Going to buy a used car.  It's going to be in the $10,000 range.  It is necessary because I currently have a '96 Camaro,. 168k mi's, and I learned this winter I have to have a 4 wheel drive vehicle to get to work.  I HAVE to get to work as an emergency dispatcher, plus this car is due.  I bought it in '00 and have only put 68k mi's on it.  It is very mechanically sound and hasn't missed a service with synthetic oil since I owned it.  The biggest mechanical problem I had was I had to have the alternator changed...if that even counts as "mechanical."  Blue book value is anwhere from $1,200-$2,2200 dollars for trade in.  I probably fall at about $2,000.

Anyway, I've decided on a Jeep Cherokee Laredo 4WD because my family has owned two and they've been rock solid vehicles especially in the snow in ice.

I have very a very limited credit history.  Never had a card with a limit of more than $500 and have no outstanding CC debt.  I make about $30k/year and as a county employee my job is probably more secure than most in the private sector.

I could probably be willing to part with $2,000 in savings.  So this would bring my down payment (including the $2,000 trade-in) to about 40% of the $10,000.  I hopefully can haggle my way down a bit given the car market and car lots wanting to get rid of vehicles due to tax time.  Also I can afford $300-$400 per car payment.


***See question 4*** My father makes 6 figures and has told me he has a credit rating in the upper 700's.  He hasn't had to purchase a vehicle in over 20 years because it has always been paid by the company (must be nice).  He has around $10k of outstanding debt from his other children's student loans and also some debt on his his which will be paid off in 7 years.

So this brings me to the questions...
1.  Do you think I will be able to get a loan alone (looking at 36 month)?  If so what would be a conservative estimated APR?
2.  Would I be able to get a bank loan or will I have to go through the dealer financed options (yes I know dealer financed would have a higher APR).
3.  If I try for a bank loan should I try with the bank I am with or others?
4.  My father would be willing to cosign.  Would this help me get approved?  Would it help the APR?  Would it affect my credit rating (vs. getting a solo loan)?
5.  Any other questions on dealing with this whole process and car salesmen?  Any tricks to watch for?

Ok, I've read enough of this forum to know the first response is probably going to say if you don't have the cash, you can't afford it...and I agree.  However, because of my job I have to be able to get to work in a dependable safe car.  Also, I need to build my credit rating so I see this as killing 2 birds with 1 stone.

Thanks for your help and if I left out anything obvious please let me know.

Thanks for your help,

Happy Shooting!

Check out the rates offered through local credit unions, rather than banks.

In any event, comparison shop.

Age of the vehicle factors in on the rate for used auto loans.  My credit union's current published rates are as follows:

Rates as low as       APR
Model Year 2008-2006 6.59
   (60 month loan)
   
Model Year 2005-2004 7.99
   (60 month loan)
   
Model Year 2003-2000 8.99
   (48 month loan)
     
Of course, if you are looking for a shorter term, the rate will be less.   If you shop around, I'm sure you can do better, but probably not significantly.   As you are likely aware, banks aren't exactly handing out money anymore.   I doubt your father co-signing would give you a killer rate, but given your lack of history, it may very well be the determining factor of whether or not the bank is willing to lend at all.

You can get prequalified, if they'll give you a loan at all, so don't be afraid to walk into every bank and CU in town.

I've gotta warn you, though, this isn't the best time in history to be taking on a $7,000 debt.  If you've got a plan B, seriously consider it.

Why?  I've got a secure job.  How many people do you see driving around in $40k+ vehicles who barely earn that?

Are you saying someone could come knocking on my door one day and ask for the $7000 or the vehicle back (even if I don't default)?  In terms of auto-loans, $7k has to be rather small, correct?  What about the current economy makes it any more dangerous to borrow money know?

Apparently I've struck the "if you can't pay cash, you don't need it cord?"    My thing is everyone has to start somewhere.  Quite frankly I can't afford to lose a job with good insurance (crappy pay all be it) just because I can't get a loan for 1/4th of my income...  I have to finish school and work at the same time.  You have to take some risks in life, so we'll see.

Our dispatch center is a "mixed" shop.  You can be in the union if you want, but aren't required.  You pay $30/month and basically the only reward you get is when there is a new sheriff you pretty much can't be fired. It is the teamsters...  Like I said basically they are members so they don't lose their jobs when a new sheriff is elected.  The union doesn't even negotiate the dispatchers new yearly pay contracts.  It is the teamsters.  I morally object to (most) unions of this type and that is why I'm 3 out of 15 people to not be a member.  I searched and didn't see where the local teamsters had a credit union, but it may not be on the web either.  I will talk to our union rep to see....

Any other ideas on credit unions I may qualify for as being a 911 dispatcher (Fire/LE/EMS)?

Right now, nobody's got a secure job.

Being in the public safety field doesn't mean secure job.  IIRC, a dept in Ohio fired their recruits 3 days before graduation due to budget cuts.  Remember, public safety jobs are funded by taxes.  Less employed residents, more vacant homes in jurisdiction = less tax revenue = less budget allocation.  Look at CA.  They are letting go prison guards as part of the 20,000 state employees being laid off due to budget crunch.  They have enough oil offshore to make up the downfall, but they rather put 20,000 folks out of work than drill for oil.

That being said, you will get more money by selling your car on your own.  Craigslist would be a good start.  I sold my 97 Nissan pickup last year on craigslist in 24hours and used the money as downpayment for a 2005 Dodge Quad Cab.  See if you can sell your car first. You will not get much on trade-in.  And stick to your budget.  If it's 10K, stick with 10K inventory.  Don't let the sales person steer you toward 10K+ vehicles.

ETA:  If you walk in with 4K cash on a 10K vehicle, you will get financed, even with no credit.  Will be paying higher interest though.

Buy only what you can pay cash for. You dont need a 4x4, you want a 4x4. I lived in Chicago and Northern Ohio for over 35 years without having a 4x4.

Do yourself an enormance favor, do not get a car loan. Listen to Dave Ramsey on the radio or buy his book on Financial Peace. When you owe money, you are a slave to the lender - even if it is your Dad!

I have a Camaro.  I need a vehicle that has clearance over unploughed rural roads...During the recent ice storm we had 1" of ice then 4-5" of snow.  I would get a front wheel drive car, but cars don't have the clearance.  I hate driving pickups on ice because they are rear wheel drive.  I need a vehicle that has height and front wheel drive.  4 wheel drive isn't the novelty it once was and doesn't increase the price of a vehicle that much.

How am I going to pay for my first home?  I don't make 6 figures.  Even if I could save 20 % of my annual income that would be $6000/year.  Let's say I buy an average home for $80,000.  It would take 13 years 4 months to save 80k to pay 100% cash for the home, plus I'd have $0 in savings after that.  Not to mention I'd be 35 before I bought my first home.  I need to build credit.  I need to be able to drive to work in adverse weather before the roads are ploughed.  Not to mention driving around in a car w/168k miles is like driving a ticking time bomb.

Credit is a necessary demon in the world we now live in.  Sorry, I thought this was the business and investing forum.  I'd be willing to wager over 95% of Americans owe money to someone.

No more responses are necessary.  Moderator please close this thread.  I was asking about the best options for me obtaining a loan, I had already said that is a risk I was willing to take.  If I wanted a lecture on the finer points of personal economics I would have started a thread titled "The Finer Points of Personal Economics."

Thanks to those who made the suggestions about credit unions.  I'll explore that option as well.

I put 4k down on a 10k rig. I got 9.9% for 60 months and I'm only 18. Took 3 tries to get financed.

This is quite humorous.  This mentality got us into the shit were in right now...

You should have expected a lecture by posting this in the business and investing forums.  Getting a car loan is like hmmm....negative investing.

There's nothing wrong with having great credit, and using it wisely.  As long as you're not living check to check, and have money to cover your expenses for a few months, should your job go tits up; use your ability to borrow money for bigger purchases, (house or car).



Remember, everyone on Arfcom is independently wealthy, and pays for everything in cash.

60 months!!!

Yes we all know the only worse investment than a vehicle is a boat.  The difference being one is necessary one is not.  So while even a bad investment, that is guaranteed to depreciate, it is none the less an investment.

No shit.  

Wheelie - In the future a good rule of thumb is that if you can't afford the monthly payments for a 36 month loan you either need a larger down payment or you simply can't afford the car.  

The longer financing terms make the monthly payments smaller but you end up paying a lot more in interest to the financer.  You also run a MUCH higher chance of getting upside down in the loan the longer you finance.  This can then create a bigger problem when the vehicle is not usable before the financing ends because you typically end up rolling the financed portion of the old vehicle into the new one you buy.  This creates a downward spiral since your new vehicle is worth less than what you're financing and you repeat the process over and over.

Short version of my advice:

1.  Check w/ your local credit union (there ARE local credit unions for municipal employees, I can just about guarantee it)
2.  Check w/ local banks.
3.  Get pre-approved at the best rate you can find
4.  IF you have found a used vehicle at a dealer, take best rate to dealer, say, "Beat this, and we have a deal"
5.  If you are buying from an individual, take best rate available.
6.  DO NOT FINANCE for 5 years, especially on a used car.  I have a 5 year loan on my car, but it will be paid off in 3 by paying extra each month.  You don't have to double your payment to have the EFFECT of doubling your payment.

If you finance for 5 years, that used car will be VERY used, on rough roads, and you will still owe on it when you want to unload it.

Car selection wise - you are used to a car that is an AWFUL performer in snow.  A front wheel drive car with any modicum of clearance will do wonders for you.  The best car I have ever driven in snow was a '97 Civic.  It was better than my 1990 S-10, my 2001 S-10 (4x4), and my 2008 Civic.  It was BARELY better than the '03 Pilot my wife drives these days.  The Pilot is a machine in bad weather.  On the roads you are looking at, you may want a Jeep product, because they are losing value so quickly right now that good deals are available.  You may even be able to find a Liberty down around your price range if you look carefully.

shooter

Smaller payments are alot easier to make while in college so i don't work much to keep the grades up. During the summer i will pay it off a good bit. Working all summer 40hrs a week It's not bad it will get paid off alot faster than the 60 but it gives breathing room

Ok, during the summer I can make about $10,000 with a second job.

Let's say I save every penny of that.
-  What type of account would it be best to put it into...just an interest bearing savings?
-  Isn't there a type of loan where you can borrow your own money?  What is that called?  Does it count towards your credit score?

Ok, you guys won.  It's snowing right now and I drove to work in my Camaro.  I'm convinced to wait until August/September when I can have close to 85% of the value of the vehicle in savings.  So what's the best way to accrue interest on money I'll be earning over a 3-4 mo period?

Spend $500 on a second set of steel wheels and snow tires.



Save your money.



Drive the Camaro until it rusts out.



 

 Snow tires don't make a bit of difference on ice in a rear wheel drive veh with no weight in the back.  And again I can drive just fine in up to 4" of snow, it's the clearance.  

I've had this car for 7 years, put 68k on it, and spent $6000 when I bought it.  I have spent more on insurance than the cost of the vehicle.  T

his winter I had to be driven to work 3 times because of the ice storm.  When you work 12a-8a it isn't the nicest thing to ask someone...

No shit!  - the $6k you financed will cost you about $1700 over the next five years.  So you now owe $7700 till paid off

Well, that doesn't sound like much now, but in 2 years when you still owe $6000 on a vehicle that is worth $3000, you might be wondering what you did to fuck up your world at such a young age.

Kids - they know it all.....

Hey, I said 36 mo loan.  Didn't act on instinct and am going to wait until next fall to purchase.  My question was, what is it called when you borrow your own money and does this practice build credit?

buy a fwd truck. all these suv's are just a step up from a mini van, and made for your woman, and children.
you can put a truck to work for you by hauling yours, and others stuff for added money.
my road is never plowed when I get off work in the morning, my truck gets me out of the city, and seven miles out
in the county home.

Can't anyone stick to the point?  And I'd take a Jeep Cherokee 4x4 vs 4x4 truck out there.  Better handling, acceleration, traction, seating, gas mileage, etc...  If I wanted to haul hay bales or mulch and needed a truck bed I'd get a truck.

try to pay cash!!!!!, i see alot of decent cars including 4x4s for 2k, their older,.... but think full insurance coverage required on ANYTHING bank financed my friend.CL is a good place to look for stuff plus theres alot of scams to beware of.~

I'm planning on saving every penny from my second job this summer which should earn me around 10k.  That is my budget.  The problem with paying cash is I need to build credit.  I heard there is a way to borrow your own saved money, but wasn't sure how this would fair vs getting a 12 or 24 mo loan and already having the money sitting in an account which I'd use to pay the loan.

I don't have bad credit, I just don't have any credit.  Credit cards are something I don't want to mess with, so I figure a car loan (with at least a 50% down payment) would be the next best option.

I get a kick out of people who don't believe in credit. I don't believe I have ever met a businessman who didn't believe in credit, and I have certainly never met a wealthy man who did not.

A car payment is the cost of getting to work. Thats what the investment is in. If he can't go to work he can't get paid, and all of a sudden it doesn't make financial sense.

You're going backwards.  Try to get a store credit card, or a credit card with a low limit first, and be on time with your payments every time.  This will help you get bigger loans, like for a vehicle.  Start small.  If you don't have any credit history, and you try to finance a car, you'll need a co-signor, and/or get a shitty interest rate.



 

My cousin bought a truck for 15k and paid it half off. In FIVE years. Thats the cost of being naive and not having credit. She was at 15%! We got her into a new car at 11 and soon she can re-fi.

In contrast I bought my car at 0%. Credit rating matters.

that sounds wise, you DO NEED credit. think of the saying if you owe the bank 1000bucks your screwed, if you owe them a million their screwed! J/K kinda. like so many bank reposessed/forclosed homes and such.

You said you have decided to wait but why? I understand the whole pay in cash thing but if you will make all the cash this summer then buy it now and just pay it all off this summer. It will help your credit and at the most you pay a hundred or 2 in interest. Your camaro won't be worth anything more if 4 months as it would now especially if it blows. I say sell out buy while the economy blows get an 06 grand cherokee for like 10 or 11 and call it good for the next 10 yrs on your rig.

paying in cash next fall puts you in the same boat your in now the next time you need a loan. I will go out and say you stand to gain nothing by waiting and you are doing nothing but making your life harder and risking it more.

Doing some rough math I'd pay less net in the summer than I would now (lower interest rate mostly).  I don't know, kind of in limbo.  If I find a deal that is irresistable I may go ahead with it.

another option that i don't think anyone has mentioned.

considered bartering your camaro on a jeep via craigslist?

It would definitely be worth a shot- put up a "for trade" ad and see if anyone's interested in swapping vehicles with you.  to make this work you might need to be willing to look at other 4wd options (toyota tacoma is my favorite).

might or might not be worth a shot.

Bigger down payment = lower interest rate.

here is my take on the subject.

i maybe biased because i'm still driving the first truck i bought 1 month after i graduated college. 16 years later and 275,000 miles.

i would keep the car you have. its dependable!! and a good performer. i would buy a beater used 4X4 for the needs of winter or weather.
i would spend $5-8 grand max. even going so far to say that i would look long and hard to find one for $3,000 and pay cash.

no payment or if you do, you can pay it off quick and build your credit.

i have a 4x4 at the farm. i drive 2x4's 99.99999% of the time and i am a hardcore outdoorsman.
how much driving will you actually be doing in 4x4 and is it worth the trouble of having one- maintenence, insurance and gas milage wise.

TRUCK or YUKON.

My thought is if you REALLY NEED a 4x4 for those few days a year, go find a old used one as a second vehicle. Get it maintained well and stay out of debt.

You may feel secure now but when everything starts comeing apart let me tell you, I went to see a doctor for chest pain for the first time in my life the other day.  Once you make a mistake like this there isn't much turning back.