Any advice on a car loan

[Carlawarla 1]

I personally would never even think of buying from a car dealership.

Okay. Sorry, this comment makes little to no sense.

Any ways, trying one of those car dealerships that offers high interest loans is probably your best bet. It will probably be 12-18% though which would be a lot.

It would make perfect sense if you read the entire blurb and didn't simply consider one part of it out of context.

You can pay 12-18% interest on an overpriced car, or you can pay 0% interest and get a much better deal by buying from a private party. Your choice.

Which is all well and fine if you have the money to buy a car from someone from craigslist. This is a couple that doesn't have the money to buy a car without a loan. So going to someone from craigslist and saying I want to buy a car from you but can you finance is not helpful.

Back to the OP...my son unfortunately got into some credit card problem that resulted in his having a lousy credit score. He couldn't get a loan from the bank. He had to go through the dealer, but got a really good deal on a used car, a 2007, and had to go through their finance dept. It is costing him 15% interest at this time, however it's been a year so far and he's always up to date on his payments and he called his bank back who told him they would refinance him a loan for the car after 18 months of keeping up with the payments from the dealer, and at a very good rate. He just had to prove that he was a good risk again before they'd lend him the money.

[scandal 951]

Maybe a used car, but I'm assuming you'd buy a NEW car from a dealership.

Your words were, "I personally would never even think of buying from a car dealership." You didn't specify.

And, if you are buying from a private party, I'm assuming you are purchasing the car outright. What if you don't have 3 or 4 grand to do so? No one is going to give you a loan at 0%. Some dealerships were doing that a few years ago but not any time soon.

Correct, this is for a used car, which I specified when I said

find a nice lightly used (or heavily used, if you want) car

After I said I would never buy a car from a dealership, I then talked about buying one from a private party and said

You'll likely get a better deal this way

Also correct, when buying from a private party, you purchase one outright. However, due to the fact that there are no overhead costs, buying from a private party is a better deal. Of course, if you need a car now, don't have a few grand on-hand, and are unable to continue to repair your current car until you have enough saved to go the private party route, then I guess buying from a dealership is an option. If you own a home, another option would be to borrow against your house and use that money to buy from a private party. You will likely get a better interest rate that way.

In summary, my advice is: explore all your options before financing through a car dealership.

Ray, I bought a new car in July (from a dealer, obviously, duh )

I've bought used cars at dealers too. Why?

Because price isn't always everything. Of course the dealer has a mark up - they have to, to cover their costs.

But you get something for that extra price. Selection, service, and most of all warranty.

Buy a used car from craigslist or the newspaper, and you don't know what you're getting. Sure, you can have it inspected before purchase, but you still are on your own if the trannie goes out 3 months later.

Buy a certified car from a dealer and you typically get a powertrain warranty for a reasonable period of time (e.g. 6 months).

[Krikit 1,165]

Another GREAT link besides Credit Info Center (I'm a member there too) is CreditBoards.

Ooh, another great link! Awesome. Thanks J&K!

I totally agree with what Scandal says. And Carla makes a good point about proving yourself as a good risk and then refinancing. Make sure you read the fine print, also. There may be stuff in there which can trip you up.

[rsn 135]

Maybe a used car, but I'm assuming you'd buy a NEW car from a dealership.

Your words were, "I personally would never even think of buying from a car dealership." You didn't specify.

And, if you are buying from a private party, I'm assuming you are purchasing the car outright. What if you don't have 3 or 4 grand to do so? No one is going to give you a loan at 0%. Some dealerships were doing that a few years ago but not any time soon.

Correct, this is for a used car, which I specified when I said

find a nice lightly used (or heavily used, if you want) car

After I said I would never buy a car from a dealership, I then talked about buying one from a private party and said

You'll likely get a better deal this way

Also correct, when buying from a private party, you purchase one outright. However, due to the fact that there are no overhead costs, buying from a private party is a better deal. Of course, if you need a car now, don't have a few grand on-hand, and are unable to continue to repair your current car until you have enough saved to go the private party route, then I guess buying from a dealership is an option. If you own a home, another option would be to borrow against your house and use that money to buy from a private party. You will likely get a better interest rate that way.

In summary, my advice is: explore all your options before financing through a car dealership.

Ray, I bought a new car in July (from a dealer, obviously, duh )

I've bought used cars at dealers too. Why?

Because price isn't always everything. Of course the dealer has a mark up - they have to, to cover their costs.

But you get something for that extra price. Selection, service, and most of all warranty.

Buy a used car from craigslist or the newspaper, and you don't know what you're getting. Sure, you can have it inspected before purchase, but you still are on your own if the trannie goes out 3 months later.

Buy a certified car from a dealer and you typically get a powertrain warranty for a reasonable period of time (e.g. 6 months).

Oh no! It's Ron! How goes it man?

I can buy a warranty from a 3rd party. I did this for a recent purchase myself. Of course you will want to check out the warranty organization first, but this is also true if you get the warranty directly from the car dealer (what happens if they or the associated warranty company go out of business? etc). 3rd party warranties allow you to buy as much or as little coverage as you want (at least mine does) at a seemingly reasonable price.

I could also argue that you may not know what you're getting from a dealer. If they say X, Y might actually be true. Who knows? In either case, getting a carfax report is a good idea. Just me being paranoid, but I'd want an independent mechanic to inspect the car as well (not one of the dealer's mechanics).

Some of this advice comes from the fact that I've been burned by dealers before, and some in Madison are particularly sleazy (with the exception of one).

[scandal 951]

Maybe a used car, but I'm assuming you'd buy a NEW car from a dealership.

Your words were, "I personally would never even think of buying from a car dealership." You didn't specify.

And, if you are buying from a private party, I'm assuming you are purchasing the car outright. What if you don't have 3 or 4 grand to do so? No one is going to give you a loan at 0%. Some dealerships were doing that a few years ago but not any time soon.

Correct, this is for a used car, which I specified when I said

find a nice lightly used (or heavily used, if you want) car

After I said I would never buy a car from a dealership, I then talked about buying one from a private party and said

You'll likely get a better deal this way

Also correct, when buying from a private party, you purchase one outright. However, due to the fact that there are no overhead costs, buying from a private party is a better deal. Of course, if you need a car now, don't have a few grand on-hand, and are unable to continue to repair your current car until you have enough saved to go the private party route, then I guess buying from a dealership is an option. If you own a home, another option would be to borrow against your house and use that money to buy from a private party. You will likely get a better interest rate that way.

In summary, my advice is: explore all your options before financing through a car dealership.

Ray, I bought a new car in July (from a dealer, obviously, duh )

I've bought used cars at dealers too. Why?

Because price isn't always everything. Of course the dealer has a mark up - they have to, to cover their costs.

But you get something for that extra price. Selection, service, and most of all warranty.

Buy a used car from craigslist or the newspaper, and you don't know what you're getting. Sure, you can have it inspected before purchase, but you still are on your own if the trannie goes out 3 months later.

Buy a certified car from a dealer and you typically get a powertrain warranty for a reasonable period of time (e.g. 6 months).

Oh no! It's Ron! How goes it man?

I can buy a warranty from a 3rd party. I did this for a recent purchase myself. Of course you will want to check out the warranty organization first, but this is also true if you get the warranty directly from the car dealer (what happens if they or the associated warranty company go out of business? etc). 3rd party warranties allow you to buy as much or as little coverage as you want (at least mine does) at a seemingly reasonable price.

I could also argue that you may not know what you're getting from a dealer. If they say X, Y might actually be true. Who knows? In either case, getting a carfax report is a good idea. Just me being paranoid, but I'd want an independent mechanic to inspect the car as well (not one of the dealer's mechanics).

Some of this advice comes from the fact that I've been burned by dealers before, and some in Madison are particularly sleazy (with the exception of one).

I'm fine Ray! (mmm... you should check out your 'history of VJ' thread... I think I may have slandered your reputation there )

I totally agree with you about carfax. Definitely a worthwhile investment, particularly to do a title search, and see the previous ownership history of the car.

I also agree with you that an independent mechanical inspection is a very good idea (not that I've always done so, but it is prudent).

Dealers are not always ethical, but at least you know where to find them! (Unless they've been shut down as part of the imploding auto industry ) They've usually been in business for decades and are members of Better Business Bureau.

Private parties --- may or may not be around later if you have a complaint. Just sayin'.

[thetreble 19]

I could also argue that you may not know what you're getting from a dealer. If they say X, Y might actually be true. Who knows? In either case, getting a carfax report is a good idea. Just me being paranoid, but I'd want an independent mechanic to inspect the car as well (not one of the dealer's mechanics).

I actually think it's the opposite. My husband I sold a 1999 Toyota Tacoma with quite a few thousand miles on it. Over 100 I think.

The entire electric board was obviously out on it since the turn signals and break lights didn't work. It wasn't just that we needed to replace them either. I mean it ran okay but there was rust on the hood and it had been rear-ended a few years ago. Nothing major though.

Any ways, someone bought it for $2,500.00 when it was a complete junker. They didn't even ask any questions about it!

[Misty1979 0]

As for the question about my husband getting a loan, that is a negative. Him and his ex wife made some poor financial decisions a few years ago, and bit off more than they could chew in a few areas, so we've been slowly trying to build his credit back up ever since. Haven't made much headway yet though, since we only just recently started making decent money. This is really just an odd position for me. I had really good credit in Canada, and always had stashes of savings for things like this.

Carla was definitely right about us not being able to get a car from Craigslist. I'm just started establishing a savings fund for things like this, so I really don't have any upfront funds.

I'm guessing we'll try a bunch of different dealerships this weekend and try to get financed through someone....anyone for now, then work on getting it refinanced in the future.

Edited August 27, 2009 by Misty1979

[Krikit 1,165]

Misty, if you had good credit in Canada, get the dealership to pull that report. Nissan America called Nissan Canada and had them pull mine. The sales manager said it was easy.

[Hugglebuggles 60]

Just to counter some of the statements made I would never buy a car from anything but a referable dealership! A car is something you don't want to take a chance on. After buying a used car from a family friend a couple years back, I discovered a million things wrong with it that were never disclosed, and I ended up paying double the value of the car just to have the repairs made. What can you do in that situation? Absolutely nothing. My husbands family owns an auto specialties business where they sale reconditioned batteries and other related products, and I have learned a lot about the auto industry from them these past couple months. A positive of my situation is that they deal business with the majority of car dealerships in the Denver metro, so when its time for me to seriously consider a car purchase (and I have been looking) I tend to get the honest answer. I don't care if I end up paying an extra grand or two or three, I would never buy a car without an offered warranty from the seller, and I would never buy a car from an organization that doesn't have a long and positive history with its customers. Just my two cents.

Misty, given the poor economy there are a lot of smaller used car dealerships in this area that are offering guaranteed approvals. Of course, the worse your credit is the higher interest you're going to pay, like with any major purchase you make. If you've been going to larger places they tend to be a little harsher with their credit requirements (not always but usually), and for some reason I'm hearing a lot of weird things about car lots that sell American branded cars vs. import car lots. The import lots have been selling a lot more, I mean a lot, and part of that is because a lot of them have been a little softer in their credit requirements. This may not be as true in your area, but its just some things I've been noticing here in Colorado at least.

You never know until you try! Bill and I were approved for an apartment last month after applying jointly and with me having absolutely no credit. We decided not to take it after they raised all the move-in costs and some other things, but I was amazed they'd approve someone with absolutely no credit! Who knows.

[JillA 2]

Misty, if you had good credit in Canada, get the dealership to pull that report. Nissan America called Nissan Canada and had them pull mine. The sales manager said it was easy.

Oh that's a good tip, I didn't know that. At least our good Canadian credit can come in handy somewhere!