Really, I'm just looking for an honest answer as to if I have any chance at getting an auto loan. I'm not really very knowledgeable about the subject. I’ve heard from some people no way, and from others that as long as I had a job it wouldn’t be a problem. So I’m looking for some clarification.

I was looking to purchase a used 350z, purchase price around $22k. I was planning on putting 6k down. I really don’t have much credit. I have one credit card, with a relatively low limit, that I've had for about 7 or 8 months now. Always paid on time, but that’s it. Never really needed credit for anything else, paid cash for my previous cars etc. I checked my score on freecreditreport.com for the heck of it, and they said my average between the 3 major companies was a 693. As expected, there wasn’t much on there… just my credit card for the most part.

I'm 20 years old, and I make $500-600 a week. My employer treats me as a subcontractor on the books rather than an actual employee (so they don’t have to give me benefits I suppose), don’t know how that would effect anything. I get a pay check from them every week; they just don’t withhold taxes (my responsibility). I’ve worked there several months, prior to that I was basically self employed via some online ventures. I guess they would probably just consider that unemployed lol.

I don’t have any notable expenses besides my current insurance payments, and that one credit card. Unfortunately, I do not have anyone available to cosign on the loan, so this is just me.

I'm not very optimistic, but I really don’t know. Any info on the subject would be appreciated. Thanks.

 

Well if you are putting 6K down and planning to buy a 22K car which means you want to finance around 16K. Depend on the bank if they think you have enough work history to pay that off. Also if they don't take out taxes has nothing to do with a loan, but yes you are selfemployed then. So watch out next year for the IRS, I should know my sister had a job like that one year and had to pay taxes that year.

 

You just need to contact a bank or S & L and fine out. I see nothing in here post that would disqualify you. And $16,000 in loan will not be a huge payment.

My guess is you will find a loan with a little work.

 

You know what, I've gone through a similar situation as you...
When I purchase my first car, the 03 Altima, I was 20 years old.
I had a credit score of 720, but only about 2 years of credit history and
around $800 a month income from my part time job.
They wouldn't give me the car because I don't make enough income and have
too short of credit history.
I ended up getting the car by having them lie to the credit union that I'm an assistant manager at my job and earn 3K a month.
I paid $5000 down and ended up loading around $16000.

If this car's going to be purchased under your name, it will be EXTREMELY hard.
First of all, you don't have enough credit history.
Also, you don't make enough income...$500 to $600...they look at you
and say car payment and insurance alone will be more than that.
The car is 22K, 6K down, you will still need to finance 18K...
with interest and stuff it'll be more like 20+K...
Let's say if you get very good rate somehow...it'll still be around $300ish for
a monthly payment, plus insurance it will surely be $600 or more.

If you can find a bank or credit union that will finance you, do go for it.
Find a bank that'll load you the money before you go into the dealership,
because they won't give you the car.

I don't mean to be harsh on you...it's just that I've gone through very
similar situation like you.
I'm just giving you my honest opinion.
But I truly hope that you will get the Z.

 

you might get it but just put more down for your income, your work plus allowance if they ask, you only need a 700 score to get a good rate but your credit history is really short so if they do give you one it will probably be at a high APR, your best bet would probably getting someone/parents to co-sign for you and get the loan from a credit union to get the best APR, im sure your parents would understand if it will save you a few grand in interest at the end of the payment cycle... 5 years i presume? with you parents co-signing the loan it would still build your credit, what about insurance? a 20-year old's own policy is pretty high, especially for a male, i'd ask your parents about that too, would be cheapest if one of your parents were the primary owner of the car - put the car under their policy and add you as an insured driver.... just some suggestions

EDIT- oh just saw that you have no one to co-sign for you... just keep looking and you will find a loan, although not at the best APR, but its better than nothing

 

Of course you have a chance of getting a loan. $6,000 down on a $22,000 car should be no problem. For verification of income, take along last year federal tax return.

 

i've seen people woth FAR WORSE credit get approved for car loans, sure they pay higher intrest, but they get the loan. so if you shop around i'm sure you could find a bank that will loan you the money. if worse comes to worse you can let the dealer find a loan for you.
just dont get stuck paying too high intesrest(i've seen people walk out with a car loan with 13% and up).
see what works best for you, maybe you dont buy the Z yet, after a couple of years as long as you dont do anything to hurt your credit, then you might get approved with a good rate. then you get the Z of your dreams....

 

Where do you shop around for such loans? Banks? Internet? Brokers?

 

credit unions and banks, if you let the dealer find the loan(and they probably will) do not except the first interest rate they give you... you should be able to knock off at least 2-3% if you haggle with them

 

With those scores and no doragatories on you credit with that down payment you will have no issue getting a loan.

Just be sure you can afford the insurance, payments and up keep before you buy.

- David (use to work for a bank in the auto loan industry)

 

Go to www.freecreditreport.com (i think it is) and get your FICO score.

 

Dealer spreads aren't that high anymore. Maybe you can shave 1 to 1.5 % off what they initially offer you.

I would walk away from anything higher than 5.5% if they're not willing to go lower. Shoot for 5% and stand firm. You'll get the best rate they're willing to offer if they know you're a serious buyer.