My debt is completely paid off, now its a matter of saving up 7-10k for a down payment. The way things are going, it shouldn't be long. Now my question to you all is this. From all the reseach i've been doing, it seems that people get better interest rates on loans when they go outside the dealer. Whether it be through a credit union or a local bank.

Whatever the case maybe, i need some advice on this. Obviously, any attempt at a loan is going to require a credit check, and i'm not concerned with that. I have good credit and its only going to get better while i'm saving for the down payment because i have no more outstanding credit card debt. What i'm concerned with is various lenders constantly pulling my credit in order for me to find the best rate. It does not look good when your credit is constantly checked and it does effect your score.

Some things to keep in mind that may affect me from getting approved for a low interest rate.

My age: I'm young, only 24 so my history of credit isnt all that long. I've only had a few credit cards growing up and my maximum limit is about 10k.

My Job: i make great money, but its comission baised. not sure if this will be an issue.

I'll do what i can to make it work. If i dont get approved, i'll ask the lend how big of a down payment i'll need in order to get approved and i'll save that amount. Regardless, even though i'm only 24, if i have 10k for a downpayment i dont see why i should have a problem.

I've never been late on a payment for anything in my entire life, it's just that my limits were never high, so lenders are apprehensive about giving someone my age a 30-40k car loan.

Any advice would be appreciated. Btw, please keep the "you're to young" or "it sounds like you can't afford it" comments to yourselves. Thanks.

 

First of all if you have good credit then you have no problems... Do you know your score???? When you are serious about making the walk across the water Know that when you are shopping for anything and your credit gets pulled it will take a hit but it can be pulled mulitple times and they will see you are rate shopping and it will not affect your score each time just do it within a two week period.... First 3-4 days is best.... If you have a credit score above 680 you will usally be in good hands. 700 and above not many questions asked... But check the internet and you can get a good feel on interest rates and it would be your best bet to use your bank that you use now...... Some Dealers can make money off the interest rate..... Every vehicle I have is through GMAC except they wanted higher interest on the C6 back in July and I got local bank to fiance for 5.50%... I didn't even have an account with them either.... Do as you would a house, shop around ask questions the more you know and they know you know the less chance of getting the big winnie... Remember if you just paid off your cards it will sometimes take them 2 months before it will actually change your score...... Keep that in mind as well.... Know what is in your credit report and you know you can do that on line as well... get the 3 credit report... with the FICO score... Hope this helps and good luck...

 

Everything above sounds like good advice. Once you find out your credit score, start calling around for best rates. It dosen't mean apply for a loan at each place. Just ask what is your best rate/terms that you want for a high credit scorer. I did just that and most only said your score had to be 680 or above.
When you feel you're about ready to buy, you'll know where to apply for the best rate but getting approved is the final word. Rates can change quickly, so check back with your list of winners close to purchase time. You can get a pre qualify letter to go shopping with and see if the dealer can beat it. Many credit union's websites have online cauclators to see how much you can afford.

 

I’m only 23 years old and this is my second corvette. All you need is 10% down. I went with the GM SmartBuy option. It’s a 4 year loan with a balloon payment at the end. Choosing this option makes your monthly payments lower than traditional financing methods. Anyway its just an idea, it worked out good for me. Check it out at:

http://www.gmacfs.com/us/en/objects/...g_You_Need.pdf

Good Luck!

 

DO NOT APPLY for a loan at each, just call around for the best rates. Inquiries will make your score go down.
here's rates from on of our local credit unions; (that anyone can join ) and will finance up to 100% of purchase price (of course, with approved credit)
From www.redfcu.org
New/Used Automobiles and Trucks
Effective April 2006


Type of Loan Min/Max Amount
Financed Fixed Rate APR
Rates As Low As..*
New Models **Up to 100% of Purchase Price 6.50 %
Used 1999 - 2006 Models **100% of NADA Retail 6.50 %
1998 - Antique Models 65% of CPI average value or NADA Older Used Car Guide Retail 6.50 %


* Rates for this Product are determined by an evaluation of applicant credit. Your actual rate may vary from the rate shown. Internal RFCU refinances are excluded.
**100% financing on New/Used Automobiles; Trucks are limited to a maximum of $70,000.00. Financing over $70,000.00 is limited to 80% of purchase price or book value whichever is less.

 

Here is the only place you need to go:

http://www.bankrate.com/brm/rate/auto_home.asp

Shop rates from the comfort of your home. My dealer told me what a good deal they were getting for me; I told him that's okay, I could get it a percentage point lower elsewhere. I told him where I was looking, and they dropped their offer below my Bankrate number.

Don't sweat the effect credit checks have on your credit score, and open your mind to internet banking. Like a lot of other things, banks don't have to be brick and mortar anymore. Good luck!

 

guys thanks for the advice!

i'll wait untill i have that 7-10k in my pocket before i pull my credit to check my score. then i'll start inquiring at that point. By the time i have the 10k saved up, my credit should have gotten better from the cards being paid off.

thanks agian guys.

 

If it was me, I would pull the report now just in case you have something on there that should not be.... Example I traded a car off and bought a new truck back in 97. I had no idea that the fiance company on the car showed that it was a write-off... WRONG I was charged for a write off which is BAD and it was on my credit report for over 3 years before I got CREDIT WISE and pulled my own report.... I called the finance company and they quickly corrected the mistake but think about if I had been more aware I would have saved some big bucks in interest if that was not on there... You say you have good credit but be wise and pull your report and investigate now.... Just in case you have a discrepancy. Experian does a 3 credit report and they will keep you informed when rates hit your target point, also they will inform you if your credit gets pulled.... Remember if you did not authorize the pull it will not be charged off to you... Credit card companies will pull your report every so often to make sure you are doing ok. If you do have a discrepancy you can dispute it on-line and if the problem is not solved within 30 days they have to take it off the report. There they will also tell you that you can have your credit report pulled multiple times but if it is concering the same type of purchase it will only hit your score once..... 5 years ago I thought like you did, I have good credit little did I know it was crap... 620's and one score was even at 580... I took charge and corrected errors, disputed the and now I am over 750 today.... Do not go to a credit repair company cause they will only do exactly what you can do... If you made a late payment they can't do crap for you.... You can only get things taken off if it was incorrect.... They do not carry a magic wand, but you do if you just check it out.... Take charge....

 

You should be ok. I just turned 24 when I got my loan. My credit is very good, but the history is short. I had never financed a car either. Because of this, GMAC wouldn't touch me, but my dealer found a credit union to finance at 4.99% as long as I put at least 10k down. I planned on putting more than that down anyway so I was good to go.

 

24 here. Got a loan on the 'vette. All I had to come up with was the cash to cover Tax, title and license. EXPERIAN was 684.

 

As far as your credit getting better because you have no debt. I'm not sure it does you much good. Better, probably, to use your credit cards and pay off the balance each month. That way they see continuing good payoff history. Get a credit card that does a rebate, like GM and save a bit more...

 

“From all the reseach i've been doing, it seems that people get better interest rates on loans when they go outside the dealer. Whether it be through a credit union or a local bank.”
That’s a generalization, however, for the most part, I believe that to be the case.

”What i'm concerned with is various lenders constantly pulling my credit in order for me to find the best rate. It does not look good when your credit is constantly checked and it does effect your score.”
I would not go to every lender in town and I would suggest waiting until you are actually ready to purchase. Also, I would recommend applying at the bank or credit union were you have already established a savings account.

”My Job: i make great money, but its comission baised. not sure if this will be an issue.”
Do not volunteer any information other then truthfully answering the questions you are asked! More then likely the lender will only ask for the name of your employer and the amount of your gross income; not if it’s commissioned based or not. If they don't ask....don't tell!

“I've never been late on a payment for anything in my entire life, it's just that my limits were never high, so lenders are apprehensive about giving someone my age a 30-40k car loan.”
Not necessarily, I think that you are confusing an “Unsecured Loan” (credit card) with a “Secured Loan” (in this case, an automobile loan)

Save the Wave.

Jim

 

I agree with the above statement. Check your own credit now just incase something is there that shouldnt be. You can check it at truecredit.com. You can also dispute and discrepancies online now at all three agencies. It will cost you about $45 bucks or so if you do the 3 in 1 report with scores. I even signed up for the $9.99 a month deal which lets you pull a fresh report as many times as you want.
You can check your own credit an infinite amount of times with no affect on your score. If someone else checks it, I believe that every 2 or three inquiries will drop your score by 2 or 3 points. They drop off after 2 years.

Anyway, you are too young to be buying a vette! Just kidding! Enjoy!

 

Do not forget that dealers "sell loans".

They make money on writing the deals. And they want to make money off of you.

It's very important that you know your credit score and what YOU can get as an interest rate with YOUR score.

As was said earlier, DO NOT apply for a bunch of loans - that LOWERS your score.

You want to know "What interest rate can I get with a credit score of XXXX?"

Also, when 'pricing' loans it's the interest rate and NUMBER OF MONTHS' for the loan.

DO NOT tell a dealer that you can afford to buy a car for $500 per month. A 6% loan for 60 months is a lot cheaper than a 6% loan for 84 months!!!!!! Although the 84 month loan has a lower monthly payment - you'll have to make MORE payments.

You know the dealer cost for the car from Edmunds, ect - know the dealer cost of getting you a loan (the best rate from a bank or credit union for your credit score).

After you've picked out your car the question should be "What is the best interest rate that can you, Dealer, can do for me for a 60 month (or whatever) loan.

You should invest in a cheap financial calc and learn how to use it. You need to know 3 numbers of the 4 numbers that make up a loan - Amt of loan (how much you need to borrow after all the little things like tax, lic, Doc fees) are added up less your trade in / downpayment. Next the interest Rate and the number of months. Those 3 numbers are used to calc the monthly payment.

Punch those in and you'll get your monthly payment. It may be about $1.00 or so off what the dealership finance man actually puts down on a loan document as it depends what day of the month the interest is calculated - don't worry 'bout it if it's just pennies off of what your financial calc told you.

Or if you are a monthly (again don't tell the saleman that) payment buyer (I can pay $500 / month) the calc will tell you how much you can borrow at any given interest rate and number of months of the loan.

Be smart - it's your money.

They don't build those fancy, bright and shinny dealerships 'cause they're losing money!!!!!!!

 

"They don't build those fancy, bright and shinny dealerships 'cause they're losing money!!!!!!!"


gm is losing billions!!!

 

If GM went back to building and selling cars,they'd make money. Now that they are a *social program* they are losing money. One activity cannot support the other. (Thanks UAW.)

 

 

Search online for best interest rates. bankrate.com is a good source and you can apply with them. Once you get a best rate, then when you go to do the dealership, tell them they have to beat that rate by .5%. I've seen dealers beat the best rate in town, because they want you to finance with them! Be ready to produce in writing the best rate offer you have, and 50/50 shot the dealer will beat it.

 

Prior to the loan you might check out the following website which allows every US citizen to check their credit reports from the major three reporting agencies once per year for free. Check for any incorrect information, and work to correct it with the credit agency. Allow perhaps a month or two for this process to allow resolution of any issues should incorrect or inaccurate information be found.

https://www.annualcreditreport.com/cra/index

 

ok thanks for the advice guys. i guess i'll pull my credit now. However, should i pull it again prior to going to the dealership when i'm ready to buy? Between now and then(2months or so) my score could change for the better since the positive effects of having no outstanding credit card debt may take a few months before appearing as a score increase on my credit report.

I just paid off the last of my credit card debt last week, so my guess is that it probably hasnt even appeared yet.