How long should I wait

littlejuanito · 03-10-2006, 03:52 PM

Let me the first one to post in the "Buying a car after BK thread".
How long after establishing some credit should I ask a credit union for a car loan?

poorme · 03-11-2006, 08:59 AM

Hey! I'll be the first reply....probably until you reeaaalllyyy need a car! We have to do what we have to do.

13inOR · 03-11-2006, 10:50 AM

If your current car can last a while longer, I would suggest trying to save the amount that you would be paying for a car payment each month so you have a good down payment when you absolutely have to make the purchase. By having a large down payment, even if your interest is a little higher than you would like, you are less apt to be upside down in equity and more able to be able to refinance for a lower rate in 6-12 months. Plus, a larger down payment equals lower interest rate to begin with.

SinkingFast · 03-15-2006, 07:42 AM

Good advice from 13inOR.

Plus, a larger downpayment will help prevent you from going "upside down" on the loan.

Higher interest rates amortize pricipal much more slowly than lower interest rates.

Any car loan, the first year or so of payments will be almost 100% interest. So if you take on a high rate of interest loan, you'll be paying tons in interest up front and accruing next to nothing on the principal. In a very short period of time, with vehicle value depreciation, you could easily be "upside down" on your high rate loan.

littlejuanito · 03-15-2006, 08:05 AM

Quote:

Originally Posted by 13inOR

If your current car can last a while longer, I would suggest trying to save the amount that you would be paying for a car payment each month so you have a good down payment when you absolutely have to make the purchase. By having a large down payment, even if your interest is a little higher than you would like, you are less apt to be upside down in equity and more able to be able to refinance for a lower rate in 6-12 months. Plus, a larger down payment equals lower interest rate to begin with.

I agree with you too. That's why I'm trying to save at least 1/3 to 1/2 for the down payment and maybe have a 24 month loan. I'm looking to get a car under $10,000. BTW, if I put down about 40%-50% on the value of the car, will I that definetively approve me for finance?

SinkingFast · 03-15-2006, 10:35 AM

Larger downpayment typically translates to loan approval for people with decent or even borderline credit. People with a recent BK could be a whole different story.

Check in the Search Function. There's a list somewhere of BK Friendly lenders.

I remember a thread recently that said Ford Credit is BK Friendly. And there are some on-line lenders that are BK Friendly as well.

Don't just go around wholesale applying for loans. Each inquiry is a hit on your Credit Report and dings your overall rating every time.

Just tip,.......... Stay away from the "Buy Here, Pay Here" kinds of car dealers. Most of their cars are crap and the prices are set so that if you default they've made their money already off your down payment.

Jenny · 03-15-2006, 01:12 PM

If you're able to save up for a large down payment, stay away from dealer financing. Even for the most credit-worthy people, the terms are usually not as good as can be found at traditional lenders. Multiple inquiries for the same type of request (getting a car loan) shouldn't hurt your score too much since I believe they're counted as one if done in a short period of time. If you have an account at a bank in good standing, that would be the best place to start. If you don't, talk to the lender about setting up multiple services with them such as a checking account with direct deposit and / or a savings account.

SinkingFast · 03-16-2006, 06:34 PM

Quote:

Originally Posted by Jenny

If you're able to save up for a large down payment, stay away from dealer financing. Even for the most credit-worthy people, the terms are usually not as good as can be found at traditional lenders. Multiple inquiries for the same type of request (getting a car loan) shouldn't hurt your score too much since I believe they're counted as one if done in a short period of time. If you have an account at a bank in good standing, that would be the best place to start. If you don't, talk to the lender about setting up multiple services with them such as a checking account with direct deposit and / or a savings account.

We've had quite the opposite experience.

We bought several cars from the same dealer where we moved from. We lived there nearly 14 years. The dealer always gave us better terms than the local bank could. We got dealer incentives, dealer cash, better rates, you name it. That Dealership and the "Big 3" Financial behind it always treated us very well.

NASCAR20FAN · 03-25-2006, 06:35 PM

Mine was just filed... Already I've recieved letters from a car dealer and a car loan company saying I can get loans through them...

03-10-2006, 03:52 PM	#1
littlejuanito Registered User B/F Newbie Join Date: Feb 2006 Posts: 41	How long should I wait Let me the first one to post in the "Buying a car after BK thread". How long after establishing some credit should I ask a credit union for a car loan?

03-25-2006, 06:35 PM	#9
NASCAR20FAN Registered User B/F Contributor Join Date: Mar 2006 Location: Pittsburgh, PA Posts: 452	Mine was just filed... Already I've recieved letters from a car dealer and a car loan company saying I can get loans through them...
	My credit scores: Before Filing: Tr 496, Ex 496, Eq 507 Today: Tr 618 (+122), Ex 601 (+105), Eq 623 (+116)

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03-11-2006, 08:59 AM	#2
poorme Registered User B/F Contributor Join Date: Jan 2006 Location: Kentucky Posts: 394	Hey! I'll be the first reply....probably until you reeaaalllyyy need a car! We have to do what we have to do.

03-11-2006, 10:50 AM	#3
13inOR Registered User B/F Contributor Join Date: Jan 2006 Posts: 457	If your current car can last a while longer, I would suggest trying to save the amount that you would be paying for a car payment each month so you have a good down payment when you absolutely have to make the purchase. By having a large down payment, even if your interest is a little higher than you would like, you are less apt to be upside down in equity and more able to be able to refinance for a lower rate in 6-12 months. Plus, a larger down payment equals lower interest rate to begin with.

03-15-2006, 07:42 AM	#4
SinkingFast Registered User B/F Guru Join Date: Jan 2006 Posts: 6,857	Good advice from 13inOR. Plus, a larger downpayment will help prevent you from going "upside down" on the loan. Higher interest rates amortize pricipal much more slowly than lower interest rates. Any car loan, the first year or so of payments will be almost 100% interest. So if you take on a high rate of interest loan, you'll be paying tons in interest up front and accruing next to nothing on the principal. In a very short period of time, with vehicle value depreciation, you could easily be "upside down" on your high rate loan.

03-15-2006, 10:35 AM	#6
SinkingFast Registered User B/F Guru Join Date: Jan 2006 Posts: 6,857	Larger downpayment typically translates to loan approval for people with decent or even borderline credit. People with a recent BK could be a whole different story. Check in the Search Function. There's a list somewhere of BK Friendly lenders. I remember a thread recently that said Ford Credit is BK Friendly. And there are some on-line lenders that are BK Friendly as well. Don't just go around wholesale applying for loans. Each inquiry is a hit on your Credit Report and dings your overall rating every time. Just tip,.......... Stay away from the "Buy Here, Pay Here" kinds of car dealers. Most of their cars are crap and the prices are set so that if you default they've made their money already off your down payment.

03-15-2006, 01:12 PM	#7
Jenny Registered User B/F Newbie Join Date: Jan 2006 Posts: 129	If you're able to save up for a large down payment, stay away from dealer financing. Even for the most credit-worthy people, the terms are usually not as good as can be found at traditional lenders. Multiple inquiries for the same type of request (getting a car loan) shouldn't hurt your score too much since I believe they're counted as one if done in a short period of time. If you have an account at a bank in good standing, that would be the best place to start. If you don't, talk to the lender about setting up multiple services with them such as a checking account with direct deposit and / or a savings account.