Financing a Camaro, no credit history

[babyjulie83]

In the book "Debt Cures" by Kevin Trudeau, it states that having 5 credit reports is optimal for credit building. And having only 1 card means your report could be reported to only 1 credit reporting companies, hence the reason to have more than 1 card

Just be careful about opening these 5 credit cards....your score will probably initially take a hit and over a period of time with responsible payment history, then your credit score will start to rise. Buliding credit takes a considerable amount of time and effort....there is no quick way to build credit.

I would try to get your parent's to cosign...but please understand how important your on-time payments will be to their own credit score.

A lot of people say that young kids shouldn't put themselves in debt buying a new car. I say, it's your money....do what you want, just don't screw it up. Please remember that a car is not an investment; however, if you've got camaro fever like the rest of us just think of it as an investment in your happiness. My dad who is 65 always talks about the camaro that he almost bought when he was 20 and how he wishes he would have. Do it, but do it right.

[pondo]

Originally Posted by FFMaro

I am 18, work at the fire dept as a FF/EMT making $29,000 a year, I have no credit history, I was just put on as a joint card user on one of my parents credit cards. The credit card company says this will help me to start building credit history. My question is that how long will it take me with this 1 credit card to build enough credit history/ credit score to be able to qualify for a $22,000 auto loan with an $8,000 down payment? Also, what kind of APR might the camaro be offered with? I have no expenses, so I plan to pay this car off as quickly as I can.

Thanks

I was in your position a few years ago (i'm 26 now) and signed up for this site JUST to give you an opinion. I couldn't stand living at home and moved out ASAP. Driving a new car and taking ya girl back to your parents house isn't pimp. Besides that...let's talk financing and assume your parents will co-sign, otherwise you arent getting a loan. For comparison sake I make $68k with 720 FICO, 0 debt, and still get declined due to "insufficient credit history" and i've had multiple credit cards for 9 years but no car loans, i paid my parents monthly!

$22k loan including taxes minus 8k = 14k loan @ roughly $280 a month.

Dumping $8000 from your savings isn't the best idea in the world though. Right now is the perfect time to dump $5,000 into a ROTH IRA in a small cap growth fund. If you never add anything to that fund again, it will be $187,000 when you turn 65 (modest 8% return). If you add a modest 100 a month to it from here on out, it will mature to $752,000!!! That is a 3/4 a MILLION dollars investing only $100 a month.

When I was 16 i drove a 94 z28 (400hp) and at 18 I drove a 3000GT VR4 (400HP modded ) that about broke me every month and I don't regret it a bit. I loved cars and loved driving them so I'm not going to tell u not to buy but take into consideration a few options...

Buy the car, put $4000 down, start the roth IRA, have your parents co-sign for a sub 5% interest rate (penfed.org is 4.75) pay ~$375 a month. Get another credit card that's in both your parents names. When your FICO score goes above 650 ish, get yourself a card thats worth KEEPING (AMEX Skymiles imo). Now you have 3 cards and a loan. By the time u get out of college you'll have enough credit to buy a house and a paid off camaro!!

Have fun, enjoy the car and sit back knowing you will have money when you retire even if the state lays you off from the fire department...cause its happening now and economics are cyclic!

-James, the twisted chemical engineer

[hollywoodGU]

Honestly dont listen to these ppl telling you not to do it. We all understand that the value of a new car decreases. We all know safe investments end up earning you money. If you still want the car then get it. Hell im 19 and im getting a 2SS worth 38k. Then again i make 25k a year (not including overtime) have a savings of 25k and two cars worth about 10k together (both paid off) and on top of that im getting a 15k bonus from the military when i join in march so i will be buying mine with cash, not taking out a loan. and i know pl will say that is stupid. But its my choice.

[pondo]

Originally Posted by hollywoodGU

Honestly dont listen to these ppl telling you not to do it. We all understand that the value of a new car decreases. We all know safe investments end up earning you money. If you still want the car then get it. Hell im 19 and im getting a 2SS worth 38k. Then again i make 25k a year (not including overtime) have a savings of 25k and two cars worth about 10k together (both paid off) and on top of that im getting a 15k bonus from the military when i join in march so i will be buying mine with cash, not taking out a loan. and i know pl will say that is stupid. But its my choice.

It's no wonder our economy is in the toilet right now. Does it really sound like a good idea to spend 1.5x your ANNUAL salary on a car that may sit in your mom's garage for a year while you are on tour?

Let's see, 38k in cash or put 20k down and finance 18k, make $375 payments monthly which will boost your credit score AND make a higher yield on that cash sitting on the bank than what you are paying in interest.

That seems like a win win if you really have that much cash laying around. Not only do you build credit but you're make 2-3% interest on something you wouldnt have had before!

I know kids will be kids but someone should really be talking a little sense into you guys.

:read thethread:

[Firecapt10]

I think the best route would be to have your parents to co-sign for you, that is if they are willing and they have good credit. I have done this for my kids.

Be safe Brother.

[hollywoodGU]

Originally Posted by pondo

It's no wonder our economy is in the toilet right now. Does it really sound like a good idea to spend 1.5x your ANNUAL salary on a car that may sit in your mom's garage for a year while you are on tour?

Let's see, 38k in cash or put 20k down and finance 18k, make $375 payments monthly which will boost your credit score AND make a higher yield on that cash sitting on the bank than what you are paying in interest.

That seems like a win win if you really have that much cash laying around. Not only do you build credit but you're make 2-3% interest on something you wouldnt have had before!

I know kids will be kids but someone should really be talking a little sense into you guys.

:read thethread:

ya ill be making 2-3% on the money but in the mean time on the loan i took out i will be oweing 4-5% more. no disrespect but i have thought about all possible routes and ya i will make more but that will be negated by the fact that i will owe more

[jschuler]

Originally Posted by FFMaro

lol, you like to sterotype people, dont you? I am not your average 18 yr old., 5 lines of credit is optimal for credit history building, just because you have lots of credit dosent mean you have to use it all. Maintaining 5 lines of credit and using them all evenly by spreading out your purchases between all 5 helps build really good credit. This will help me get a mortgage in the next few yrs as well.

Actually, I'm gonna agree with him on this one. It is not necessary to open 5 lines of credit. Having too many credit cards can also be a bad thing. I had 3 major credit cards (as I still do) which I've pretty much had since I was 18, but having more than that kept me from getting loans when I had an emergency. If you do ever need a loan they might say 'well you have $20,000 worth of credit open right now.' It's not necessarily the amount of credit you have open that is beneficial to you, it is your credit history. History unfortunately takes time. I'm promise I'm not being sarcastic. I'm sure you are very capable of handling what you take on, just putting my 2 cents in from my experiences...

[alfie43]

You sound like a very mature 18 year old...well grounded and you have a plan...your plan.

Some here have offered advice and some have offered criticism. Take listen to it all, weight it out, and move forward with your plan. It sounds like you know what you want and how to get it. I get that.

When a was 19 in the 1960s, I bought a new GTO. Two years later I bought a house as a single man. It started me off on the right foot and I never looked back.

Its your life...go for it and enjoy your dreams to the fullest. Good luck.

Alfie

PS: 5 Credit cards will be seen as too much potential dept and could hurt your chances to establish credit.

[Cyberfan]

Originally Posted by FFMaro

Exactly, I am just asking if anyone would have an idea as to how long it might take me to build enough credit history to make my purchase.

So why are you asking people on Camaro5 about something that only a lender or a credit counselor would know? This is a site for car nuts, not people who are expert in how to get a loan. Talk to a lender.

But you must have suspected that if you posted that you plan to buy a car you can't afford that costs more than you make in a year that a few people would respond and say that is NUTS! I think that your local bank or credit union would tell you the same thing, only in nicer terms. Wait a few years and your income will be up and used Camaros will be more affordable!

[wullger]

Originally Posted by jschuler

Actually, I'm gonna agree with him on this one. It is not necessary to open 5 lines of credit. Having too many credit cards can also be a bad thing. I had 3 major credit cards (as I still do) which I've pretty much had since I was 18, but having more than that kept me from getting loans when I had an emergency. If you do ever need a loan they might say 'well you have $20,000 worth of credit open right now.' It's not necessarily the amount of credit you have open that is beneficial to you, it is your credit history. History unfortunately takes time. I'm promise I'm not being sarcastic. I'm sure you are very capable of handling what you take on, just putting my 2 cents in from my experiences...

[JewelZ]

Well I am 22. I have my own business, I make enough money to suppourt a house of 5 which includes myself, my parents, a twin sister(college student), and a 13 year old sister. I run my family business of diamond retailing, so it's not exactly a huge business but def. not a small business. Financing was very difficult for me due to my debt obligation ratio was very high. I have two cars already being paid for that are less than 2 years old. Also, all the other expenses of my business, and home are included and come out of my income. I could not find any bank, credit unions, or even GMAC to get me a penny. I finaly found one source who could help me out and got about 7.9% for 72 months at $547. It's not that my credit is bad, it is actually GREAT! Hope you havea good co-signer, I was about to try a co-signer but I found a source. I'm not one to take the help of others to help me buy stuff.

[stovt001]

We're gonna have to create a virtual box to drop a quarter in every time a thread is necro'ed. We'd practically cover costs with that.

[dragom]

In this economy there is no way to tell how long it will take for you to get a loan. Me I would never co sign a loan even if it is family I did that once and I ended up paying off the loan myself. It is hard at first to build up credit it isn't something you can do in a short period of time. I hope you the best though.

[nova]

Originally Posted by stovt001

We're gonna have to create a virtual box to drop a quarter in every time a thread is necro'ed. We'd practically cover costs with that.

Nobody looks at dates before they reply :p