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Car vs. Credit

Belisarius

Belisarius

Bluelighter
Joined
Dec 13, 1999
Messages
11,029
I've only (very) recently started building up credit, after years of swearing I'd never touch eeeeeeevill credit cards. I'm told this will make financing difficult, and while I can wait a year or so to get a sterling record, I'm really itching to get my hands on the wheel by the summer. I was just wondering if this status makes currently untouchable for new and used cars via a dealership, or if I might have better luck buying from an individual, or if perhaps this situation isn't as difficult as it seems. Any advice would be much appreciated.
 
Credit cards are just one element on your credit report, bills paid will also show up but exceptionally good credit is reserved for people who have shown the ability to pay off considerable debts on time. Get a copy of your credit report first and you'll see if it's worth looking at a loan, because you could be stuck with the option of either having to deal with unreasonable interest or having to get a cosigner.

Now a bit of my unprofessional opinion... Getting a loan for a car is a sucker's game (I've mentioned before I worked in loss mitigation for one of the largest auto finance companies). IF you have the financial discipline that you can afford to lose your job right now and maintain your current lifestyle for 6 months, you could probably do a car loan, but even still the interest will be money pissed away especially when you consider that cars depreciate in value by the minute. After the novelty wears off you will probably not enjoy having to fork over a substantial portion of your paycheque that could have gone to savings for the car payments on top of maintenance and upkeep costs on the car itself which can amount to a lot regardless of any warranty.

The bottom line is you will be losing money on a luxury where a used $5000 car could take you from A to B just as fine and often cost less in maintenance and repairs than new cars that don't come with the kinks worked out. If you make a lot and can afford the expense, have it at. But if you want to grow your capital, it's really not a wise choice.
 
if you're thinking of buying from an individual, where is the money coming from?

alasdair
 
I bought a 97 civic for $2500 cash on craigslist with 110,000 miles about a year ago, it was listed for 3k. Drives great, 30mpg in the city and should last a while (knock on wood). If youre looking for a 10-20 year old car hondas, toyotas and nissans are the way to go. If you are going to buy from a person go with a friend and test everything in the car before you buy it (windows, lcoks, hood, trunk, handles, dashboard ect). If you find anything wrong mention it to the person and try to bargain the price down.

Also, before you pay them go to the DMV and get it registered. Sometimes people try to sell cars with late fees on the registration.
 
Once more, thank you all for your suggestions. :)

if you're thinking of buying from an individual, where is the money coming from?
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I have enough in the bank to cover a realistic range of values, but want to keep enough to defray other (soon to come) costs. It's less the money than whether or not even a used car dealer will consider someone with an unknown credit score an unreasonable risk.
 
thujone said:
Credit cards are just one element on your credit report, bills paid will also show up but exceptionally good credit is reserved for people who have shown the ability to pay off considerable debts on time. Get a copy of your credit report first and you'll see if it's worth looking at a loan, because you could be stuck with the option of either having to deal with unreasonable interest or having to get a cosigner.

Now a bit of my unprofessional opinion... Getting a loan for a car is a sucker's game (I've mentioned before I worked in loss mitigation for one of the largest auto finance companies). IF you have the financial discipline that you can afford to lose your job right now and maintain your current lifestyle for 6 months, you could probably do a car loan, but even still the interest will be money pissed away especially when you consider that cars depreciate in value by the minute. After the novelty wears off you will probably not enjoy having to fork over a substantial portion of your paycheque that could have gone to savings for the car payments on top of maintenance and upkeep costs on the car itself which can amount to a lot regardless of any warranty.

The bottom line is you will be losing money on a luxury where a used $5000 car could take you from A to B just as fine and often cost less in maintenance and repairs than new cars that don't come with the kinks worked out. If you make a lot and can afford the expense, have it at. But if you want to grow your capital, it's really not a wise choice.
Click to expand...

This is the truth. worst thing I ever did was take out a loan to buy my truck. I could have saved and bought one just ass good that would have lasted just as long and would have paid a fraction of the price for it when its all said and done.

I will have paid more than 30K on my truck before I ever own it. more than double the sticker.
 
Save up and buy from a private seller. I love not having a payment hanging over my head. Bought my Harley and my F150 from craigslist and I couldn't be happier!
 
Indeed. There are a lot of people who take good care of their cars and those cars usually make excellent used cars. Just bring somebody who knows about mechanical stuff and cars with you to give it a through checking out before buying.
 
the ONLY benefit to going new is the assurance of 100% knowing the condition of the car. here, in aus there are services to check the VIN number of each car for insurance claim history, and there are also people who can do a vehicle check prior to sale, both of which mitigate that concern.

new cars are just money burning for a lazy approach.

good luck, dude :)
 
im just gona add that a lease is always a viable option, depending on your credit. my friend leased a new civic for $250/month for 3yrs. she can drive 18,000 miles/year, anything over is .15 cents/mile, any repairs under $1500 are covered by the dealership as well as oil changes and tire rotations, at the end of the three years you can choose to buy the car for cheaper, and making the payments for all those months wouldve given you better credit
 
<-- I got a 00 Nissan Maxima for 5k with only 88k miles on it. Id suggest finding a nice old lady whos buying a new car like I did. You will almost never get a good deal at a dealership
 
If you are paying cash at a dealership your credit shouldn't really matter. Some people get gouged at the dealer and will tell you never to go there. Others who know the game don't and walk out with a great, reasonably priced car that has a warranty and a service package. Overaged units, end of the month sales numbers, mini deals, incentives, etc. Work with your salesperson, not against them.

Remember, allot of the used cars on the lot are trade ins which means the dealer most likely got the vehicle for far far far less than what it is worth. Also, the rest of them came from the auction so again, bought for far far less than they are worth. Armed with this knowledge and a little more research (a convo with someone in the car sales business who isn't trying to sell you anything would be awesome), flexibility in what you want, and the willingness to walk away will go very far towards a rewarding experience at a dealership. Or should I say reputable dealership...

Anyways, good luck.
 
Well, I just got a new car; though I had to have a co-signer for it, it turned out that my credit was better than my own bank had led me to believe. Though I have a note, it's nothing I can't handle if I keep my head on straight and put the pedal to the metal, so to speak. ;)

Once again, thank you all for your advice and time. :)
 
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