Can I ask, or is this rude?

[mudnuri]

finally in the market after my bk discharge in July. cleaned up my reports pretty well, all is now IIB or gone. No derogs since my discharge.

 

$7500 down, looking at a purchase price of around $20K.

 

now my question. Around here, dealers offer "guaranteed financing". If I see the sign they use, I know it is credit acceptance, from the design of the sign. No biggie for most, but I IIB'd a credit acceptance loan. I have a feeling, they are not going to approve me with that.

 

I'm okay with a very high interest rate, because I hope to pay it off early, and/or refinance. BUT.....can I ask the FI guy, who the guaranteed lender is, or is that considered rude? I know its your job to get me financed, but I'd rather not waste both your and my time, if it is indeed CA and they wont finance me. Unless, maybe they will with a IIB with them...dunno....

 

So thats my question- is it rude to ask??

 

Brandy

[mk_378]

There are specialized companies that want those with recently discharged BK. It's a completely different situation than general bad credit. It's actually better because the lenders know that you can't BK again for several years.

 

All dealer advertising is hype that is intended for only one purpose: get you in the door. There is nothing absolutely guaranteed. A good finance manager will look at your reports and know not to apply to companies that are certain to decline.

[mudnuri]

I emailed the dealership I am interested in working with, and was up front about whats on my report. Awaiting a reply, so hopefully the FI guy at this dealership is on the ball with it.

 

Brandy

[Daddy]

Hello Mudnuri. $7500 is a LOT of money to get a nice, reliable used car. Since you are trying to get on your feet, this may be the best route to go. It may not be a good idea to give someone $7500 so that they can approve you at a "very high interest rate". You'll be so upside down, it will be unreal.

 

I just ran a few numbers. After your down payment and taxes and fees (lets say you finance about $14,000) and an assumed 20% interest rate, your payments would be $371 a month for 60 months. If you bought a reliable used car for $7500 (you can even get one for less), and bank that $371, assuming 8%, you'd have about $27,234.

 

Good luck with your decision!!!

[Daddy]

Let me add, I'm not against financing vehicles. I'm just against people getting hit upside the head with ridiculously high rates. I financed a 2007 Fusion last year with a 2.9% rate. I bought my first car from the dealership I worked at in 2000 with a 13.3% rate. To this day, I feel bad about that.

[hegemony]

I recommend filling out an "application" for Marvbear to review. I bet you do not have to use the type of service mentioned in your post.

 

good luck!

 

here's the link:

 

http://creditboards.com/forums/index.php?showtopic=197666

Edited November 26, 2008 by hegemony

[mudnuri]

Hello Mudnuri. $7500 is a LOT of money to get a nice, reliable used car. Since you are trying to get on your feet, this may be the best route to go. It may not be a good idea to give someone $7500 so that they can approve you at a "very high interest rate". You'll be so upside down, it will be unreal.

 

I just ran a few numbers. After your down payment and taxes and fees (lets say you finance about $14,000) and an assumed 20% interest rate, your payments would be $371 a month for 60 months. If you bought a reliable used car for $7500 (you can even get one for less), and bank that $371, assuming 8%, you'd have about $27,234.

 

Good luck with your decision!!!

 

This is where the shallow side of me comes in to play.

 

I agree with you, it is a lot of money. My plan when I filed my bk was to do exactly this- save the money, and use it as a down payment. Hopefully to decrease my interest rate.

 

I am not buying new, the vehicle will be 3-4 years old, with probably 50K on it. A few I am looking at are GM certified, and have a warranty.

 

I dont think I'll be upside down- if KBB is 28K, and i pay 18K, wouldnt I be 10K ahead? Even with interest, which I'm guessing will be about 13-15%, given my scores etc..I dont think I'll be paying 10K in interest.

 

I have been putting $560 into the bank per month, since July to treat it as a car payment. I even gave myself a due date to move the money into the account. It hasn't "hurt" yet...???

 

Keep your thoughts coming- it is appreciated.

 

i do know that when I get in my jeep I paid $1,000 for in July, and realize as much as i hate it, it hasnt cost me a PENNY to drive, and only costs $50.00 per WEEK in gas, it is a nice feeling......BUT when I have to go downstairs to start it, and the seats aren't heated, and the windows aren't power, and there is no CD player well......... I HATE IT!

 

Thanks guys

 

Brandy

[mudnuri]

I recommend filling out an "application" for Marvbear to review. I bet you do not have to use the type of service mentioned in your post.

 

good luck!

 

here's the link:

 

http://creditboards.com/forums/index.php?showtopic=197666

 

 

much agreed will do once I purchase my other score

 

Brandy

[Uncle Leo]

...BUT when I have to go downstairs to start it, and the seats aren't heated, and the windows aren't power, and there is no CD player well......... I HATE IT!

 

Well, I can help ya out here... Your body heats the seats, you can always get a CD player installed, and as far as power windows...

 

 

See how much money I just saved you?

[mudnuri]

...BUT when I have to go downstairs to start it, and the seats aren't heated, and the windows aren't power, and there is no CD player well......... I HATE IT!

 

Well, I can help ya out here... Your body heats the seats, you can always get a CD player installed, and as far as power windows...

 

 

See how much money I just saved you?

 

 

funny guy you are

 

Drove the jeep tonight to work- still hate it

 

Brandy

[MarvBear]

finally in the market after my bk discharge in July. cleaned up my reports pretty well, all is now IIB or gone. No derogs since my discharge.

 

$7500 down, looking at a purchase price of around $20K.

 

now my question. Around here, dealers offer "guaranteed financing". If I see the sign they use, I know it is credit acceptance, from the design of the sign. No biggie for most, but I IIB'd a credit acceptance loan. I have a feeling, they are not going to approve me with that.

 

I'm okay with a very high interest rate, because I hope to pay it off early, and/or refinance. BUT.....can I ask the FI guy, who the guaranteed lender is, or is that considered rude? I know its your job to get me financed, but I'd rather not waste both your and my time, if it is indeed CA and they wont finance me. Unless, maybe they will with a IIB with them...dunno....

 

So thats my question- is it rude to ask??

 

Brandy

 

 

He won't know who the "guaranteed" lender is till he/she submiits an application on your behalf. I seldom to this when the only contact I've had with the customer is email contact.

[IndyPoolPlayer]

I agree with you, it is a lot of money. My plan when I filed my bk was to do exactly this- save the money, and use it as a down payment. Hopefully to decrease my interest rate.

 

I am not buying new, the vehicle will be 3-4 years old, with probably 50K on it. A few I am looking at are GM certified, and have a warranty.

 

I dont think I'll be upside down- if KBB is 28K, and i pay 18K, wouldnt I be 10K ahead? Even with interest, which I'm guessing will be about 13-15%, given my scores etc..I dont think I'll be paying 10K in interest.

 

If its 3-4 years old now, it'll be 8-10 years old by the time you pay it off. Your interest rate will likely be somewhere between 16% to 19% with the recent BK. $18K x 15% x 5 years = $13,500 in interest charges, or $525 per month. Marv would know better but typically you can't "buy down" your auto loan rate.

 

KBB isn't very accurate. If you buy it for $18K that's pretty much the market rate. Just out of BK you're not going to get a "good deal". I just went through this with a truck. KBB said my vehicle's trade in value was $24K. Right now dealers are only offering $18K at the most for trade. "GM Certified" is only good as long as GM remains in business, and if GM undergoes a "reorganization" under Chapter 11 all bets are off as to whether any warranties will remain in effect. Remember Daewoo? Or ask someone from the UK about Rover. Both companies went under and to my knowledge, Daewoo was given "best effort" service through GM in the US and Rover just went bust and left their customers high and dry.

 

As much as You-Know-Who annoys the #@%$ out of me, this might be the one circumstance where buying a good used car with cash would be a good thing. You can get a good used car with power windows and a CD player for $7500 and you can put what you don't spend into an ING account (see the link here on CB for a referral) and earn about 2.5% on your money.

 

Buying cars at high rates is NOT a good way to rebuild credit IMHO.