First time financer question
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Joined: Sep 2003
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From: Fresno, CA
First time financer question
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....
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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Joined: Jul 2003
Posts: 108
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From: Bedford, TX
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
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
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Joined: Sep 2003
Posts: 45
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From: Wichita, KS
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!
$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!
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