Post # 1
I am trying to buy my first car and I have no idea where to start. I have no credit, my current car is not running and the down payment we could scrounge together would probably be around $500. My fiance has some credit and he would be my co-signer/co-owner and would be helping with the payments.
We found this used Kia Optima that we liked a lot at a dealership but I’m so nervous to go and speak with someone as Im not the ‘put my foot down’ type. I’ve also thought about talking to my bank about a car loan instead of going through the dealership… Can someone guide me here?
Post # 2
chrissybee: Go to the dealership and talk to a salesperson or submit a request for information on the car online and they will contact you. Tell them the situation, how much you can put down, if you’re willing to trade in your non-functional car (it may still have some value) and how much you can afford to pay per month (keep in mind that your car insurance may also go up). They will figure out if it’s doable with the finance managers. If they try to pressure you into something that you don’t want to do, stay firm. I wouldn’t bother with the banks, I’d go straight to the dealership.
FWIW, my husband is a car salesman, they’re just people.
Post # 3
My fiancé and I bought a car last year and I found getting the loan through the bank was loads easier. Plus a way better interest rate (like 2% instead of the 16% from the used dealer) plus you already know what you’ll be paying so there is a lot less stress. I would go look at cars but tell them you’re not buying that day and just looking to see what you like. Test drive it and make sure it’s what you want. Then I’d leave (don’t talk numbers) to your bank about what loans you can get and they will give you a loan confirmation before you go back to the dealership. When you go back you can still haggle the price. The bank can change the amount of the loan to match. It was just nice being able to just go in and be like “that one, here’s my money”
Post # 4
Things to consider include:
- Monthly payments
- Interest rates
- Length of loan
- Maintaneance plan
- Car insurance (Gap coverage & monthly payments)
For deciding on the car
- Gas mileage and type (regular vs premium vs plus fuel costs)
- Comfort and handling
- Quality of construction
- Average life of vehical
- Amenities (blue tooth, rear camera, auto locks, sunroof, rims vs hub caps)
What I do when car shopping is create a chart to keep track of the answers to these questions for each vehicle/dealership. Having comparisons can get you a better deal. No credit is better than bad credit, and buying a vehicle below what you can afford will give you wiggle room in negotiating.
PS- ask for the car fax if you’re purchasing a use vehicle. It’ll let you know if there was any extensive maintenance issues or history of accidents on the vehicle. Buying a vehicle with an extended warranty, or still under the original warranty is a bonus. buying used from the dealership usually comes as certified used, meaning it passed the manuafacturers check and has an additional warranty.
Post # 5
- Wedding: October 2016 - Wedgewood Las Vegas
I was in the market for a new (new to me) vehicle in 2010, when I was fresh from college and had no credit. I had MUCH better luck with financing options going through the dealership than I ever did with actual banks. I even tried several national banks, and the local credit union too.
Not all dealerships are high pressure. After looking around I ended up at a Ford dealership looking at their used vehicles. The salesman was low pressure, as he did not work on commision. Then when I found a vehicle, they did all the work to get me approved onsite. That day they worked out financing through Wells Fargo, which had previously turned me down when I walked in to the actual bank for a car loan.
There are even dealerships that deal solely with people who have poor or no credit too. That might be option too.
Post # 6
chrissybee: absolutely search around for financing before you go. Check credit unions too. They often have better interested rates (this likely would require that you open a new account with them to)
The sales person will focus on your monthly payment amount while yes that is important you want to focus on the life of the loan amount IE with interest. You want the lowest interest rate possible becuase you’ll then pay less long term. There are auto loan calculators online so play around with those to get a feel for what paying 8% interest looks like vs 13% those are just examples of interest rates. But I shot hight becuase you said your credit is poor. Dealers often offer awesome interest rates for great credit. You may be able to get 0% or 1% which obviously would be ideal.
I HIGHLY recommend looking online and work with larger car lots such as toyota/Honda rather than a small family name type car lot. If you go with a bigger company like Honda they will have an online fleet manager/Internet Sales manager. This is the best person to work with from home before you even step foot on the lot. He will care more about units sold per month IE move product asap and will be more likely to get you the best price vs a sales guy on site.
Do your research to know fair market value. True car.Com is great and Kelly blue book kbb.Com will give you pricing too so you have a leg to stand on when negotiating fair price.
Post # 7
While monthly payments are important, don’t forget the bottom line – the total cost of the car too. Dont let them fool you into a “lower” monthly payment with a rate and/or term where you end up paying way more than what the car is worth. I personally always (well, always as in the two times I’ve had to buy a car) start with what the car is worth and what I want to pay for the car. Then I break it down into it’s monthly payments based on the best loan I can get to see if it’s reasonable. If not, then the car cost too much.
Post # 8
Know your interest rate before you go so you can negotiate the price of the car, rather than payments, because if you say you can only afford $200 a month, they will figure out how to get you into a $40k car for $200 a month and you will regret it.
Post # 9
Trying getting rates from your local credit union and use them to compare what the dealership offers. The car will be used to secure the loan so you should be able to get a better rather without credit. It’s better to not have any credit than to have bad credit, so your fiance consigning may end up increasing the loan rate unless he has a very good credit. Don’t purchase a car that you can’t afford to payoff in 3 years. The longer the term, the lower the monthly payment, but the more you pay in interest. Make sure that you check out Kelly Blue book to assess the true value of the car.
Post # 10
We just have to get my husband a different car. We have bought cars before. What we always look for is the best value we can get for the money we are spending. So we tend to ignore features like bluetooth, premium sound, rear camera, color ect as they do not influence how the car runs.
Since cars depreciate in value very quickly we don’t buy neew cars. Cars that are even a few years old are a much better value. Low miles are important as they tend to have less wear and tear. Look for clean oil (although most dealerships do change the oil right away when the car comes in) and general cleaniness under the hood (oil grime everywhere could be caused by a leak). Get a loan for no more than 3-4 years to avoid paying more in interest.
Take any car you are interested in for a test drive, listen for weird sounds, shaking, inability to acceralate when you floor it (yes, we always do this on a deserted flat road when test driving). If you can, have a mechanic look at it. My dad’s a mechanic so he always goes with us when we look for cars. These are his tips.
Also, check with your insurance company as not all cars cost the same to insure.
Post # 11
pinkshoes: +1000! OP, focusing on monthly payments is how sales people get you to spend more money – some places now will let your stretch out a car loan over 5 or more years! I wouldn’t personally buy more than I could pay off in 3 years or less if I needed to finance again.
Post # 12
We just bought a new car and the interest rate we got through our bank was MUCH LOWER than the interest rate the dealership offered us so definitely don’t be afraid to look for outside financing. The dealership printed out a “credit report” to show us and it was total bullshit. Like 100 points less than SOs score when he checked it himself the same day. Both were FICO scores too (well the dealership claimed it was his fico score..). They said they checked with all the banks and the best they could was X% and when we checked ourself we were offered a rate so much lower it was crazy.
SO did a lot of the leg work cause i also have a hard time “putting my foot down”. Don’t be afraid to shop around. We went to two Mazda dealerships to get the best sales price. Basically we went to the first- got a quote (the lowest they were willing to go), then went to the second and asked if they could beat that quote and sure enough they found extra discounts and rebates for us so we saved 2k doing that. Color can also make a difference in the discounts they’re willing to give. We wanted a black car and they didn’t have any- the first dealership offered us a decent discount if we were willing to take one of the colors they aleady had off their lot but color was non negotiable for us!
Good luck, bee! While it’s exciting i also found it very stressful so be sure to bring SO with you or maybe any “firm” person because some sales people can be very pushy and it can get overwhelming. Also- take your time reading the contracts and make sure theres no unnecessary added fees or add ons that you don’t want.