BlueOakleyz

I've never bought a car on finance before and have basically a non-existant credit history however in a year's time I plan on putting 10,000 down and having a 60 month plan for payments to be less than $375.. does this sound reasonable? I might have a parent buy for me so the payments are lower I suppose....

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mikeb

if your parents have good credit having them co-sign will help

XK4

A lot depends on what interest rate you can get. This is a function of your credit rating and the market. 8%, a $375 payment and a 60 month period lets you borrow approximately $18,500. Adding your $10K down, gets you $28,500. If you can get 5% the loan amount changes to $19,870.

If you are saving your down payment in a financial institution (as opposed to under your mattress) you might try borrowing from them instead of from the dealer. Credit unions are really good for this and will have a lower rate than a dealer.

I'm not a big fan of 60 month financing. You're going to be upside down for a long, long time. Another option you might consider is leasing.

-Dave

carnut

I've seen PeopleFirst rates down to 3.69% -- a low interest rate can make a lot of difference. Mike is right about your parents taking out the loan for a better rate.

mikeb

I work for a sub prime auto lender
Be careful and read your contract before signing

MSMAMBA

1st of all, it depends on how much you are borrowing.

$375 for 60 months means principal + interest of $22,500. The interest rate can either be 0% or anything.

One way of getting a better deal in your situation will be borrowing from your parents instead. In general, they will have better credit rating and can get lower % from their bankers. Keep in mind that there is no tax benefit on auto loan interest, the lower the rate the better.

The financing offers by the dealership is generally a rip-off.

Also, do not do an auto loan for more than 4 years unless you have 0%.

Finally, if you insist of financing the car through the dealership, check and see if they take credit card for down payment for the frequent flyer mileage or cash back!