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Started By
Message
Buying a car. Loan question
Posted on 4/3/15 at 7:58 am
Posted on 4/3/15 at 7:58 am
I'll keep it short, but basically my commute is 1.5 hours in the car everyday (round trip), the gas mileage in my car sucks, and it's getting older and I'm scared it's going to start having some costly issues now that it's about to hit 100k miles, so I'm trading it in for a more fuel efficient option to save money at the pump.
I've got an offer of $7K for my car and I have $2K saved up to go towards a new car. The one I want costs $11K and I was wondering where y'all think the best place for me to get a $2K loan to cover the rest/build credit in an easy way (24 years old, fresh out of college, I have zero credit history. No college debt or student loans.) I could pay it off very fast.. I have the cash flow, just need the money now and don't want to pay penalties for paying principle early.
TIA
I've got an offer of $7K for my car and I have $2K saved up to go towards a new car. The one I want costs $11K and I was wondering where y'all think the best place for me to get a $2K loan to cover the rest/build credit in an easy way (24 years old, fresh out of college, I have zero credit history. No college debt or student loans.) I could pay it off very fast.. I have the cash flow, just need the money now and don't want to pay penalties for paying principle early.
TIA
This post was edited on 4/3/15 at 8:06 am
9
Posted on 4/3/15 at 8:01 am to olemissfan26
How long would it take you to save 2k?
Posted on 4/3/15 at 8:01 am to olemissfan26
Credit Union or Bank.
Credit Union will likey offer better rate, but some have restrictions on first time car loans. If the rate is reasonable, and that dumps your savings, take out a little bigger loan and keep some savings for backup. As it rebuilds, pay down the car note.
Just make sure to pay it on time.
Credit Union will likey offer better rate, but some have restrictions on first time car loans. If the rate is reasonable, and that dumps your savings, take out a little bigger loan and keep some savings for backup. As it rebuilds, pay down the car note.
Just make sure to pay it on time.
Posted on 4/3/15 at 8:03 am to Sigma
Long enough for something on my car to mess up 
In all seriousness, probably 6-7 months
ETA: one reason I want to do this is to build credit history
In all seriousness, probably 6-7 months
ETA: one reason I want to do this is to build credit history
This post was edited on 4/3/15 at 8:06 am
Posted on 4/3/15 at 8:11 am to olemissfan26
Posted on 4/3/15 at 8:16 am to olemissfan26
What type of car are you buying?
I am in the same situation and got a Sonata but I'd look at Hyundai Elantra. Great car, great gas mileage and mega warranty for around 15k
I am in the same situation and got a Sonata but I'd look at Hyundai Elantra. Great car, great gas mileage and mega warranty for around 15k
Posted on 4/3/15 at 8:23 am to GenesChin
Jetta TDI
Current car gets 19 city/ 24 highway and takes premium gas
Current car gets 19 city/ 24 highway and takes premium gas
Posted on 4/3/15 at 8:58 am to olemissfan26
A couple of things. First, the $11k, car is going to have TT&L which is going to cost you an extra $1k or so unless you've alrady factored that in.
2nd, for a small loan like that, I wouldn't worry about the interest rate too much. The additional interest for an extra percent is almost insignificant. I would seek a place you can establish a longer term relationship for future needs.
My .02
2nd, for a small loan like that, I wouldn't worry about the interest rate too much. The additional interest for an extra percent is almost insignificant. I would seek a place you can establish a longer term relationship for future needs.
My .02
Posted on 4/3/15 at 10:22 am to olemissfan26
Credit union if there is one you qualify to join.
Posted on 4/6/15 at 10:32 pm to olemissfan26
Forget the $2,000 why not find a decent brand/model ( Honda, Toyota ) that you can pay cash for? If you really want to build credit find a $300 limit credit card, don't max out and pay on time to build history. ... Think about this for your car. Unless your tranny goes bad or something like that, your repairs should be minimal. ... FYI my 2004 Honda pilot recently cracked 193k miles. Just routine maintenance as far as money into it.
Posted on 4/6/15 at 10:39 pm to olemissfan26
There is nothing wrong with your current car. No offense but it doesnt sound like you have the extra cash to be spending on a new vehicle. If your current car is paid off, drive it until the wheels fall off. Use the money spent on buying a new car toward building a nice emergency fund.
Posted on 4/7/15 at 12:55 am to PrettyLights
As a sales person at All Star, I think just buying a car from a dealer is best way to build credit, and since your planning to put so much down, interest would be small since risk would be small. But another idea is to lease and pay out the lease with your $9k, or close to pay off your lease to have a super small note. My .02
Posted on 4/7/15 at 9:53 am to CoachRobertson
If you pay out the lease, you do not get the money back if the car gets totaled. Also, OP's mileage will be way more than allowed.
Posted on 4/7/15 at 9:57 am to olemissfan26
I wouldn't buy a used Volkswagen. They are cheaper than Audi's but just as costly to repair due to being German.
I love my gasoline 30 mpg Passat but I lease.
I love my gasoline 30 mpg Passat but I lease.
Posted on 4/7/15 at 10:23 am to Revorising
quote:
Unless your tranny goes bad or something like that, your repairs should be minimal
there are a lot more things that can screw up in a car than a tranny that would cost a nice chunk of change. A/C for one can be a bitch.
Also, having both credit cards and term debt in your credit history helps build your credit. A $2k loan on an $11K car should get him a really low interest rate (a 3% rate would be $60 in interest/year). He is going to be spending 1.5 hours in it everyday so he needs to get something he wants.
Posted on 4/7/15 at 10:37 am to Hermit Crab
You are in the small minority of people who should trade up to a newer car. That 1.5 hr commute means you need reliable, fuel efficient transportation. I love my VW TDI for long haul commuting--the 55-58 mpg in warmer weather means I don't fill up very often. Just know that oil changes on TDIs are not cheap, so budget for it.
I second the credit union idea. There are lots of open-participation community credit unions with great loan rates, although a certified pre-owned VW might qualify for preferential loan rates through VW that would beat the credit union's rates. You can get 0% APR right now on new Jettas, dunno what the CPO rates are like.
Good luck...
I second the credit union idea. There are lots of open-participation community credit unions with great loan rates, although a certified pre-owned VW might qualify for preferential loan rates through VW that would beat the credit union's rates. You can get 0% APR right now on new Jettas, dunno what the CPO rates are like.
Good luck...
Posted on 4/7/15 at 10:48 am to CoachRobertson
quote:
As a sales person at All Star, I think just buying a car from a dealer is best way to build credit, and since your planning to put so much down, interest would be small since risk would be small. But another idea is to lease and pay out the lease with your $9k, or close to pay off your lease to have a super small note. My .02
Customer stated he has 0 credit history. You cannot tell him his interest would be low without knowing the facts.
Posted on 4/7/15 at 10:50 am to CoachRobertson
quote:
But another idea is to lease and pay out the lease with your $9k, or close to pay off your lease to have a super small note
Posted on 4/7/15 at 11:13 am to Coach Guidry
Not to mention that no one commuting long distances should be leasing a car.
Posted on 4/7/15 at 11:25 am to olemissfan26
quote:
I'm scared it's going to start having some costly issues now that it's about to hit 100k miles
quote:
Jetta TDI
I don't think you're going for the best option here. I have a 2011 Jetta TDI, but the general consensus is that VW is are not the best option for high-mileage reliability and cost of maintenance. Since you said the car you wanted was ~$11k, I'm guessing you're looking at something with at least 65k miles and probably more (maybe upwards of 85k).
The TDI engine should have minimal issues for a long time (250k+) but if you're going automatic, I believe that issues with the DSG transmissions are not uncommon in the 100-150k range. Also, other issues (A/C, etc.) are not surprising in older VWs. Lastly, I know there are differing opinions on this strategy, but the regular, preventative maintenance schedule for TDI's is not cheap at all.
Coming from a Jetta TDI owner, if you are short on cash but want some increased fuel economy and decent value, I would look for something more along the lines of an Elantra, Corolla or Civic. None of them are fancy at all but the hwy mileage on recent models is pretty solid and the maintenance costs should be low for a long time.
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