DENIED! (Not a big surprise)

[StartingOver08]

Cars that cost $7,000 are likely 15 year old junk boxes being sold from the lot of a gas station. Not worth it considering the cost of repairs.

You can find all kinds of vehicles now for under $10k that are within 5 yrs - private seller. Look on Craigs List or Auto Trader. I bought one for just under $7k (tax, tags, title incl) in Jan 09 that is 5 yrs old - you would be amazed at what is out there now. Pay cash for your vehicle - why take on a loan when you have $10k and can buy something decent?

[Nick9075]

You can find all kinds of vehicles now for under $10k that are within 5 yrs - private seller. Look on Craigs List or Auto Trader. I bought one for just under $7k (tax, tags, title incl) in Jan 09 that is 5 yrs old - you would be amazed at what is out there now. Pay cash for your vehicle - why take on a loan when you have $10k and can buy something decent?

Update: Road loans approved me for up to $16,000 at an APR of 20% for a 66 month loan. Total payments on likely a 7-10 year old car would be $26,000. Great deal huh???

[justbroke]

Update: Road loans approved me for up to $16,000 at an APR of 20% for a 66 month loan. Total payments on likely a 7-10 year old car would be $26,000. Great deal huh???

Read the fine print. Most of those types of loan packages do not allow you to purchase a used car more than 5 (model) years old or over 75,000 miles.

[Nick9075]

Read the fine print. Most of those types of loan packages do not allow you to purchase a used car more than 5 (model) years old or over 75,000 miles.

Then I guess it is a moot point.. What about if I put $10,000 down from my own funds and finance $10,000 at the ridiculous rate and pay it off early?? can that be done.

Probably aren't any cars for less than $16,000 with less than 80,000 miles on them but do you think I can get a decent late model (under 3 years old) car for about $20,000 putting down effectively close to 50%??

The question also is would I get a fair deal or treated like someone who is homeless & desperate like the dealer is doing me a favor by 'getting me into a car' for $5,000 or more over (before taking financing into account) someone with prime credit would pay??

I would prefer a cash deal for a decent car up to about $10,000 cash but like I said the only ones I see are those 10-15 years old sold at no name gas stations

[Nick9075]

You can find all kinds of vehicles now for under $10k that are within 5 yrs - private seller. Look on Craigs List or Auto Trader. I bought one for just under $7k (tax, tags, title incl) in Jan 09 that is 5 yrs old - you would be amazed at what is out there now. Pay cash for your vehicle - why take on a loan when you have $10k and can buy something decent?

Exactly what can you find decent for $10,000 that won't require major repairs?? What assurance do I have from a private seller other than 'Trust me'??

Amazed what is out there now?? Yes, if you don't have prime credit and want to buy used or preowned almost as much as new.

[justbroke]

Then I guess it is a moot point.. What about if I put $10,000 down from my own funds and finance $10,000 at the ridiculous rate and pay it off early?? can that be done.

I bet the interest goes down dramatically! When companies like RoadLoans and Capitol One Auto and HSBC Auto Finance make these loans, that percentage rate on the package is "estimated" based on you using the check on a vehicle with an LTV of 110% (which includes the taxes and registration!).

If you put money down, the APR changes.

Probably aren't any cars for less than $16,000 with less than 80,000 miles on them but do you think I can get a decent late model (under 3 years old) car for about $20,000 putting down effectively close to 50%??

There are new cars less than that... but they are compacts. Did you see the new KIA Soul commercial. (Oh, and some of those checks won't let you purchase KIAs either.)

The question also is would I get a fair deal or treated like someone who is homeless & desperate like the dealer is doing me a favor by 'getting me into a car' for $5,000 or more over (before taking financing into account) someone with prime credit would pay??

Not with those checks. You can take that check to any dealer and they treat you okay. Always negotiate the price before you tell them you have cash (which is what the check represents).

I would prefer a cash deal for a decent car up to about $10,000 cash but like I said the only ones I see are those 10-15 years old sold at no name gas stations

Dealers make money on selling financing! So, telling them you have cash, doesn't really get them all excited. Well... these days they may get excited. The best is to do your research, look at their inventory (online) and find out what's been sitting on the lot the longest. That's when they get desperate because they basically own the car at that point.

(I'm talking about the "floor plan" and the money the automobile manufacturer gives the dealer to account for the car in the first 90 days it's on the lot. After that, the dealer gets a financing loan from a major bank to maintain its inventory, so they own it at that point. Sometimes it is counter-intuitive that it's easier to get a discount in the first 90 days, than after... because the car is costing the dealer after 90 days. Just my opinion.)

[Nick9075]

I bet the interest goes down dramatically! When companies like RoadLoans and Capitol One Auto and HSBC Auto Finance make these loans, that percentage rate on the package is "estimated" based on you using the check on a vehicle with an LTV of 110% (which includes the taxes and registration!).

If you put money down, the APR changes.

There are new cars less than that... but they are compacts. Did you see the new KIA Soul commercial. (Oh, and some of those checks won't let you purchase KIAs either.)

Not with those checks. You can take that check to any dealer and they treat you okay. Always negotiate the price before you tell them you have cash (which is what the check represents).

Dealers make money on selling financing! So, telling them you have cash, doesn't really get them all excited. Well... these days they may get excited. The best is to do your research, look at their inventory (online) and find out what's been sitting on the lot the longest. That's when they get desperate because they basically own the car at that point.

(I'm talking about the "floor plan" and the money the automobile manufacturer gives the dealer to account for the car in the first 90 days it's on the lot. After that, the dealer gets a financing loan from a major bank to maintain its inventory, so they own it at that point. Sometimes it is counter-intuitive that it's easier to get a discount in the first 90 days, than after... because the car is costing the dealer after 90 days. Just my opinion.)

Wrong about the interest rate.. The interest rate remains the same with 50% - 75% down. The only thing that 'changes' is that the total price of the vehicle you are allowed to buy may be more. You are still financing $10,000 at 20% whether you put down $10,000 on a $20,000 car or you put down $2,000 on a $12,000 car.

Someone called me from a dealership and told me the best he could do was $2,000 down on a $10,000 car, $8,000 financed at 21%.

Again, prove me wrong BUT you cannot find a decent preowned car for less than $15,000. I said to the rep on the phone that I wanted to put down $8,000 to 'get into' a $15,000 vehicle since anything for $10,000 or $12,000 total would be completely unreliable and likely need $5,000 in repairs over the first year or two. He then told me to take a look at the inventory online and call him back when I saw something I was interested in but the terms of the loan would still stand regardless of down payment

Next of course is the 'wonderful' treatment as a sub 600 borrower with a sub $100,000 income you receive from dealers (along with most other people you interact with on a daily basis). Do you think you will get a favorable price or the same price as a prime rate borrower with an over over $100,000 a year??

[justbroke]

Wrong about the interest rate..

Mine did change with a larger down payment... from experience. I guess your mileage may vary... literally! (Pun intended.) If the lender won't budge on the interest rate based on the down payment... I'd reconsider the lender. My lender, HSBC Auto, did reduce my rate with a larger down payment. Ford Motor Corp (FMC) was equally quick to reduce the rate with a down payment (as a matter of fact, Ford seems to advertise the "teaser" rate which is based on at least a 10% down payment.)

Again, prove me wrong BUT you cannot find a decent preowned car for less than $15,000.

Not trying to prove anything or anyone wrong. Of course, this will depend on what type of car and what types of duty the car will perform. You can certainly get a new car for less than $15K. However, your type of driving (miles per day), the duty of the car (hauling, work, light duty, or just commuting), and the number of passengers you need to transport greatly control the type of car and the value.

Next of course is the 'wonderful' treatment as a sub 600 borrower with a sub $100,000 income you receive from dealers (along with most other people you interact with on a daily basis). Do you think you will get a favorable price or the same price as a prime rate borrower with an over over $100,000 a year??

I make over that amount, but I was not a "prime rate" borrower (due to DTI), but enjoyed favorable terms. I really do believe this varies by lender (I've used FMC, Capitol One and HSBC Auto to finance cars). Each was different in their interest "scheme" with Ford (FMC) being the worse with the "teaser" rates.

I will agree that the whole stage has changed and the atmosphere for lending is pretty terrible right now. Again, I personally wouldn't deal with any lender who will charge 20% interest with 50% down.

I shouldn't have put the word "bet" in my previous post. I personally was unaware that there are lenders (dealers) who still stick it to you when you remove the risk from the equation (the risk being depreciation and equity).

[Rick9972]

Mine did change with a larger down payment... from experience. I guess your mileage may vary... literally! (Pun intended.) If the lender won't budge on the interest rate based on the down payment... I'd reconsider the lender. My lender, HSBC Auto, did reduce my rate with a larger down payment. Ford Motor Corp (FMC) was equally quick to reduce the rate with a down payment (as a matter of fact, Ford seems to advertise the "teaser" rate which is based on at least a 10% down payment.)

Not trying to prove anything or anyone wrong. Of course, this will depend on what type of car and what types of duty the car will perform. You can certainly get a new car for less than $15K. However, your type of driving (miles per day), the duty of the car (hauling, work, light duty, or just commuting), and the number of passengers you need to transport greatly control the type of car and the value.

I make over that amount, but I was not a "prime rate" borrower (due to DTI), but enjoyed favorable terms. I really do believe this varies by lender (I've used FMC, Capitol One and HSBC Auto to finance cars). Each was different in their interest "scheme" with Ford (FMC) being the worse with the "teaser" rates.

I will agree that the whole stage has changed and the atmosphere for lending is pretty terrible right now. Again, I personally wouldn't deal with any lender who will charge 20% interest with 50% down.

I shouldn't have put the word "bet" in my previous post. I personally was unaware that there are lenders (dealers) who still stick it to you when you remove the risk from the equation (the risk being depreciation and equity).

Hmmm, on the issue of what kind of vehicles you can find for around 15K. Was out looking with my DD the last two days and may very well buy one of these two vehicles:

1. 2008 Jeep Liberty 4x4(completely loaded but no leather seats) 15 miles Dealers initial offer to us was $17,465 including tax, title and licence.

2. 2009 Pontiac G6 9 miles. Dealers initial offer 17,895 including tax, title, and licence.

[justbroke]

1. 2008 Jeep Liberty 4x4(completely loaded but no leather seats) 15 miles Dealers initial offer to us was $17,465 including tax, title and licence.

I never had a Jeep, but they look nice. If you live in a hot climate (like the Southwest or Southeast...) who needs leather seats.

2. 2009 Pontiac G6 9 miles. Dealers initial offer 17,895 including tax, title, and licence.

G6... nice! Don't know if I'd buy a 2009 though. Isn't Pontiac the brand that they are getting rid of???

Just wondering out loud.

[dingdong]

Ok, I was able to download my loan packet from Roadloans.

Thought ya'all might like to have a good laugh at my expense (go ahead, you won't hurt my feelings!


Payment monthly $181.34 (umm, ok not so bad)


Interest rate: 22.49% (YEEEEOWWWCH!)

Total cost of financing $4,380.40
Loan amount approved for $6,500.00
Down payment requirement: 2500.00 ( pretty sure that is the loan aquisition fee they are going to tack onto the price of the car)


Total cost of car ( with interest rate) $10,880.40, oooh and don't forget the 2500.00 down.

So if you look at the real numbers, I would probably be paying a little over 13,000.00 for a car with a value of 4000.00, that I could probably buy private party for 3500.00 orless.

Hell yeah I am singing those loan docs and running to the preferred dealer ( which BTW is 5 hours from my home!


NOT!!

Looks like I'm drivin' the Big Ass Car for awhile longer.

It was fun while it lasted

[justbroke]

Interest rate: 22.49% (YEEEEOWWWCH!)

Total cost of financing $4,380.40
Loan amount approved for $6,500.00
Down payment requirement: 2500.00 ( pretty sure that is the loan aquisition fee they are going to tack onto the price of the car)

No, the $2,500 is just that... a down payment. They earn their money on the Interest Rate.

So if the car was $9,000, you'd put $2,500 down (about 28%) and have a loan of $6,500 at 22.49% of $181 a month for whatever the term quoted was.

That interest rate is probably what scares me... nothing else does.

[dingdong]

I did a little research on RL, and appearantly RL charges the dealer a large loan aquisition fee for subprime loans which they pass on to the buyer buy adding it to the sales price of the car ( or at least they are supposed to, I can't see them paying the fee that high just to sell a low priced car. (which neither RL or the dealer is supposed to mention).


So I am thinking that even if I went to a "preferred dealer" they are going to stuff that fee somewhere in the car price, otherwise the dealer has to "eat" it.

They have actually asked for cars to be returned when they forget to pass the fee on to the buyer.

See these:

http://www.ripoffreport.com/reports/0/417/RipOff0417746.htm

http://www.fraudposts.com/story.php?title=roadloans---drive---santander-consumer-usa-beware-of-hidden-loan-acquisition-fee-dallas-nationwide

http://answers.edmunds.com/question-What-actions-I-legally-I-told-I-return-car-dealership-buying-46343.aspx

[justbroke]

I did a little research on RL, and appearantly RL charges the dealer a large loan aquisition fee for subprime loans which they pass on to the buyer buy adding it to the sales price of the car ( or at least they are supposed to, I can't see them paying the fee that high just to sell a low priced car. (which neither RL or the dealer is supposed to mention).

Okay, maybe I'm thinking of the Blank Check prgram. I didn't know there was another program that pushed cheap cars for more than they're worth. No, wait... that's every dealer!

[woeisme]

I bought a Dodge Stratus for $3000, 5 years old with 68,000 miles on it. Is it a flashy car? NO! Is it a reliable car? Yes, it is. (Have added almost 100,000 miles to it since buying it and it's still going strong at 160K miles!) Maybe it's your attitude towards what is a "decent pre-owned car" that is keeping you from finding anything under $15,000 Nick. Cars are just something to get you from place A to place B. My little economical car does that just fine. Why spend any more than absolutely necessary on a depreciating asset? Our love affair with the automobile and all the commercial advertising that has sold us on "needing" all the bells and whistles is insane. Beliefs that cars aren't "safe" unless they are SUV's (hello, SUV's have much WORSE safety ratings!), etc. I'd much rather drive an affordable lower end used car that I can pay cash for, than ever make car payments again.