My mom is looking to purchase a used car ~2001 for $15,000. Her credit SUCKS because of a divorce and life after so we can only imagine that its going to be a PITA to find a company that will finance her. Question is, how much does it change her situation if she were to put ~$5k as a down payment? Would that make it any easier for her to find a company that will finance her or will it not really matter? I know nothing about bad credit and trying to buy a used car so any help is great.
yes, $5k cash down will help alot. It will lower the loan to value ratio (amount of loan / value of car), and make it easier for a lender to grant the loan.
Wether or not it will help enough to actually get the loan depends on her credit AND financial situation.
Tell her to check her credit, make sure it is all accurate (see: credit boards forums), and get her scores
IIRC Capital One Auto has been awefully lenient with credit, and i’ve seen them (in two cases) write a $13k & a $18k loan (upto ~105% ltv) on used cars for people with solid income & credit scores in the 620-640 range on Equifax & Experian.
This little tidbit may help, but She (and you) need to do a little more research if she wants to get her credit info straightened out. It can be a pita, but is overall incredibly worth the time.
Take her to a buy here pay here place, Most of them suck i know but if the credit cant be approved for a loan they should be willing to deal esp with 5k as a down payment. But do with ^^^ suggested, get the reports an see where it stands then determine your next moves
This isnt something that she would even consider. Her car that she has now works fine but shes looking for something else right now for some reason. I dont think her credit score is in the 600’s 
it is gonna be pretty hard
i was just starting to build my credit when i bought my truck and nobody would touch me except for gmac and the only reason they did was because i work for west herr and my intrest rate is through the roof
i bought it for 9000 and my loan is for 4 years and it ends up equalling 16000 or something like that so if she did get financed for 15000 she would prolly have a high intrest rate and end up paying double for the car
but good luck
33% down payment will go along way.
If she doens’t care about the credit file, tell her to just go apply on LendingTree.com. Be sure to specify in the application that she is putting down a large cash DP.
Obviously she is in no rush / need of another car. She can take any denials from lending tree and request the free credit report that your are entitled to when denied for a loan based on credit info.
At least she can go through her reports and make sure that they are accurate.
Inaccuracies alone (reporting wrong credit limits or pmt historys) can make a big diff. Also, if accounts are reported in error - even if it is a miniscule error - she could potentially have them removed from her report. Its a low percentage thing, but a low percentage of 250million reports is still worth while.
and… ITS FREE
Its a BAD idea to do this if her current car works fine. A high interest car loan will bury her. If her credit still sucks then that means she cannot afford to pay it off… hence she cannot afford a new car loan either.
She defaults on the loan the creditor takes the car back and leaves her with NOTHING. No car, and no cash to get anthing else.
You should talk her into fixing the credit first. Even partially.
amen.
But fewer & fewer people even consider this as good advice now adays. I’ve tried till i was red in the face. Meh.
Ya this is the route that Im looking to talk her into. I have some debt too that I should take care of. Maybe I can talk her into doing it with me lol
Nikuk knows what he’s talking about because thats exactly what I tell people every day that have credit issues. It’s probably not going to be easy so if you have any questions don’t be afraid to ask. I run a car dealership as well if there is something I can help with.
i think the real question here is how comfortable will she be with the payments. for example, if she is pulling in 3,000 per month after taxes, and then has 2,500 of monthly expenses, i would probably not recommend a payment that gets her precariously close to break even on a month to month basis. if she is pulling in 4,000 per month with 2,000 in expenses, then it would probably be worth the extra interest she would have to pay on a higher % loan in order to re-establish her credit. in the second example, she would be living well within her means.
there are ways to get money for EVERYTHING in this world. you want a bigger house? you want a faster/nicer car? you want a vacation? you want a boat? borrow money!!! the fact is, someone, somewhere will loan it to you.
however, look at the subprime mortgage market that has gone to shit. people love to reject the notion of individual personal financial responsibility. yes, banks should have been more wary in issuing creative and high rate loans, but people do need to take a little more heady approach when it comes to their personal finances.
the true question is, how much of a monthly payment can she COMFORTABLY afford. and also, does she really need a newer car. also, if she is currently late on paying other bills or expenses, a newer car really shouldnt even come into the picture.
2001 for $15,000 sounds like it must be a nice car?
People with bad credit should not be borrowing money.(Period)
There are certain things certain people shouldn’t do, fat people shouldn’t try to climb Mt. Everest, etc.
If you borrow money at higher rates because of bad credit the hole just keeps getting deeper and deeper.
Has she tried to get a loan through a credit union?
they really do loan to anyone
OP. Have her get the credit report. Have her sign up for an account ( or you do it for her ) at www.creditboards.com. There is a sub-forum: “Auto Financing.” In there is a credit application you can fill out and post… and someone there who is extremely experienced ( and accurate ) will review it and tell you the potential results, usually within the same day.
If she doesn’t want to do that… go fuck yourself
that paints people with a very broad brush. your comments assume people cant change, and that their credit is 100% the result of negative controllable actions on their part. In general, you are probably right, but the percentage of time your assumptions are incorrect is too large to ignore.
people get into bad credit for a variety of reasons, probably the most pervasive being the significant lack of personal financial education. but uninsured illness, divorce, lawsuits, unexpected repairs, and other shit happens. it isnt always wreckless consumer debt.
in this case, i dont know, nor is it any of my business at to why this lady’s credit is in the shitter. but, i do know this. if she has the disposable income to support a car payment comfortably (even with a subprime rate) and that income is SUSTAINABLE, then i see no reason for her to avoid borrowing. but the conditions have to be right.
i say find a good used car for $5000 and not even worry about the fiancing…you can find a decent car for $5k…hell i;ll sell her my 1999 Subaru Legacy for $2500 and she doesnt have to worry about a darn thing to make it easier on her. you know…
i say take the $5000 and find a car dont take out a loan for a car.
but that just me.
i couldnt agree with you more.
i havent had a car payment in 7 years? but ive had a few cars.
I have had 25 cars in my 3 years span of driving and only 1 of those car i had financed and it was the mustang and i regret ever getting it because i hated the car payment not ever agian! lol
yeah, this purchase does not sound like a good idea. I also reject the notion that “bad credit happens to people” people cause bad credit.
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Well until you’ve been in the situation, then you have no idea. Credit problems can come from a lot of things. I dont completely disagree with you about people being the cause of it but I dont think that it always is the persons fault who winds up with the bad credit.
In my case, it is my retarded Dad who fucked me over. By court order, he was supposed to pay my tuition to ECC for 2 semesters. My attorney told me to do the payment plan option that ECC has where you pay your tuition over the course of the semester. My dad payed the first one and then defaulted on the rest of them. Because everything is in my name, Im left with the tuition on my credit report as not payed. Not my fault but I get fucked in the long run. ECC never notified me because they were aware that he was supposed to be paying by that court order. I dont know how they let me enroll for the second semester after the first one wasnt paid for but whatever.
And “TheBlue” Before you say something retarded like youve done in some of other posts, yes I know that there were ways around this problem that probably should have been taken and that ultimately it is up to me to make sure that my shit gets taken care of but…This is life. LIFE happens to people. Not everyone has a perfect background/history. In the infamous words of DJ Dstar “it is what it is”
OT: “We” have decided not to get the new car and to do the right thing and fix the credit problem first. Now its just taking step one…