car loan while unemployed

muninn

Ok, so I am planning on buying a new car soon, as my current automobile is falling apart, and its repair would cost about hundred times more than what it is worth. Another reason why I want to purchase a car, is to build credit, as my history doesnt have any such large purchases.
The problem is that I am currently unemployed. A lot of the work I do is contract based, and right now I am in-between jobs. I have savings, which will allow me to put down a decent down payment, and help me make payments for next few months, and family that will help out with payment in case of some sort of a dire need or emergency. My credit is very good.
Now, is it possible to get a good car loan while being unemployed? How much of a disadvantage is it? Would having a co-signer on the loan help? If so, how would that affect my credit standing?

And I have heard from different sources, that getting a car-loan through your own bank is much more advantageous, than through a dealership. Any thoughts on that?

useless4

Not sure about the current economic but in 1999 I found myself in the same exact position as you but I was simply unemployed not between contracts.

I got a co-signer and they didn't blink once when I bought a year old top line Range Rover.

You might have a seriously harder time now, but a co-signer brings with it the air of "we will get paid even if we have to break this guy's (co-signer) fingers"

Crashtard

I don't have much input as far as the question you're asking, but I thought I should just mention that you should definitely look into the cash for clunkers thing the government is doing and take that into account when you look at cars. Would have saved me something like $3000 on the car I bought a few months ago.

Jasconius

Unless you've got a big down payment you'll probably need a cosigner.

The only advantage I can think of by going through your own bank is if you get a secured loan, which means you've got a savings account that's worth roughly the amount of the car, and if you can't pay your loan, they take it out of your savings. You'll get a lower interest rate if you do that.

Chanus

http://www.cars.gov/ is the Cash for Clunkers website.

Basically:

* Your vehicle must be less than 25 years old on the trade-in date
* Only purchase or lease of new vehicles qualify
* Generally, trade-in vehicles must get 18 or less MPG (some very large pick-up trucks and cargo vans have different requirements)
* Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in
* You don't need a voucher, dealers will apply a credit at purchase
* Program runs through Nov 1, 2009 or when the funds are exhausted, whichever comes first.
* The program requires the scrapping of your eligible trade-in vehicle, and that the dealer disclose to you an estimate of the scrap value of your trade-in. The scrap value, however minimal, will be in addition to the rebate, and not in place of the rebate.

muninn

I have looked into the program, but unfortunately my clunker has too good of a mpg to qualify.

Does anyone know if having a cosigner lessens the positive impact of having a car loan of my credit history?

Chanus

Far as I know, having a cosigner is identical to not having one in regards to how it affects your own credit: Pay as agreed - Helps, Miss payments - Hurts.

The Crowing One

muninn wrote: »

Does anyone know if having a cosigner lessens the positive impact of having a car loan of my credit history?

Nope. Same effect. In fact, you both get the advantages and disadvantages.

Talk to your bank, if you can't show an (at this moment) income they may balk. If you're self-employed this may be different.

My initial thought coming into the thread was going to be "buy an older model Honda/Toyota directly from the previous owner." While that isn't entirely true considering, depending on your contract situation it may make more sense. Regardless, you won't know until you try to get a loan if you can or can not.