Opinions on Financing "newer car"??

G

guinnessman

Well-Known LVC Member
Joined
Feb 6, 2009
Messages
298
Reaction score
0
Location
Long Island
I've been thinking about this for the past 2 years. I have low 600 credit score (below good rating) and have always wanted a newer car.

Two cars that have always peaked my interest, Subaru WRX Sti and 2005+ Mustang GT. I would pretty much side with the Mustang, but i always loved turbo'd 4's, plus the gas savings is great.

I already checked it out, if I financed the Sti it would be $650month including full coverage with progressive insurance. The Mustang would be $600 ish.

Should i bite?? I have a $60k year job which is dependable, and this would further improve my credit as i pay off the car.

PS i have 2 friends at work that have over 720 credit scores, and they are both paying around $600 month for their financed Infiniti's. One has a 2008 G35, the other a 2009 G37. It's funny how i got bad credit, yet i would be paying roughly the same.

PSS i will not get rid of my 96 LSC...this baby is here to stay even if i go ahead and do this.
 
I've been doing that for the past 2 years, my credit was horrible. The thing is, even if i wait another 1-2 years, and get my score to 700+, i'd still be paying about the same haha.

So it really doesn't matter in the end. Plus this will improve my credit dramatically.

The one benefit of improving my score further, is the down payment. Right now i would have to leave around $4,000 down. If i had ace credit, i could leave $500 down.
 
In my opinion... if you have a $60k/yr job, you either save up a big chunk of cash and pay for it, or you at least make a big ass down payment. The only time you should finance is when you're buying something that usually appreciates in value, like a house.

But, if you want to, just try to keep your total debt/income ratio under 36-38%.

Anyway, 05+ GTs are rated at 17/25mpg, and an 05 STi is rated at 18/24mpg. So much for the gas savings, not that anyone should really let a couple MPG difference bother them in a $20+k car.
 
never buy a performance car for gas milage. other then that, if you want to do it then do it. i would give a bigger down payment to either decrease the monthly payments or shorten the length of payments, also try to find a loan with a low interest rate.
 
What ding-ding said.

Also,

Credit Unions for low interest. But most will require any outstanding debt collections (if you have any on your report), be paid off first.

Most banks will let you pay extra towards the principal every month. Just make sure , on the check, you specify "for principal only" on the memo line.

You'd be surprised how quickly you pay off a 20K loan if you pay 500-1000 bucks extra each month towards the principal.

I don't know how much you know about Credit reports and the like (I would think you've done some reading up on the FCRA and FDCPA since you've been trying to clear up your credit bureau for a couple of years now), but if you have any questions, PM me. I'm no attorney, but I'm well read on the FCRA and FDCPA... and I have a NACA attorney I can consult if you stump me.
 
Silly question... have you driven either of them? They're both great cars I am sure, however you may do the same thing I did earlier this year.

I was seriously considering getting a new car earlier this year. So I spent a few weeks shopping, test driving, etc. Much like you, I've always had a couple cars I have been curious about, so I was looking forward to shopping for them. The end result? I was disappointed in every car I looked at.

So, I built the rear end in the Mark, pocketed the extra dough, and smiled :)
 
luxuryrules said:
Silly question... have you driven either of them? They're both great cars I am sure, however you may do the same thing I did earlier this year.

I was seriously considering getting a new car earlier this year. So I spent a few weeks shopping, test driving, etc. Much like you, I've always had a couple cars I have been curious about, so I was looking forward to shopping for them. The end result? I was disappointed in every car I looked at.

So, I built the rear end in the Mark, pocketed the extra dough, and smiled :)
Click to expand...

Good point.
 
Fix your credit score first before even thinking of financing.

Then again, is having a newer car really that important to you? I was in a pinch and bought my 07 Focus. While I like the car I hate paying every month for it. I have about a year and a half to go and while the payments aren't bad - my mark is payment free and is cheap to maintain per month...

Focus: Payment + Gas, oil changes, etc...
Mark: Gas, oil changes - maintenance parts as they come up...
 
Car payments suck!

There are a couple of things you should do before you plunk down your hard earned dollars on a car.

Hold off on buying that car for now.

First: Take the steps necessary to repair and begin to rebuild your credit.

Second: Make sure that your life style will support the extra expenses of that car. Figure out how much the additional expenses per month will be. Don't forget insurance, and excise tax as well as your monthly payment. Begin to put this money in a savings account immediately and each and every month. If you can't put that money away, you can't afford the the car and will be asking for more financial problems by buying the car. By putting this money in the bank you will accomplish a few things. You will show the financial institutions that you can afford the loan, you will show them that you are committed to a payment regiment; but most of all you will realize that if you wait a little while, and save money, you can buy a lot more car with your money than if you are making payments. Also if you want to, you can use your savings as collateral for a secured loan which will have a lower interest rate than a car loan and it will help your credit rating as you make payments.

Putting $700.00 a month into savings account each month for three years will give you more than $25,000.00 at the end of the three years. How much car will that buy you?

After you have done this and bought your your dream car for cash; you can then begin to save for your next dream car.

A little sacrifice in the beginning will go a long way your future if you stick to it.

GOOD LUCK!!
 
To me it sounds like buying one of those cars is the fastest way to get your credit back down where it was....
 
guinnessman said:
PS i have 2 friends at work that have over 720 credit scores, and they are both paying around $600 month for their financed Infiniti's. One has a 2008 G35, the other a 2009 G37. It's funny how i got bad credit, yet i would be paying roughly the same.
Click to expand...

For how long??? That's a huge long term payment for something that depreciates rather quickly IMHO.

Sounds to me like you're being focused on the payment amount rather than the amount paid.

I'm all for anyone buying the car they want. You can buy any car you want if you don't extend the payment terms to where you are upside down. Research the resale values of the vehicles you're interested in and make sure you are comfortably ahead of the curve when it comes to equity vs. debt. If you find a new one out of reach, the best compromise is the same vehicle but two years older. Let someone else pay the majority of the depreciation.

Also be sure to investigate the insurance costs. You don't want to be unpleasantly surprised after you commit to a payment plan.
 
Thanks guys. I'm gonna save up some more money before i do anything. I did drive both cars, the Mustang was more "me", but the STi jumped off the line QUICK!!!! The seats in the Stang were much more comfy, plus the "option" of burning out in the Stang got me excited hahaha.

One thing i must say, i hated the shifter in the Mustang, it was to low down and far from my seating. The STi felt perfect, although i stalled it leaving the lot. It seams there's less room for error when driving an AWD stick car.
 
If you hated the shifter in the Mustang under normal driving conditions, I can`t wait to hear what you think of it after your first full throttle second to third shift. It just won`t work.
 
Lol..i didn't try that yet. I'm usually really good at shifting from 2nd to 3rd quickly. My trick is hitting the shifter with your palm and your pinky pointed at 10 o'clock, not the "overly manly" grab the shifter and slam it into 3rd like some Vin Diesel movie.
 
PS the seats in the STi killed me, although it was NOWHERE near as uncomfy as the SRT-4 seats, OMFG that was ridiculous!!!
 
Financing anything that goes down in value is stupid. There, you have my opinion.

There's a reason I'm driving old 'junk'. It's paid for, and I'm debt free - except the house.

Just suck it up for a bit, drive what you already own - and save for that gently used car you've got your heart set on, pay cash - and own it.
 
Life is short why wait, buy now have fun now! who knows what 3-5 years from now will bring. BTW I'm not a finacical planner...
 
Driller had great advice...

I'm all for going for the gusto but think about what position you are going to put yourself in...
 
You must log in or register to reply here.

Members online

Total: 138 (members: 1, guests: 137)
Back
Top