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Old 12-22-2008, 06:13 PM   #1
The_Blur
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Young People Orders

While many of us have a really good understanding of the Camaro, its features, its development, and its competitors, those of us who haven't gone through the hoops of financing a car will need lots of help.

I, for instance, am a recent college graduate without a credit card. In other words, consider my credit as good as none.

When it comes to getting a car without credit at all, I would be forced to pay all cash, which is simply impossible for someone fresh out of college. I have enough fiscal responsibility to balance my budget carefully, but I worry about paying for a car. For me to buy a Camaro SS in the next 2 years, I will need to make a small down payment and finance the rest.

Can I get financing? If I can get it, how can I improve my rate?

For those of you who know anything about financing, what rate would your companies give someone without credit? I would like to get feedback from dealers, credit unions, and banks for this one. Customers are good, too, but the aforementioned groups likely have formulas that help them standardize their customers' options.

For how long can I finance this car? In my situation, longer is better. I need a replacement for my current car soon enough that it makes more sense to pay more for interest than pay more upfront. Besides the problem of my current car, I have no money, so spreading out the payments seems to make more sense. Insight on this issue is very welcome.

My down payment will be something in the range of $5k, substantially lower than I hoped to be able to put down on the Camaro. My trade-in vehicle is a Subaru Impreza TS Wagon. The current value of this car is not very high, so I can expect to only get about $2-3k out of it in a trade-in. The goal car, for me, is a minimalist 1SS, featuring an automatic transmission or RS package at the very most. There's simply no way I can afford anything else. I expect, by this time, to be able to negotiate the price down to $30k with the right dealer. Any additional information that will help can be provided at your requests.

I appreciate your feedback.
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Old 12-22-2008, 06:22 PM   #2
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I'm not an expert, but optimistically I'd say you're looking at 10-12% interest, especially in today's market - that is, if you can even get credit. GMAC won't finance to anybody with a score below 700, and "No Credit" usually turns into "600" once you start using credit.

You'll (most likely) be able to get financing from a credit union or similar - but the rate may not be what you want.

My suggestion? Get a student credit card. Put 50 bucks on it a month and pay it off right away. This will get you a credit score at the very least, which will be one more step in the right direction for improving your rate.

From my understanding, term length is based more on the amount financed than you're credit score (with dealer financing the exception, where long terms are commonplace) - but you should be able to get 72 months with no problem. You're looking at probably about 450 a month minimum.

But yeah - the main thing would be to get that credit card and start using it to build your credit history.
- Xanthos

P.S. - As I said before, I'm no expert, and I'm sure many on this board can give better advice than I. That, and all of the above is based on my own experiences and may be totally irrelevant to the common trends, or to your own personal situation.
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Old 12-22-2008, 06:23 PM   #3
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Blur, I have been there before and I have a couple of recommendations for you. First of all, I can't say at this time if you will be able to get credit and how much it will cost you. I can tell you that lenders aren't being as loose with their money as they used to be. So I would imagine you could get a loan, but you are going to pay for it. So, what to do about that?

When I was a young pup back in college, I got a credit card and because of some mail issues I went for 3 months without paying. They cancelled the card and it SCREWED my credit. So, I had to figure out a way to build some better credit. In your case, you have now so that may be even better. Since you have two years or so, you have some time to work with which will play in your favor. So, two things I would recommend:

1. Get a credit card and use it RESPONSIBILY. Meaning, charge some stuff on there, but be sure to only charge what you can pay off every month.

2. Find a local bank (best bet would be the one were you have your accounts with). Tell them that you want a one-year loan (or some other short term) for $1000 or a couple thousand. Tell them that you are doing it to improve you credit and that you plan is to take the money, put it into a CD for 6-months, then pay off the loan after 6-months or so. I had $1000 in cash at the time so they just put a freeze on my checking account for that amount as collateral.

At the end of the day, this will allow you to be your credit-worthiness. For me, it made a huge difference. The loan cost me a few dollars, but I made some of it back on the CD interest. The rest was the cost for me to re-build my credit.

Good luck!
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Old 12-22-2008, 06:26 PM   #4
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I have no inside perspective however you have to work your way up to having good credit. Get a credit card ASAP. And use it to buy stuff. Pay it on time, every time (or in advance). Whenever you would have paid cash before, pay with credit. But don't think of that card as a credit card. It might as well be the same as cash so resist the temptation to go into debt with it. That's how you get into trouble. I recently graduated college as well and have a really good credit score because I've been doing the above for the past several years. You have to show that you're trustworthy and you have to start small. Especially in the current market, you will simply be denied financing. Of course things will change over the next few years but who knows how much better it will get. Also, start having other bills (like cell phone) in your name (assuming you don't already). That helps build up your credit as well.
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Old 12-22-2008, 06:32 PM   #5
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Will anyone co-sign for you? That's the best way.

If you get a credit card make sure you pay it off at the end of the month...EVERY month. (I hate credit cards)
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Old 12-22-2008, 06:33 PM   #6
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Quote:
Originally Posted by camaropete View Post
2. Find a local bank (best bet would be the one were you have your accounts with). Tell them that you want a one-year loan (or some other short term) for $1000 or a couple thousand. Tell them that you are doing it to improve you credit and that you plan is to take the money, put it into a CD for 6-months, then pay off the loan after 6-months or so. I had $1000 in cash at the time so they just put a freeze on my checking account for that amount as collateral.
This is actually a really good idea, if you have the cash to support it. What this is called is a power of shares loan - I arranged one of these with my mother, and its how I financed my current car at 3% interest. My credit union (not sure about yours) sets the interest rate at 2% higher than the rate on the account being used as collateral.
- Xanthos
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Old 12-22-2008, 06:40 PM   #7
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go to your bank. get a credit card for 6 months no interest. put everything you spend on credit i mean everything food gas etc. and the end of each month pay the entire bill.
i am 19, and if i wanted, could get a house ever how big I wanted.
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Old 12-22-2008, 06:47 PM   #8
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go to your bank. get a credit card for 6 months no interest. put everything you spend on credit i mean everything food gas etc. and the end of each month pay the entire bill.
i am 19, and if i wanted, could get a house ever how big I wanted.
After only six months of this? Highly doubtful. I've been doing that (and more) for over two years and my credit rating is barely over 700. And I am trying to purchase a house (in fact, a small condo for only 38,000) and am having enough trouble getting a VA loan for less than 20% down.
- Xanthos
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Old 12-22-2008, 06:49 PM   #9
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Pay close attention to your debt to income ratio, with the current market a good credit score is not the only factor that will be taken into account.
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Old 12-22-2008, 06:49 PM   #10
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After only six months of this? Highly doubtful. I've been doing that (and more) for over two years and my credit rating is barely over 700. And I am trying to purchase a house (in fact, a small condo for only 38,000) and am having enough trouble getting a VA loan for less than 20% down.
- Xanthos
yuh its actually been about a year. and my credit score is well of 750. However I did spend alot of money. So I am sure that has helped.
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Old 12-22-2008, 06:50 PM   #11
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Pay close attention to your debt to income ratio, with the current market a good credit score is not the only factor that will be taken into account.
Yes, you are right about that.
But it definetly helps.
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Old 12-22-2008, 07:00 PM   #12
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I just applied for a student-oriented card that apparently gives rebates toward new and used cars, so that might help with my Camaro SS purchase. As always, I appreciate the quick, concise responses. That's probably the best part of this forum.
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Old 12-22-2008, 07:11 PM   #13
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Quote:
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I just applied for a student-oriented card that apparently gives rebates toward new and used cars, so that might help with my Camaro SS purchase. As always, I appreciate the quick, concise responses. That's probably the best part of this forum.
Blur, as others have said, just be absolutely sure you pay it off every month. Especially don't miss a payment, EVER!
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Old 12-22-2008, 07:25 PM   #14
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Blur, as others have said, just be absolutely sure you pay it off every month. Especially don't miss a payment, EVER!
I'm not going to put much on it. It's going to be carefully documented. I have to keep my expenses very low to be able to afford the Camaro. That means that I'll be only paying for food, gas, and oil until I buy the car.
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