck or car, whatever.
 
ayabe said:
I seen to be confused as to whether you have bad credit or insufficient credit. If you have outstanding debt or bad debt that you just recently paid off then you probably won't get approved for even a 10K car loan, not without paying mafia level interest rates.
Click to expand...

I had a 10 year old charged-off credit card removed from my reports last year. Because of that, I basically have no credit history now (only one positive is a paid-off TV I financed through Aarons). When I applied for a credit card last year, the rejection letter I got said something about having an insufficient history or no revolving tradelines or something relating to the fact that there's nothing worth mentioning on my credit reports. I do not currently have any sort of debt at all on my credit reports. It's just a really low score, which is why I said "bad credit". I should've been clearer on that.
 
If you can somehow figure out how to get a card, be it through union or a secured card or whatever and you have no bad issues on your credit then you could get 700+ quite soon indeed.
 
Get into the credit union ASAP (Wouldn't you also be eligible for USAA?) and move your checking and savings there. Talk with them about getting a credit card with a low limit, preferably with a limit lower than the balance in your savings and checking. They should be able to do SOMETHING to sort this out. The sooner you do this the better, because it will be on your credit history longer.
 
ayabe said:
You might consider buying a car outright for $3000 or less, that will help your credit, you will have something in your name.
Click to expand...

"Having something in your name" means jack to your credit score. The credit score is solely concerned with: how many loans do you have, for how long, for how much money, and how good have you been at paying them back? You could have $10 million in the bank and have a crappy or non-existent credit score. Your assets are not considered by any credit score. They will be considered by the bank when you apply for a loan, but your income and assets are a separate part of the application.

OP, if you're sure that the old charged-off CC is gone from your credit (it should be after 7 years) then there's no reason for your score to be so low that you can't get some credit. The first place to try is with a secured credit card through your bank. You will put $500 down, and that $500 will be your credit limit. It is basically a credit card with a deposit. Once you have 6 months of that (and you need to use it, but only a bit -- if you have a $500 limit, charge $50-$100 a month to the card, and pay it off every month) then your score should be at least high enough to get some sort of car loan.

Credit is dangerous and I will say that you should only get a credit card if you are capable of paying it off every month, and that you do so. You should only use it towards certain ends -- and buying stuff is not the proper end. The only good uses of credit cards are 1) to game your credit score higher (which can help with big things like mortgages), and 2) to get rewards that are worth more than the costs of the card (and if you don't pay in full, even just for one month, this is pretty much impossible). If you're not doing either of those, then you have credit cards for the wrong reasons and you should cut them up immediately.
 
slashbinslashbash said:
"Having something in your name" means jack to your credit score. The credit score is solely concerned with: how many loans do you have, for how long, for how much money, and how good have you been at paying them back? You could have $10 million in the bank and have a crappy or non-existent credit score. Your assets are not considered by any credit score. They will be considered by the bank when you apply for a loan, but your income and assets are a separate part of the application
Click to expand...

OP has no assets and cannot get a credit card. A titled vehicle would go a long ways towards fixing that, he would be swimming in offers compared to what his options are now. A bank will consider this when offering a card.
 
How to build excellent credit.
Back in the early 90's I had to have a bankruptcy due to excessive medical bills.
I got a secured credit card once my bankruptcy was absolved(7 years later).
A secured credit card is one you put money into to make your limit. I started with $250. After paying that off in full every month for about 6 months, a "legit" credit card company offered me an unsecured card with a $250 limit. I paid that off in full every month & about 6 months later they bumped my limit up to $500. I kept getting increases in my credit line, about every 6 months because I was paying the card off in full every month. Now, I was only charging what I could afford($300-400 per month).
Now I have a credit rating of 817 because I only charged what I could pay off & made sure to pay it in full & always on time.
Also, did you know that ANY late payment goes on your credit report, ie: from a phone bill, light bill, anything that is made in a payment form. ALWAYS pay on time!
When I bought my first car 8 years ago(2002 Chevy Cavalier) I was given a 14.9% finance rate because I had little or no credit. When I bought my new car 3 weeks ago(2010 Nissan Xterra), I got 0% & was able to negotiate $5000 off the sticker price.
FYI, getting both 0% & large amounts of cash off together is almost unheard of.

Don't go to a car lot & waste their time. It is real prickish & you will probably get talked into something you can't really afford.
NEVER tell a dealer "what you can afford to pay per month". They can make your payment whatever you need, but you will pay far more than the car is worth.
Also, fyi, when you put cash down on a car, it comes to approx. $16.50 off per $1000 down.

Get a pre-approved loan from a bank if you can. It will be better than from a car dealer.
 
Last edited:
ayabe said:
OP has no assets and cannot get a credit card. A titled vehicle would go a long ways towards fixing that, he would be swimming in offers compared to what his options are now. A bank will consider this when offering a card.
Click to expand...

Look at your latest credit report from one of the 3 bureaus. Does it show any deposit accounts (savings or checking accounts)? Does it list the value of real estate or vehicles that you own? Does it even list your income?

Assets have NOTHING to do with credit a credit report or a credit score. Period! And those unsolicited junk mail offers for credit cards come from companies pulling credit scores. And most credit card companies only care about 2 things when it comes to deciding whether to give you a loan: your credit score, and your income. Take a look at a credit application. You give your SSN (so they can check your credit) and you give your annual household income (which, AFAIK, they have no real way of verifying -- your income is a matter between you, your employer, and the IRS). I don't recall seeing slots to list cars or other assets on any credit card application that I've ever filled out.

Of course, having any kind of assets will look better to a bank than having no assets -- if the bank is doing full underwriting (which I've never seen for credit cards). But $3000 in savings is just as good, or better than, a $3000 car titled in your name.

A secured credit card is the way to go. OP, save up $500, and no matter your credit score, you WILL find a bank that will give you a secured card. Also, if possible, put your name on any monthly bills that you pay. Electric, gas, water, phone bills -- they all submit payment info to the credit bureaus, and they will all help your credit score.
 
Apply for a store CC like sears, JC Penney, etc... and use it a couple times and pay off the balance in full. That will shpw up on your credit report as paid in full and current with not late payments.

When I was young I got a JC Penney card and used it like that. I then got one from Citibank as my first real card and the JC-P card is what got me enough credit to get that one. I closed the JC-P card after I got the citi.
 
Thanks guys, there's some good advice here. I'm going to see if N/AFCU offers a secured card (I know USAA doesn't) and open an account with them if so. (For the record, I had USAA - I canceled my account some time after I lost my last job because of the way my parents were using it, I knew it would bite me if I didn't stop them and words alone...)


Marlin, are you talking about a store-branded Vista/Mastercard, or a store charge-account card?

Edit: I just checked my score at Creditkarma - I don't know who they pull the score from, but it's a 545, up from a 521 at the beginning of the year.
 
Last edited:
Department store cards like Sears, Macy's, JCPenny, Dillards. It is only good for the store you got it through. They are a BAD IDEA > just get a secured card. $250 is enough to get one.
 
Raduque said:
Thanks guys, there's some good advice here. I'm going to see if N/AFCU offers a secured card (I know USAA doesn't) and open an account with them if so. (For the record, I had USAA - I canceled my account some time after I lost my last job because of the way my parents were using it, I knew it would bite me if I didn't stop them and words alone...)


Marlin, are you talking about a store-branded Vista/Mastercard, or a store charge-account card?

Edit: I just checked my score at Creditkarma - I don't know who they pull the score from, but it's a 545, up from a 521 at the beginning of the year.
Click to expand...


The JC-P card I got was just that store. It does show up on your Credit Report like any othercard, but you can only buy from them. Also the intrest rate is very high so that is why I said to pay in full.
 
Join a Credit Union first thing.
I'd skip the store cards. Talk to a CU about building credit, and getting a card there.
My CU has better car loan rates than anyone in town right now.

If you work all week (2x 12 hr days), go ahead and get a truck for yourself. Just be smart...which you seem to have covered.

I have a 2005 FX4 that I love!
 
You must log in or register to reply here.

TRENDING THREADS

Back
Top