dealer loan....first time buyer

[skraemer]

So I know I need to shop around. Its my first auto loan. I'm 23. I have a steady job at Raytheon making over 50k a year. I have 2 credit cards.

So far I have pretty much just dealt with the dealer on getting a 1LT/2LT financed. For the 1LT they say I need 8k down without a cosigner and for the 2LT I need 10k down. Now the thing is they have me approved for a 9.5% loan. I know I'm a first time buyer with no loan history, but it seems fairly high in my opinion. Am I wrong for thinking this? I know I need to shop around for auto loans, but that APR sounds high.

Any thoughts are much appreciated.

[KeepItGreasey]

yeah that's a high APR... but it's to be expected. i'm 27, have had credit cards and cell phone/internet bills since I was 19 - but i was told that i have a lack of credit history. i got a better rate than you, but i'm not surprised at what they're giving you.

do you know your credit score?

i put 10k down on my 2SS/RS

[KeepItGreasey]

my credit score is around 740, and i for the life of me have no idea how to get it any higher. and how much history is enough history? who knows...

[cplhester]

I'm 26 put 8k down on my 1ss and got 3.99. Better try your local credit union

[KeepItGreasey]

Originally Posted by cplhester

I'm 26 put 8k down on my 1ss and got 3.99. Better try your local credit union

feck that's a good rate. i'm getting screwed. i will be looking into this...

[skraemer]

Well I just used one of those credit score estimators but its like 730

[floraneg]

Ok.... Let me give some insight on this. The dealer is marking up your rate, because he is selling your loan to a bank or credit union. It is called indirect lending. I'm the CEO of a credit union in New Orleans and let me tell you that dealers prey on people like yourself. In the New Orleans market some of the big banks like CHASE and Bank of America allow dealers to mark up the quoted rate by a maximum of 3.50%. That means if the bank is offering 5.00% for your score and history, the dealer can sign you up at 8.50% and the dealer makes the 3.50% on the loan amount on the front end. Believe me, it is BIG business for the dealers. They make more money selling your loan than selling you the car. Take the advice given earlier. Find a credit union you can join and get prequalified. For a score of 690 and above you would qualify for 3.99% for up to 72 months. Don't get ripped off by dealer financing.

[skraemer]

Ya, I've talked to my credit union. They want 10k down plus a cosigner at 5%. Just gotta convince the rents to cosign.

I know dealers make money off loans, thats why I'm still going to shop. I'm just trying to get some insight in which I should be expecting these high 9.5% loans everywhere.
I mainly used the dealer to find out a ballpark figure of what amount I would get approved under financing based on the down payment. It looks like its around 20-22k.

[oldfriend]

JUST KEEP SHOPPING AND SHOPPING TILL YOU GET WHAT YOU WANT , then go to the dealer and tell them to give their best rate to you ,and if you keep the secret that you already have a rate from another source you are in better position to make them beat your own rate from another source ,get it ? Also ask a friend of your's in real estate to check your score ,because this why i was told that the score does not [drop] for every time some one check that on you like dealers or anybody else !!!

[floraneg]

Originally Posted by skraemer

Ya, I've talked to my credit union. They want 10k down plus a cosigner at 5%. Just gotta convince the rents to cosign.

If you are making $50K and your debt ratio is below 35% there is NO reason for such a down payment requirement. What CU are you with? Again not knowing all of your details, but a 2 year work history in a professional job making 50K we would finance 90% including TT&L. My CU serves Exxon employees, and we are super conservative. You may want to sit down and discuss lowering the down payment or find another CU. Believe me, lending is very difficult right now and anyone who has a score of 700+ should no way be paying higher that 4.50% for up to 72 months period. Again shop around, everyone out there is using the credit crunch as an excuse to Jack up rates on people like yourself. The truth is, they need you more than you need them. Investment rates suck, so they need to build their loan portfolios. Be aggressive and shop around. You will get what you want.

[weaklt1]

It seems as if many people need to do more research. I started buying new cars ,all 4th gens, when I was 21 years old with no co-signer,not making tons of money while I was in college and got awesome rates and never put money down.

[skraemer]

Originally Posted by weaklt1

It seems as if many people need to do more research. I started buying new cars ,all 4th gens, when I was 21 years old with no co-signer,not making tons of money while I was in college and got awesome rates and never put money down.

I've done a lot of research on the car, and some on auto loans. I knew I would have to shop around at some point. I did try chase a few weeks back for 30k I believe, and was shot down. Credit tightening since the economy tanked seems to be a fairly large factor in it.

Are there any online auto lenders that people recommend?

Thanks for all your help!

[lbheat]

Im in the same boat as you. Im 23 and I make 65k/yr working at a Chip Corporation. Some how I have a crappy credit score of 690 and this is making me nervous of what type of financing I am getting back. Right now I am trying to buy a used 2010 1SS/RSS, auto, gfx with 6,500 miles for $29,995. I've had good paying internships while in college but since they were with different company's I think it might count against me (bouncing around companies).

I'm crossing my fingers and hopefully get good news tommorow

[GB EB]

dude.... for 9.5% and your car as colateral I'LL loan you the money.... LOL