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I am moving to a state that will require me to purchase a 4wd vehicle. I currently have a vehicle financed, in good standing. Next month I will have the funds to either:


1) Payoff my current car and finance the 4wd vehicle or....

2) Pay cash for the 4wd Vehicle


I heard the longer I pay on time on an installment loan the better. Would starting a new loan be less beneficial than just continuing the original?

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An older installment loan with a low balance relative to the original loan amount is worth more to your score than a new installment loan, plus a new account will pull down your score.


Which state requires AWD?  We get our share of snow and ice in the winter, and my RWD sedan is fine 99% of the time.  Some winters I'll have groceries delivered once or twice, but that's as much laziness and hatred for cold air as much as anything else.


Just wondering if your AWD requirement is like the current wave of new parents who think the first child creates the necessity for a 3-row SUV.  😛 

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On 9/9/2021 at 10:58 AM, Deacon328 said:

Yes. At about the same time I will be purchasing a home. I'm not familiar with credit scores and what affects them enough to determine if one or the other would hurt or help my credit score. 


Where are your scores now?  DW just paid off her lease and opened a new loan for a car.  Minimal to no imapct on scores whatsoever (all 790+).  You can obtain new credit when you are trying to get a mortgage, just be prepared to answer questions about it during the process and be cognizant of how the new loan obligation will impact your DTI ratio.  With financing so cheap these days it makes little sense to use all that cash (which you will need for closing, BTW).

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