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Beach4me

First auto loan in years and questions

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Hello,

 

We have not had a car loan or purchased a car in over 10 years so I am looking for some advice. Our company did not survive 2008 very well and so our credit scores are not great (612/620). We have literally driven the tires off of our current car and need to purchase another. We are qualified through Cap One ($40,000 max - 4.63% - 10.42%). We are looking to buy a used car around $15,000. We should be able to trade our car in.

 

1. Is the Capital One deal a good one? Would there be a chance we could receive the same APR amount at any dealership? With Capital One we are limited to around 40 in our area. Still trying to figure out the "catch" to their deal.

 

2. How soon do you think we could refinance to a lower rate? Six months? A year? Would this most likely be a significant reduced rate? We could afford a high car payment for a year if necessary as this would be our only debit other than our house.

 

3. How much does a car loan help/hurt your credit scores?

 

Anything else we should know? Thank you for your help!

 

 

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You have an approval with cap one. If you get greedy searching for better you have to be willing to suffer additional inquiries.

 

A refinance depends on numerous factors, but I note that a 4.63 rate is not usurious.

 

Auto installment loans do very little to improve a numeric score until they reach about 3 years of age on your credit file(s).

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2. How soon do you think we could refinance to a lower rate? Six months? A year? Would this most likely be a significant reduced rate? We could afford a high car payment for a year if necessary as this would be our only debit other than our house.

 

 

 

 

I wouldn't take on a payment that you can't afford for the life of the loan. A refinance is never a guarantee. Depending on your credit you could possibly get your scores up pretty quickly. It just depends on what you have going on. Once your scores and profile are good enough the loan has to fall within the banks parameters. So if you are upside down on the new car you might not be able to refinance at all regardless of your credit.

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Thank you for this helpful advice. Based on the Cap One website and what they approved us for. It looks like a used Toyota Camry around $15,000 range is 7.7%. The lower rate is a new car which I don't think is a good idea. My husband likes the Hyundai Santa Fe but I am nervous that we will be upside down rather quickly, even buying used.

 

We have a judgement on our report which doesn't slide off until 2017 which according to our CU is hurting our ability to get a car loan through them. We do not have any bad other marks for the past three years. Dpes this sound right?

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What year Camry? I have a 2012 with 89k miles on it. I Haven't had a single problem with it. It will be traded in for a minivan soon though since it just doesn't have enough room for the family any more.

 

When I was using the Capital One navigator tool which shows you the cars and APR's I did notice that they seem to like down payments and that helped with the APR a lot. If you have some cash you can add to it try adding that in and see if it helps.

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We were thinking around a 2014. I hear they are super reliable. Thanks for pointing out about the down payment. I had not really noticed it. If we put $2,000 on a number of the cars it drops the interest rate by as much as 2% but not all of them. I really appreciate your advice and input!

 

Anything else I should know?

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The 2014 is the same as the 2012. It's a good car. If I was buying a preowned Camry I'd try to get a 2015 just because it's the newer body style. Same engine, transmission, etc. just an exterior and interior refresh.

 

The 2% rate drop is about what I was seeing. I haven't purchased anything yet so I can't comment on how the Capital One process is after the preapproval.

 

As far as your current vehicle goes if you are planning on trading it in I'd run by Carmax if you have one in your area and let them appraise it. They will buy it from you even if you don't buy a car from them. I've done it twice and had a few friends do it and they are usually able to pay more than the dealership. Their quote is good for 7 days now I believe. I bought a Subaru a few years ago and was trading in a jeep. Carmax offered $1500 more than the Subaru dealership could do. I sold the Jeep to Carmax and the Subaru salesperson picked me up right there at Carmax and took me back to the dealership to finalize the deal. He said they actually do that all the time. You can still get more for the car selling it yourself but it is more hassle.

 

Good luck!

Edited by gamecockcountry

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You have an approval with cap one. If you get greedy searching for better you have to be willing to suffer additional inquiries.

 

A refinance depends on numerous factors, but I note that a 4.63 rate is not usurious.

 

Auto installment loans do very little to improve a numeric score until they reach about 3 years of age on your credit file(s).

That or you pay them down to 5%, some history still required though.

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I have narrowed it down to two cars, both 2014. I would like to make an offer on one tomorrow. What is an acceptable percentage off of a used car price to start? I understand that there is more leeway with used cars but how much? This one appears to be at a high volume dealer - is that a good or bad thing? The other is at a small town dealership.

 

What about the doc fees? Both dealerships are around $600!

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If you see one of my dealerships car ads on the internet, we don't negotiate. We don't advertise our second best price online.

 

Also, in my dealership chain, we do not negotiate the doc fee.

 

YMMV

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I have narrowed it down to two cars, both 2014. I would like to make an offer on one tomorrow. What is an acceptable percentage off of a used car price to start? I understand that there is more leeway with used cars but how much? This one appears to be at a high volume dealer - is that a good or bad thing? The other is at a small town dealership.

 

What about the doc fees? Both dealerships are around $600!

 

I'd offer internet price OTD if the car passes the sniff/drive test. That seems to be the margin built in more often than not. Worked for me when I bought my Lexus.

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Found our car at a no haggle dealership and it was a great experience. I feel that we received a fair deal. It is a Certified 2014 Toyota Rav4 XLE with a little less than 7k miles. The price was $21,500 and then they gave me a thousand for my car which was generous. Carfax was clean. We made a $4,000 down payment and left happy. The Capital One pre-qualification was soooo easy that I could hardly believe it. The interest rate is 5.59% for 60 months. Hopefully at some point it will be possible for me to re-finance. I am thrilled that I no longer have to carry water in my trunk for when the car overheats on the highway!

 

Oh and free oil changes for the next 2 years and annual inspections for the life of the car. Anyway, I will drive this one til the wheels fall off....should be about 300,000 miles right?

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