Help with buying a car - Ford Motor Credit.

[jetset]

I just found a car that I really like.
It's a 2002 Dodge Dakota, real nice with good mileage and a fair price. The KBB for this car is 12,500 and the ford dealership is offering it for $9,999 I plan to get $1,000 for my trade-in, so I'd be financing $8,000.

The problem is I just started a new job, and prior to that I was unemployed due to being laid off. It's only part time work, I'm only making $1,000 a month, but I live with my parents still (im 21, in college) and essentially have no bills besides my one credit card and cell phone bill. Will ford turn me down? Will I most likely have to get my mom to co-sign? If anyone has any experience with ford credit, please share, Thanks

Adam

My chapter 7 was discharged in July.
Credit scores - 520, 586, 601

[HHM]

First, off, how is $9,999 minus $1,000 equal to $8000. Second, you seem to be forgetting a little something called, tax, title and license fees that will be on top of the price.

Have you even applied to Ford Credit yet. Your signature says discharged in July, is that July 2006. If so, I'd be a little surprised if you could even get financing through Ford Credit. You can probably get financed, but it will be through a second chance program.

Given how close you are to your discharge, do you really need a car. You are going to get a hideously high interest rate...it's just not worth it. And don't even think that you are going to refinance the car in the future, refinancing a car is probably the worst financial move a person can make.

You really need to step back from the deal, and look at the true cost to purchase.

For example, lets say you get the dealer to agree on $9,500 as the selling price...plus tax and title, doc, etc. I don't know what your tax rate is, but lets assume 6%, plus the standard $300 for doc, and another $100 in misc stuff.
Your out the door price is $10,470. Honestly, your price will probably be much higher since your a second chance borrower, they will tac on GAP insurance, credit insurance, etc.

$10,470
-$1000 trade
Amount financed $9,470
Now, lets assume an interst rate of 13.5% and a 48 month term, (again, your a second chance borrower just out of BK)
Car Payment: $256.41 per month
Interest over the life of the loan: $2,837.81

In the end, that car ends up costing you, $13,307.81. Not to mention insurance and other costs of ownership.

Also, these are very conservative estimates I am using, my guess, the numbers they actually show you will be higher.

[jetset]

I have the money for T/T, and I am also able to commit 800 towards a down payment, although I'm not going to if it isn't necessary. That is my emergency and/or vacation money. So 8,000 - 9,000 depending.

I understand what your saying, and I live in Ohio, 6.75%

But I drive 1 1/2 hours a day, highway, 7 days a week. My car now has over 145k miles.

[poorme]

jet,

This is a tough position you're in. Before you go back to the dealership, make sure you KNOW what your FICOs are and know what bumps are on your credit reports. In fact, print copies and take them with you.

Bypass the sales person and speak to no one else except the F&I manager/director. Be honest and explain your situation. ASK him/her straight up if you can get financed with Ford (they can be very bk friendly). Ask if they can get you a subvened rate (that's one where Ford pays Ford Credit part of the vig to make the deal). If you can't get the deal you want at a decent rate, then go elsewhere and follow this process before you shop.

Let them run your credit ONCE, if needed, but explain that they can't shop your paper around and run your score ragged. If the dealership is a good one, and the F&I guy is as good as he says he is, he can look at your scores and report and know whether you finance or not and at what rate. He can call his banks and get you in a deal without running your credit 4 times.

I got a subvened rate from FMC 7 weeks out of discharge at 0.9%, but that was a new car, not used. I'm sure it helped to discover the F&I guy was also recovering from bk, but hey, WE HAVE COMPANY IN THIS WORLD! Good Luck - but talk to them before they run/ruin your credit.

[SinkingFast]

Another BK Friendly route to try is Capital One Blank Check. Just an FYI for you.

Several people here have gotten better interest rate from them than other lenders offered and bigger LOC's too.

BUT these people were employed full time. Part time employment after an extended lay-off may be a problem. Especially if you've changed lines of work. Lenders look at consistency of employment as well, in their decision making process.

[FilingOnMyOwn]

If you drive 1.5 hours a day, why the hell do you want to buy a truck? Just so you can waste money on gas?

[CindyLou]

Best bet is Ford Motor credit HANDS Down!! Go directly to their special finanacing department. They can get you in a NEW vehicle at the 0% if you have some to put down!!! Just did that 2 months out of BK. Good luck! P.S. If you live in SoCal let me know I have a dealer referral for you.

[Grace]

I agree with FilingOnMyOwn. If you drive that far, get a little 4-cylinder that gets great gas mileage.

[HHM]

Best bet is Ford Motor credit HANDS Down!! Go directly to their special financing department. They can get you in a NEW vehicle at the 0% if you have some to put down!!! Just did that 2 months out of BK. Good luck! P.S. If you live in SoCal let me know I have a dealer referral for you.

She probably has a point, Ford is practically giving their cars away, and have lowered some of their financing standards, but that will be on New Vehicles. The reason being, the Manufacturer (Ford) can throw all kinds of incentives at the dealers for sales of new cars. Used cars are another mater, you will probably get banged with a pretty high interest rate in trying to buy a used car. But, at the same time, a new car will be more expensive. Given your price range and limited resources, about the only new car you could probably get is a Hyundai (and they are pretty fuel efficient). The cheapest you can go with Ford is the Focus and Ranger, and they both start at about $15K (if you can find some 06's, you might get a couple grand knocked off as incentive.)

[FilingOnMyOwn]

I'd go with a focus. You'd be an absolute fool to buy a new pickup truck, when gas/crude oil is near all time highs and possibly headed higher in the near future. You'd be absolutely screwed with a gas guzzler until you paid it off.

[jetset]

Well, the reason I was going with a truck was because I don't want to drive my little 4 cyl. this winter, I live in Ohio, directly in the snow belt on Lake Erie.

I also noticed that trucks seem to depreciate in Value drastically more than cars. That is good for someone who is buying a used truck, but kinda sucks for the guy who's buying the car brand new.

I'm going tomorrow to talk with the dealer again, I will definately check though about the new '06 & '07 cars, they could actually be cheaper than buying used with the interest rates.

jetset

[HHM]

Well, don't expect too much in incentives on the '07's, but you could get a pretty good deal on the lingering 06's. Good luck

[FilingOnMyOwn]

News Flash: Unless a truck is 4 wheel drive, a small front wheel drive car will run circles around it in the snow. Just like in the 13 inch snowstorm we got in detroit michigan, january 13 1999. Virtually every truck was immobilized. Towtrucks and snowplow trucks were in the ditches everywhere. I gleefully skated around in my front wheel drive geo metro, all over town, never getting stuck. I especially liked the part where a cop I passed while going too fast, turned around and tried to pull me over, but got stuck so I just kept on skating along.

[Grace]

There's much more to buying a car than the interest rate. With a new car, you'll have to carry collision insurance which will be high on a new car and with a driver as young as yourself. The rate might be lower on a new car, but the price is much higher. A fast-talking, slick car salesman could quickly talk you into a buying a new car with a low monthly payment, but check out the length of the loan. Six year car loans are now pretty common. That's a long time to pay on a car. It'll be worth much less than what you owe after only a couple of years. Then if something happens and you can't make the payment, you're stuck. You can't sell it because you owe so much. And with a recent bankruptcy, you can't file again.

Just be careful, and take the opinions here with you.

[CindyLou]

Well, the insurance on a pickup will be less than that of a focus. I had a focus. In a high rate category because its one of the most stolen cars our there. Personally, I feel that even thought the price of a new vehicle will be higher, the risk will be much lower in the way of repairs and breakdowns. For me, right out of BK I wanted to be as safe from "surprises" as possible and this, for me, meant making sure I could get into a new vehicle. Ford made it work for me twice! But GRACE, you are right, JETSET will need to take all of his information that he gathers, take our advice, and make the right decision for himself. There are so many factors to consider and what make the difference between pre-bankrutpcy decisions and post-bankruptcy decisions is that we make the right ones for us and hopefully have a better outcome than before!! I truly wish you luck and please please keep us posted on this thread!!