Car loan requirements (Chelsea)

I'm sure there are people out there who will give you a loan ... the problem is that without steady employment and a high credit score, you won't get the lower interest rates so you'll probably wind up with pretty high monthly payments and a big down. If you've got a family member who can co-sign for you, you'll get a better deal. I co-signed for my youngest DS to get his car.  I put $3K down for him and he got a 2005 Nissan Sentra for $200 a month, and that includes the insurance. I was willing to do that because he's really responsible and I knew he'd make his payments regularly and on time.

Joyce

 I have never bought a brand new car in my life. It just doesn't make sense. Buy a car that is 1 or 2 years old so that you can expect that nothing major will go wrong yet you won't get the initial depreciation that every new car has once you drive it off the lot. Snobbery is not a good enough reason to lose $8k+ in 5 mins.

Price out the new car that you want then see what price you would pay for that same car if it was 1-2 yrs old. You'll be shocked.

Also, you'll need steady employment to get a loan. 

I have good credit. I actually have a gas card on my credit from before I turned 18 (my Mom put my name on the app, thinking it just meant I would be able to use it, when in actuality it put it on my credit...), so my longest line of credit is like 2 1/2 years, and I've never been late on ANYTHING... My credit score is close to 700, which is pretty good according to every breakdown I've seen. I'm sure it'd be over 700 if I didn't have a bit of credit card debt...

In any case.. My Mom doesn't have good credit, and my Dad's not a part of my life. One of my sisters has good credit, but she's married, has a 2 year old, and has plenty of stuff to worry about herself, so I really wouldn't want to ask her to cosign on something for me (and anyway..she's a stay at home mom, as in no income of her own..so really maybe I'd have to ask my brother-in-law to cosign?). Then there's my Grandmom, but honestly, my cousins and sisters have asked her to cosign on things and lend them money SO many times that she's not an option for me. I'm a little too proud to be probably the only (adult) grandchild who's never asked her for or owed her anything. LOL

I don't knooowww what to doooo.. Sigh..

Jewlieee

Snobbery is not a good enough reason to lose $8k+ in 5 mins.

Haha, good point. Okay, but that still doesn't solve my loan problem. A 2 year old car is still going to be too much for me to pay cash, obviously.

Jewlieee

Also, you'll need steady employment to get a loan. 

I know, I'm trying to figure out how much & for how long.

I got my first new vehicle at 21 with a parent as a co-signer (loooooooong time ago, lol). My parent's credit was not great but not terrible either...and at that age was still building credit history myself.

These days I think almost anyone can get a loan but the APR can be astronomical. Leasing is another option, if you don't drive many miles, etc. Having income is a must though, unless you're paying cash.

Good luck wishes to you!

I am 22 and I bought a brand new car last July.  I bought a VW City Jetta which started at $16,700, after I got the stuff in it I wanted (automatic, air conditioning, cold weather package) and after taxes and such it went up to $24,000, not bad for a new car.  I ended up getting financing through VW.  I put $12,500 down on it the day I picked it up, and i got 1.9% financing for 39 months, and my payments are only $350 each month.  VERY affordable!! With my insurance on top it comes out to just over $500 a month.

I love my VW, and I am so glad the price is decent.  A lot of cars I looked at were so much more expensive!!

You might be able to go to different dealerships and see what each will possible give you as a loan and such, just be careful to read the fine print!  And check the interest rate they will charge you. 

TAOofGoldyShep

There are plenty of new cars out there for what you want to spend or less (Toyota, Honda, and Hyundai are some).

Yeah, I'm looking at Toyotas and Hondas mainly. They seem to be the most reliable, plus they're usually cheap and generally the safest. I lug my cousin's kids around a fair bit (not to mention me and Cherokee)..and accidents are kind of inevitable around here..so safe's a big factor for me.

I just don't know what to do. Basically my only option for a job without a car is something within walking distance..and I really don't feel like working at 7-11, CVS, or Denny's. Maybe I should suck it up and feel my sister and brother-in-law out about helping me.. But if I can't show income (and it looks like even little shady places require you to show income for the past 3 months..grr), I'm guessing it would have to actually be in their names, not just as a cosigner. That's a lot to ask...

Have you checked around at Carmax? I'm not sure what their loans are set up like, but they have some nice cars. IMO, you should be able to find something perfectly nice for $10k or under. Nothing wrong with a good quality used car! Don't let "the OC" get to you toooo much!

I was in virtually the same position a few years ago and I learned a lot from it:

• First, most lenders - even "buy here, pay here" note lots - require at least 3 months of verifiable income and they will ask your employer what your future with the company is. They also require 2 or 3 years of verifiable steady employment.
• In this case you can't really look at the purchase price of the car, you have to look at the payment. Your payment generally cannot exceed 1/3 of your gross monthly income. In this case a new car sometimes works out better since they will finance it longer and lower your payments.
• If you buy at a note lot then you may not need a co-signer, but you will have to provide verifiable personal references with their addresses and phone numbers - and the financer won't hesitate to harass them if you are a day late.
  
• A large down payment will greatly improve your chances of being approved - the banks like you to have a lot of equity in the car. It lessens the chance of you letting it get repossessed and they have a better chance of getting all their money back if it is.
• Banks also like to see responsible credit history, but they don't like to see credit card debt. If your total credit utilization is above 9% of your available credit then it is hurting your credit score. Get your utilization down as much as possible before you apply for anything. The forums at myfico.com are great for credit score tips.
• After all of this, if you do get approved, you'll probably be paying 14-19% interest.
  

With the economy being what it is right now I'd expect these requirements to be much stricter than they were when I was looking. They may be holding payments to 1/4 of monthly income or requiring longer employment periods now. Honestly, and this comes from being in your shoes, I wouldn't get your hopes up. Your best bet may be to get a junker that you can pay cash for and use it until you have a down payment and good employment history. Good luck!

Personally, I would suck it up and get a job within walking distance. At LEAST for the expierence (something for your resume), along with the 'job title' for your loan. I could not imagin being unemployeed....I get so bored!

I'm on my second car. The first was a 12 year old saturn, that my parents bought new - 13 years ago. They gave it to me - I paid for all the repairs until it died. Now I have a 2002 Chevy Tracker - I LOVE it. My parents paid cash for it - and I'm paying them back. I put the downpayment on it. It was just easier to do it this way vs. me taking out a loan and such.

I got my car at a small little dealership down the street - my mom taught the owners grandkids, so we knew we were getting a good deal. But you do have to be leary of those small places - not all are good! Read into them, talk to people. But I would NOT buy a new car... it's just not worth it.

I would just get a junker, honestly.  I make a decent salary and have been out of college for a few years, but we drive a junker.  More than one business/econ professor has told me that a car loan is the worst loan to get and there's NO reason to get a new car unless you can basically pay for it up front and can afford the novelty of having it brand new.  I made it 22 years before I ever had a car.  I never had one even in college when I lived off campus and worked 2-3 jobs at a time.  Besides when DH got epilepsy and lost his license for 6 months, getting married was the first time I ever had a car I could just use whenever I felt like it.  I barely knew where to go first, lol!  If it's not there, you'll adjust.  If you need one to get to/from work that's understandable, but I'd save up some cash for a junker, not burry yourself in debt just for the novelty of a new car.  No one in my family has ever had a new car and I doubt we'll ever get one.  The second they roll off the lot, they depreciate down to 70%. 

I didnt read the replies yet, but I wanted to say -- YES you can get a car loan with working part time, school loans up the butt, limited credit, no co-signer.  However, be prepared for higher interest.  We did it 3 years ago, though, so I'm not sure what rates are now, but it was like 8 or 9 % interest.  We paid it off early though so it didn't matter.  But we were in school, I worked at a grocery store, the only money down was our trade-in for like $1200.....  it can be done.  We went with older cars for years, and in one year they cost us $7000.  That was half of a new car, and convinced us new was the way to go.... new cars tend to have better warranty's as well. 

I grew up with "junkers" and when I had the opportunity to buy new at 21, you betcha I did. I have been stranded too many times (as a kid) with cars that broke down and also watched the financial ruin and stress in general those issues can cause. With that said, used cars (certified previously owned) do not need to be junkers. There are many used cars that run well, look good, are safe, have a limited warranty from a dealer and usually it's because they've been taken care of.

I tend to keep my cars for many years (new). The new Subaru that I just bought will be in my possession for probably 10 years, if all goes well with it which I anticipate it will. The Volvo I traded in for the Subaru had 158,000 miles on it and it needed some major work (parts are expensive and their not easy to get at, so labor is high as well). I bought the 2000 Volvo XC AWD used with 136,000 miles on it (pd $5000). It treated us pretty well for 1.5 years but it had not been taken care of before I got it. The Jeep we have I bought new in 1999, it has 120,000 miles on it or so. At 9 years old, depreciation off of the lot is a non-issue. I've never regretted, personally or financially, buying new but I usually do when buying used - typically buying somebody else's problems.

In my opinion, buying a car that is only a couple of years old with little mileage is the best bet for going with used. Although in NE, there are a lot of older Volvos, Volkswagons, Subarus, Hondas and Toyotas that will run forever. A brand new car is definitely not worth going into debt for, so make sure you think everything through.

For what it's worth, there you have it! :o)

One more comment on the old vs new car -- we bought Hyundai, and I LOVE it, but the 10yr warranty is only good for the first owner.  If you buy used, the warranty is only 5 yrs from date of original purchase.

 There ARE a lot of good used cars out there, don't knock one a couple years old, but I like knowing every little last thing that has happened to that car and knowing that I can make it last 10yrs or more.  I guess I'm paying for peace of mind, but really we paid $14k for a BRAND new, almost fully-loaded car with sunroof.... and I will stick by my choice to buy new.  Granted our credit is TONS better now that we've had and paid off a car loan, so we'd have a lot more options this time around, but even with sky-hi interest (at the time) our payment was only about $250/month plus insurance.

Also keep in mind that certain vehicles are a lot more pricey to insure -- and some insurance companies give you a discount on a new car, not just for safety features but for the first 3-4 years we get a good discount for just owning a new car.