Thank you for the advice. My uncle has informed me that he doesn't believe i will get a cheaper rate than 9% as i am fresh off the boat as they say, no credit history at all. My rating came back as 0. My salary is low and i am paying rent, and am self employed with a brand new company. All of these factors mean that i simply will not get a loan at 5%...


Any ideas why the dealer is saying my monthly payment will be 639 a month if i am paying 33,600 out the door and am putting 10k down over 48 months????

How much are they charging me OTD on the car if my payments are 639??? Are they bs'ing me?

 

Josh,

First, do not assume that any advice from anyone is good or correct. You need to find out for yourself what you can do to save yourself a bundle. You will not know if you can become a member of a credit union or not until you try to contact them. You will not know if you can or can't get a car loan with 5% or 6% interest until you try it. It doesn't take much time to fill out an application to become a member of a credit union and it doen't take much time to fill out a loan application either.

With interest rate of 9.44% and monthly payment of $639, your finance amount is $25,500. This means dealer adds on $1900 to the car price, or they are charging you interest rate of around 12%.

I hated it when poeple like you got screwed by finance dept of a car dealer, that why I am trying to steer you to the right direction. Your hard earned money should be spent wisely, do not give away easily to a car dealer.

Contact Western CU or any CU near you to see if they can help financing your car. I am a member of Western CU, I am not working there. I am referring you to them since they have low interest rate for car loans and it seems to be fairly easy to become a member of that CU.

 

Don't negotiate the monthly payment. Negotiate the OTD cost and finance APR. These dealerships are at times notorious for BS charges once it hits the Finance guy. Run your numbers and know what you can afford, don't let them run them for you.

Why haven't you thought abt leasing?

 

i wont be able to lease as a first time buyer with no credit.


I am confused. So if they are telling me the payments are 639 a month, they are charging me 35,000 or so OTD on the car?

The deal was that with 10 k down over 4 years at 9.44 % the payments would be 639 a month. So have they added fees somewhere?

Sorry for the questions, this is the first car i have bought by myself (my uncle is going in with me and he used to be a car salesman, so he will check the financing).

 

oh i also forgot to say i am only 21

 

The total OTD is $35,500, including all possible junk fees the Finance Dept. will charge you. Using simple monthly payment calculator with $25,500 and 9.44% interest for 4 years will give you monthly payment of $639.

The best way to but a car is get pre-approved loan for the amount you will needed, then negotiate the price of the car. Do not let Finance Dept get you.

 

LA... I don't want to rain on your parade, but maybe this isn't the right time for you to buy a new car. Why don't you look at an '02 or something for much less money and life will be a lot easier for you.

The fact that you have no credit means you're going to get screwed in interest payments. At least if you chop over a third off the price of the car, that'll be much less painful.

Just my opinion. I hope things turn out as you like.

 

mate, don't you think that is what i want??!?

I tried to get financing on a used car and that is just not happening. I got quoted 15-19% interest on 16,000

i would rather pay 9.44% on a new car when the payments are 485 amonth on the used car and 620 or so on a new one.

 

Hmm.... I wish I knew what to tell you. It seems to me that you'd be getting yourself into a tough situation in any case.

If you buy a used car, you will suffer less depreciation. You will also have a lower payment in absolute terms, even if the interest rate is higher.

I really think that's your best course of action, and try to refinance the loan as quickly as humanly possible. Work on your credit rating all the time. Having an extra $140/month to put away will help.

Best wishes!

 

Dear LABrit,
You are getting some great advice from some really smart and experienced people.
And it seems that you're darn if you do and darned if you don't.
At 21 with no credit history you are not going to get a loan other than one from some crook who is going to rake you over the coals interest wise.
To get want you want (whatever that is) and build up your credit you need to tun to that Uncle of yours and have him co-sign with you so you can 1.) Get a loan 2.) Get a decent interest rate and 3.) Get a credit history and therefore a rating.
No doubt you guys a good relationship and he won't loose a penny as long as you make the payments on time.
I might chime in with you buying something other than an '06.
Look for an '05 or some other year at a Honda dealer that is Certified by them.
Or the lease will build up your credit.
If all is more than you and your uncle can bear try lookin at the '06 Civic SI.
One thing you have not mentioned is what insuring a S2000 (or SI) is going to cost a 21 year old male.
It's all a tough deal to swing at 21 but you can do it.