Questions about loans

[cjv998]

Hey everyone, as you may know, I've been looking into getting a newer car when I get out of college (1 year left, can't wait!). I want an 04-05 WRX, which will likely be around $15k by the time I get out. I've been trying to read up on getting a loan, since I would like something newer than the cb when I'm out of college and making decent money. I have one major dilemma: I currently have no credit (no credit card to my name, and I have a student loan (one of the Ford loans) that I've been deferring interest on). So, will I be able to get a loan when I have a well-paying job, or will I still need a good credit history to get approved? Also, should I even bother getting a loan, or should I wait until I get enough saved up to pay the full amount up front? On a side note, I consider myself pretty responsible with money (I'm not an impulse buyer or anything) and insurance on the WRX should be around $170 a month (clean driving record). So, any suggestions or opinions?

[Bongo]

You should get approved no problem if the car is newer...not sure on the exact year the car has to be but I'm pretty sure that it's 97 or newer. At least this is how it was for me. I've been approved for 2 auto loans (never ended up buying the cars because I found better, way cheaper deals) Both the loans were for a little over 10k and this was back when I had 0 credit history. You shouldn't have a problem.

[phatdoughnut]

Save up a small down payment, With 0 credit you can pretty munch guarantee your sellf a higher interest rate. Credit not only helps lenders decide who they should lend to, but how good of a rate you get.

[cp[mike]]

buying a newer car with good but no credit, youll probably be approved just for a higher rate.

they like approving new car loans because they usually require full collision insurance on it, and the car is held as collateral for the debt.

older used car loans and personal loans are what youre going to have problems with.

get a credit card through your own bank and start using it. easiest way to build credit with hardly any tradeoff - every time you buy gas, use the card, and pay it off every month a few days early, and make more than the minimum payment (at this point, you shouldnt be using the card to buy things u dont have money for anyway)...

within 6 months of using the card often but responsibly youll notice your credit jump up...

[AccordWarrior]

and insurance on the WRX should be around $170 a month (clean driving record). So, any suggestions or opinions?

Have you run that by your agent yet? From what my friends have been telling me (that have WRX's), the insurance is MUCH more than you'd expect, even with full coverage. I'm fully expecting to pay 2-2.5 times what I pay for my Accord if I pick one up.

[gloryaccordy]

Have you run that by your agent yet? From what my friends have been telling me (that have WRX's), the insurance is MUCH more than you'd expect, even with full coverage. I'm fully expecting to pay 2-2.5 times what I pay for my Accord if I pick one up.

Really? The WRX has a lot more safety equipment. I know having ABS and airbags helps significantly.

I know this will sound ridiculous but I had a dream I got a quote for BB6 insurance, and it was 5.5K for 6 months, or a good 3x what I'm paying on the CB...not that that means anything though.

[cjv998]

Have you run that by your agent yet?

I used Progressive and Geico's online quote calculators, and one came up with 150/month, and the other was 170/month for full coverage. Granted, it was minimum full coverage, but still. Also, I moved my birthday back 2 years, so the rates would be accurate, because I'll be buying the car in a year or two, and by then I'll be 21, and my rates will have dropped.

After thinking about it some more, I think I'll pay half to two-thirds of the price up front, and get a loan for the rest.

[AccordWarrior]

Really? The WRX has a lot more safety equipment. I know having ABS and airbags helps significantly.

I know this will sound ridiculous but I had a dream I got a quote for BB6 insurance, and it was 5.5K for 6 months, or a good 3x what I'm paying on the CB...not that that means anything though.

Subarus, especially WRX's are VERY expensive to insure. I'm cringing when I have to think what I'm probably gonna have to pay when if/when I pick up my 07. I'll have hit the big drop in insurance by then, but still, it won't be pretty.

[accordme93]

buying a newer car with good but no credit, youll probably be approved just for a higher rate.

they like approving new car loans because they usually require full collision insurance on it, and the car is held as collateral for the debt.

older used car loans and personal loans are what youre going to have problems with.

get a credit card through your own bank and start using it. easiest way to build credit with hardly any tradeoff - every time you buy gas, use the card, and pay it off every month a few days early, and make more than the minimum payment (at this point, you shouldnt be using the card to buy things u dont have money for anyway)...

within 6 months of using the card often but responsibly youll notice your credit jump up...

This is exacly what I did to build up my credit quickly. Do exactly what Mike says and you should be golden! I've had a few car loans since I was 16, but it didn't really help my credit rating. Back in 02 I wanted to get a big screen HDTV on one of those no interests no payments for a year deals. I thought I would be able to get approved no problem, but I was rejected. So I had to have my grandma co-sign. I paid off the TV under a year and then got a CC through my bank. I started to use that like Mike stated and it built my credit up fast. When I got my loan for my TL-S over a month ago I had almost an 800 credit rating.

Use it wisely though!

[Caution]

Subaru's and Wrx's are consider class C sports car so your insurance is gonna be high, and depending on your driving record it may be higher or lower. So the insurance is gonna kill ya too. Now Y dont you just take a personal loan out and restore and swap your Accord out and call it good. You know, maybe like $6k and u got nice motor, audio, interior, exterior and heck even some spending money. I think u should really consider that, cuss take a loan out on a a new car gonna cost you 4-6 years paying it off, by about the 1st year you may already want a different car. Also since you really dont have no credit, your gonna have a high interest rate. So your gonna be looking rough anywhere around $350-$500 for the new car + $200-$300 for insurance + your student loan average $200.....so worse case u have to pay $1000 everymonth, dam, thats a lot of money....Most worst of all is that statistics shows that about 90% of college grad students dont land a good job/career right after they leave college and thats a bummer for u too. So honestly if you dont wanna have all that trouble just spend some more loving into your Accord.!

[TekSi]

Applying for a loan all depends on the dealership, really. They usually have their own bank that's their "go-to" bank, and it's usually the one that'll give you the lower interest rate too, or that was the case when Chris got his new car.
What's cool with loans for cars is that school loans don't affect you getting the loan for the car. The guys at the dealership told Chris that his school loans are a different type of loan.
The only thing that sucks about getting a new car with a loan is that you have to have full coverage for it, because it's technically not yours...yet. Mike, your insurance is gonna jump up. With Chris's, he went from paying $100 to paying a little over $400 a month. But because the insurance went up in the middle of the 10 month period his first month with the new car was over $600, to cover the difference, so he'd still have the same 2 months off.

Sorry if this made no sense guys, I know what I wanted to say, but didn't know how to say it.

*edit* Just because you have no credit doesn't mean you'll automatically get a high interest rate. The interest rate all depends on which bank approves you for the loan, because they not only go to their primary bank, they go to banks from the surrounding area too.

double edit... I'll have Chris look at this thread when he gets here, so he can say it from his point of view.(seeing as he's the one with the new car).