Auto-Loan woes

Eat_Fire

I will try to keep this brief I think I have explored most of my options here, but let me know if there's something I have overlooked...


So I want to buy a used vehicle; a Jeep Wrangler to be specific. I have a good credit score: 706 and no outstanding debt. However I have never had a huge loan and currently only have 1 credit card with a $750 limit. Essentially I have no credit history aside from living in apartments.

I have been turned down by my Chase bank, and have applied at a Credit Union today to see if I can get approved. The representative told me based on what he was putting on my application that I could expect to be required to have a co-signer or a huge down payment required.

The problem is I have neither. Spent my savings on an extended vacation and I am finacially better off than the rest of my family so I don't really have an option for a co-signer.

Is there anything I could do to get a loan for this car or can I only wait and save up a large down payment?

Chanus

Saving up a large down payment is a good idea either way.

Do you have a Carmax or other such outlet in your area? They're pretty lenient on lending, but you'll probably end up with an extortionist interest rate (literally 18-24% in some cases).

It really comes down to whether or not you can wait until you have a down payment (recommended) or if you need/want the car now and are willing to pay through the nose for it. You're basically paying for the convenience of being able to have it now.

I would highly recommend saving up a down payment if you don't need a vehicle immediately.

MisterGrok

You can try Lending Club. I got a great credit card consolidation loan through that site. The interest may be high for an auto-loan but, since you don't have much history with actual credit cards or loans, you'll be hard pressed to be able to get a great loan on your own without a down payment or co-signer because that's just how it is right now.

Also, where did you get your credit score information? If you check with MyFICO.com, you'll get great pointers for improving your credit overall - following those suggestions will definitely make places more interested in giving you an auto-loan.

StormCrow420

I would follow the 1st post's advice and save up as large of a down payment as I could.

If you are getting rejected for loans, it's because you don't have the equity or assets to justify such a loan. Maybe you should re-evaluate your needs based on that. While you may be fully capable of paying off the loan, what happens if you are left unable to work or something? You'd be suprised how quickly you can get into trouble borrowing money. I've always been pretty smart with my budget, but it didn't stop me from raking up 10k in credit card debt over the last two years, and it's a pain in my ass.

Also, taking out a loan to buy a used Jeep Wrangler? Make sure you calculate the cost to repair and the cost of high gas mileage into any finacial plan you prepare.

Get a bike or a bus pass. Spend you money on wine, women and song, waste the rest.

Liquid Hellz

Do they have dealer financing? Is this new or used? Usually dealers will help you or provide you with a loan because they want to sell the car. The way the economy is going I would imagine they are going to do everything possible.

PeregrineFalcon

Liquid Hellz wrote: »

Do they have dealer financing? Is this new or used? Usually dealers will help you or provide you with a loan because they want to sell the car. The way the economy is going I would imagine they are going to do everything possible.

It's a used vehicle, but he doesn't specify if it's a used-car or new-car dealership.

I'd expect a rate around 7-8% from the dealer - depending on how old the Wrangler is though, they may not be willing to finance a vehicle of a certain age.

Also have you looked at insurance, maintenance, and fuel costs? The first two will add up fast on any vehicle, and as a Wrangler is a box with four driven wheels, the third can bite you in the ass fast.