Thinking about buying a car. Advise wanted.

[Axxon]

I am thinking about buying a car. I've been carless for a long time and I have weaknesses in financial areas and car areas so it's no picnic for me. Anyway, I have a prospect that sounds good to me but what do I know?

Anyway, the car is a 2002 PT cruiser limited edition. It has 58000 miles on it. The body looks great, the motor is clean, the inside has no rips, tears ect. The AC works fine and it started on the first pull. I haven't test driven it yet though as I'm getting my licence on friday. I'd let my SC license expire.

Anyway, we didn't talk hard numbers but we ball parked it. Keep in mind my credit is, well, suboptimal. I think it's bad but when looking at cars or moving ect, it's never hurt me. I can't just get credit but for things like this it's probably not as bad as I think it is, as they said at the lot. I've never had a repossession, a surrender, bankruptcy ect. but I have a mental block about even filling out credit checks.

Anyway, when he asked me what I'd like to spend I said $500 down and if I could get in at $300 a month including insurance that would be great. He said that he could do something like that for me. The loan would be for 39 months.

Now, this is what I'd like to spend and I wouldn't go over it for the Cruiser but it is a car I fell for and if I'm not getting ripped off too bad I'd be happy with that deal.

So, any advice, any anectdotes, am I about to be ripped by the financials, is the car not worth getting ect. I know they discontinued the Cruiser. What should I do to make sure I'm not getting ripped? I know squat about cars. I only get a 15 day warranty too. That's the scary part. I know I can buy 3rd party extended warranties but are these any good?

Heck, any feedback would be appreciated. I hate doing this since I've mostly been happy carless but recently I've just ridden one bus too many and I know a car would be a major convenience but a $300 convenience isn't something that thrills me.

Kelly BB on the car.


Condition Value


Excellent
$7,680
Suggested Retail Value Assumes Excellent Condition... More

Help please!!! :)

[stevew]

I'd probably try to get 2K down and look for a new car in the fall. Seems like they're giving them away these days in the 12k range. Or try to secure your own financing if possible. Once you play the payment game the seller has won.

[Lathum]

read this

Confessions of a Car Salesman (http://www.edmunds.com/advice/buying/articles/42962/article.html)

it's long buy may halp and is interesting

[Swaggs]

Unless your credit is completely unacceptable, this does not sound like a good deal.

39 x 300 = $11,700

With your $500 down, that is $12,200. You rated the car excellent, but it is highly unlikely that a 7-year old vehicle with 58,000 miles would rate as anything better than average and that is how I would approach the sale -- make the salesman work his way up to the average condition value. Another thing to consider is that you are looking to buy a 7-year old car and make payments on it for 3+ more years. Still owing on a 10+ year old car is probably not a really good idea if you can help.

If you are cool with buying a Chrysler, why not consider looking at new Chryslers or Chevys in the $10-15K range. You can probably get something close to 0% financing over 4 or 5 years and still be within the price range that you are comfortable with. And then, you'll have a paid off car that is 5 or 6 years old, rather than 11 or 12 years old.

If you are willing to buy a Chrysler or Chevy, I would consider looking at brand new, small sedans. You can probably get 0% financing

[Axxon]

Unless your credit is completely unacceptable, this does not sound like a good deal.

39 x 300 = $11,700

With your $500 down, that is $12,200. You rated the car excellent, but it is highly unlikely that a 7-year old vehicle with 58,000 miles would rate as anything better than average and that is how I would approach the sale -- make the salesman work his way up to the average condition value. Another thing to consider is that you are looking to buy a 7-year old car and make payments on it for 3+ more years. Still owing on a 10+ year old car is probably not a really good idea if you can help.

If you are cool with buying a Chrysler, why not consider looking at new Chryslers or Chevys in the $10-15K range. You can probably get something close to 0% financing over 4 or 5 years and still be within the price range that you are comfortable with. And then, you'll have a paid off car that is 5 or 6 years old, rather than 11 or 12 years old.

If you are willing to buy a Chrysler or Chevy, I would consider looking at brand new, small sedans. You can probably get 0% financing

That's the thing I can't calculate. The 300 includes insurance so what really what am I paying for the car? I don't really know.

I maybe could get into a new car but there's no way my credit gets me close to 0% finances unless I pay something like close to 100% down.

I'm sure there are lenders who would work with someone with my credit without taking advantage but I have no idea how to find them and am loathe to shop around lest enough enquiries hit my credit bureau that will basically make me unlendable to.

I see your point and agree about the age of the car; I'd be paying almost the entirety of the payment for short term use not really as a long term investment.

[Axxon]

read this

Confessions of a Car Salesman (http://www.edmunds.com/advice/buying/articles/42962/article.html)

it's long buy may halp and is interesting

Still reading this but I just got to the "up to" part. I had to laugh because I started with the same $300 figure and when he agreed right away I added, that is $300 including insurance. I saw him briefly unsettled but he quickly agreed with that. It actually made me nervous, kinda like he knew I was way too high on my end since he had no trouble agreeing so fast. SIGH. I hate negotiating from a position of weakness. This read should help me a bit on that front.

[Axxon]

Also, the guy said I was a new car buyer since no other car purchases showed up on my report. I've mostly paid cash for cars but I have bought two off a lot years ago and they've likely fallen off the report.

Is there anything like a new buyer program anywhere or is that a negative like the guy seemed to imply it was?

[Lathum]

Also, the guy said I was a new car buyer since no other car purchases showed up on my report. I've mostly paid cash for cars but I have bought two off a lot years ago and they've likely fallen off the report.

Is there anything like a new buyer program anywhere or is that a negative like the guy seemed to imply it was?

I can't imagine it being a difference either way and certainly not in a negative light.

BTW I can't take credit for that link, someone posted it a while back.

[Axxon]

I'd probably try to get 2K down and look for a new car in the fall. Seems like they're giving them away these days in the 12k range. Or try to secure your own financing if possible. Once you play the payment game the seller has won.

This is probably excellent advise but it goes against the whole "ridden one bus too many" thing. ;)

[DanGarion]

Have you looked into getting you loan through your bank? Are you a member of a credit union (I'd highly suggest to look into becoming one if not). Also if you are shopping around for a loan the queries should not hit your credit report, since multiple queries for the same type of service are not a penalty, only multiple hits for different types of credit (car, credit card, home, line of credit) in a small period of time.

Also why is insurance being included in the loan? You should be getting insurance through your own provider, I doubt anything they offer you will be any better (IMO).

[Lathum]

yeah, I was confused by the insurance comment, maybe he meant taxes and registration?

[Axxon]

Have you looked into getting you loan through your bank? Are you a member of a credit union (I'd highly suggest to look into becoming one if not). Also if you are shopping around for a loan the queries should not hit your credit report, since multiple queries for the same type of service are not a penalty, only multiple hits for different types of credit (car, credit card, home, line of credit) in a small period of time.

Also why is insurance being included in the loan? You should be getting insurance through your own provider, I doubt anything they offer you will be any better (IMO).

Well, I didn't necessarily expect them to build it into the note but made it clear that the note plus insurance should be around $300.

I just bit the bullet and got my free credit reports and did the one month trial to see my FICA score with Experian. Lets just say it isn't good, I'm in the lower end of sub prime. The thing is, all the stuff is really petty. It's all stuff I could pay off fairly easily and I plan too.

It doesn't help me now though unfortunately but I needed to confront this so in a way it really has. I wonder if I could get a debt consolidation loan or something to pay them off? It might be better than a car even. It'd be cheaper that's for sure. :)

[Axxon]

yeah, I was confused by the insurance comment, maybe he meant taxes and registration?

Naah, I just misspoke.

[Swaggs]

Well, I didn't necessarily expect them to build it into the note but made it clear that the note plus insurance should be around $300.

I just bit the bullet and got my free credit reports and did the one month trial to see my FICA score with Experian. Lets just say it isn't good, I'm in the lower end of sub prime. The thing is, all the stuff is really petty. It's all stuff I could pay off fairly easily and I plan too.

It doesn't help me now though unfortunately but I needed to confront this so in a way it really has. I wonder if I could get a debt consolidation loan or something to pay them off? It might be better than a car even. It'd be cheaper that's for sure. :)

Paying off outstanding debts will not make your credit score drastically improve in the short term. Your numerical credit score (whether Fica or Beacon or whatever) is based on the history and depth of your payment history more than what you currently owe. The best way to improve your credit score is, over a period of years, paying all of your bills on time, establishing 2-3 smaller lines of credit (credit cards, car payments, etc. that you pay off every month), and getting rid of multiple or redundant lines of credit (things like Sears or clothing store charge cards that you can only use at one store are really no more useful than a general Visa/Mastercard/Discover).

Lenders use the score as a barometer of how likely you are to pay your bills, essentially. And, they use that score, along with your debt to income ratio (basically, how much you make versus how much you already are committed to spend) to judge how much money that they can safely use.

[Axxon]

Paying off outstanding debts will not make your credit score drastically improve in the short term. Your numerical credit score (whether Fica or Beacon or whatever) is based on the history and depth of your payment history more than what you currently owe. The best way to improve your credit score is, over a period of years, paying all of your bills on time, establishing 2-3 smaller lines of credit (credit cards, car payments, etc. that you pay off every month), and getting rid of multiple or redundant lines of credit (things like Sears or clothing store charge cards that you can only use at one store are really no more useful than a general Visa/Mastercard/Discover).

Lenders use the score as a barometer of how likely you are to pay your bills, essentially. And, they use that score, along with your debt to income ratio (basically, how much you make versus how much you already are committed to spend) to judge how much money that they can safely use.

That's the frustrating part. None of what I owe is credit based. It's all old utilities and stuff which is odd. There's nothing on the good side. Where's my current ISP that I've paid off on time every month? No where. The ones on the list, where's the months upon months of timely payments on the report? Not there.

It looks like getting credit is the only way to raise the score and I've never really been into the credit scene so I'm going to have to bite the bullet and get some and with a bad score, well... I'm stuck getting a crappy deal on a car.

[fantom1979]

read this

Confessions of a Car Salesman (http://www.edmunds.com/advice/buying/articles/42962/article.html)

it's long buy may halp and is interesting

Thanks for the link, it is a great read.

[miked]

How can he know that $300 will cover payment and insurance...is he getting the insurance for you?? You are better off assuming an insurance amount and then doing the difference yourself. You can play with numbers to get an a better monthly payment if you are willing to sacrifice some liability, deductible, etc. Not sure what the rates are in AZ, but in GA for my 2000 Altima and Pathfinder, I'm paying about $120 and that includes a $500 deductible and collision. I'm also not at the minimum coverages. My guess is that you can probably secure a rate in the $75 range (they will take credit into account). That way, you can go back and say you'd rather pay $225/month or something. Remember, you will almost always come out worse with a dealer than you would with a private party. If you have a job, you can check to see if your employer has any programs to help secure car loans, etc.

[Axxon]

How can he know that $300 will cover payment and insurance...is he getting the insurance for you?? You are better off assuming an insurance amount and then doing the difference yourself. You can play with numbers to get an a better monthly payment if you are willing to sacrifice some liability, deductible, etc. Not sure what the rates are in AZ, but in GA for my 2000 Altima and Pathfinder, I'm paying about $120 and that includes a $500 deductible and collision. I'm also not at the minimum coverages. My guess is that you can probably secure a rate in the $75 range (they will take credit into account). That way, you can go back and say you'd rather pay $225/month or something. Remember, you will almost always come out worse with a dealer than you would with a private party. If you have a job, you can check to see if your employer has any programs to help secure car loans, etc.

It's not as odd as I made it sound. Dude asked me what I wanted to spend a month and I basically said I wanted to spend $300 including insurance. I didn't really say that I wanted him to include it into the loan or anything and I figured ( since he told me that if I didn't have a carrier that they worked with several insurance companies and could get me a good rate ) that he would be able to ballpark the cost ( he'd asked about my driving history ) and figure if he could write a loan to me for no more than $300 - price of insurance.

But... the last lot I'd checked DID include insurance with their notes mandatory but it was a rent to own deal so that's probably what was different. At the very least it's what got me thinking about insurance and it's why I phrased my answer so oddly.

It's really not a bad idea for higher risk car loans to do this because that way they know you can't drop the insurance and crash the vehicle leaving them high and dry. If it's in the note, you may bail on the loan but you're not going to drop the insurance to save money or anything so it helps them.

I don't know man, I haven't bought a car off a lot since the Reagan years. Cut an old man some slack. Well, the very, very early Bush Sr days anyway. ;)

[DanGarion]

It's not as odd as I made it sound. Dude asked me what I wanted to spend a month and I basically said I wanted to spend $300 including insurance. I didn't really say that I wanted him to include it into the loan or anything and I figured ( since he told me that if I didn't have a carrier that they worked with several insurance companies and could get me a good rate ) that he would be able to ballpark the cost ( he'd asked about my driving history ) and figure if he could write a loan to me for no more than $300 - price of insurance.

But... the last lot I'd checked DID include insurance with their notes mandatory but it was a rent to own deal so that's probably what was different. At the very least it's what got me thinking about insurance and it's why I phrased my answer so oddly.

It's really not a bad idea for higher risk car loans to do this because that way they know you can't drop the insurance and crash the vehicle leaving them high and dry. If it's in the note, you may bail on the loan but you're not going to drop the insurance to save money or anything so it helps them.

I don't know man, I haven't bought a car off a lot since the Reagan years. Cut an old man some slack. Well, the very, very early Bush Sr days anyway. ;)
You gave away all the power you have by telling him how much you want to pay a month.

Also I doubt a dealer would be out of anything if you crash a car that you got a loan on. The company that provides the loan would be the one that gets the hit.

[Desnudo]

Still reading this but I just got to the "up to" part. I had to laugh because I started with the same $300 figure and when he agreed right away I added, that is $300 including insurance. I saw him briefly unsettled but he quickly agreed with that. It actually made me nervous, kinda like he knew I was way too high on my end since he had no trouble agreeing so fast. SIGH. I hate negotiating from a position of weakness. This read should help me a bit on that front.

Why are you negotiating from a position of weakness? You have all the power in the decision.

[stevew]

Might not be a bad time to ask a parent or sibling to co sign. Just make sure that they put you on the note too. Fucker had me straw buy a car once when I was less knowledgeable. I make 48 on time payments and my moms was the only one who was positively effected. Went to buy the next car and had to take a double digit rate cause my credit history was still shaky.

[dubb93]

If you think the car is worth 7600 walk in and offer him 5k. Atleast at that point he will know not to mess around with you. They will counter, but it is far better to start low than to go in and offer 12k for a car worth less than 8.

[Axxon]

Why are you negotiating from a position of weakness? You have all the power in the decision.

The short answer is that I'm not really good at negotiating about something that I have no knowledge about ( in two ways really, knowledge of the loan process and knowledge about cars ). A more correct answer is because of those things plus the fact that I couldn't buy the car if I wanted to.

The negotiation really hasn't started yet; I just set a boundary for worst case scenario and will reinforce that up front if I decide to go for the car. I also gave myself some time to gain the one thing I have no knowledge of, the loan process and the value of the car.

Yes, I set up an inferior looking position but I didn't get drawn into my position. I didn't sell myself on the deal just because I wanted the car and they'd sell it to me. I couldn't.

So if I go back I will be able to better negotiate because I'm doing my homework. I also have nothing to lose because I've already clearly set a walk away price and I did it when I was in good mood. That gives me more confidence in the negotiation and I'm really pretty good in negotiations in my element. I won't be that good at this but I won't be a sitting duck.

That's my spin, I mean take on what I did yesterday.

[Lathum]

If you set a boundary for worse casr scenerio wit hthem thats what you will pay, they aren't going to give you a deal for lower.

The best thing I got out of that article was if at any time you feel uncomfortable get up and walk out.

[DaddyTorgo]

i agree with lathum. you can't set that boundary for them, because they will work you right up to it.

what you need to do is have that boundary in your head and get them to start as low as you can and keep holding the line to get it cheaper. and if they won't sell it to you, you get up and walk away. Shit, there's plenty of cars out there right now...it's a buyer's market.

[Rich1033]

Yep, you completely approached this from the wrong direction. Id suggest moving on to a different dealership and start over.

First of all, get your own insurance. Very easy, it takes less than 15 minutes. Just call up with a model of a car you are interested in and ask for a quote. They will tell you then or get back to you with their best number. That will give you an idea of what you will pay for that and similar cars. There is no point in involving a dealership in any of this.

Second, never tell them the highest you are willing to pay. What good could possibly come from this? You have all the power here. Start low and start with the total price, not the monthly payments. That will come later.

Third, do not get attached to one specific car. Yep, especially one that is over 5 years old. Just look around and Im sure you will find several that you like. Use the interwebs to find out any problems that are possible for these cars. You really do not want to sink money into a used car you are still paying for.

Forth, look into getting your own loan if you can. If anything you can use that interest rate to move their rate down. They really want you to finance through them. Really, you are not in nearly as bad a situation as you think. I dont have the best credit, but had no problem securing a loan for a brand new motorcycle last year. Just called up my credit union(that I really dont even use, I had like $50 sitting in an account) and they called me back with a number. Quick and easy.

Honestly, you are being way too negative about this. People with similar credit buy cars everyday. Also, Im sure everything I have said has already been said by others, but it sounds like you are trying to talk yourself into thinking that you have been going about this in the right way. If there is anyone that you can have tag along with you, other opinions cant be a bad thing.
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[DaddyTorgo]

i agree with rich (yes - shocking, i agree with someone from ohio) - scrap this dealership and move on to a new one

[PilotMan]

My question is why are you sinking yourself into something that is going to set you back 300 a month (for over 3 yrs), when you have money that is outstanding and hurting your credit?

What you should be doing is repairing your credit first off, save your 300 a month for a few months, then put that money down on a cheaper car, and cut your payments in half at least.

Fiscal discipline is the only thing that is going to help you right now. So what if you are sick of riding the bus, doing this is only going to make your current situation worse.

[Axxon]

Yep, you completely approached this from the wrong direction. Id suggest moving on to a different dealership and start over.

First of all, get your own insurance. Very easy, it takes less than 15 minutes. Just call up with a model of a car you are interested in and ask for a quote. They will tell you then or get back to you with their best number. That will give you an idea of what you will pay for that and similar cars. There is no point in involving a dealership in any of this.

Second, never tell them the highest you are willing to pay. What good could possibly come from this? You have all the power here. Start low and start with the total price, not the monthly payments. That will come later.

Third, do not get attached to one specific car. Yep, especially one that is over 5 years old. Just look around and Im sure you will find several that you like. Use the interwebs to find out any problems that are possible for these cars. You really do not want to sink money into a used car you are still paying for.

Forth, look into getting your own loan if you can. If anything you can use that interest rate to move their rate down. They really want you to finance through them. Really, you are not in nearly as bad a situation as you think. I dont have the best credit, but had no problem securing a loan for a brand new motorcycle last year. Just called up my credit union(that I really dont even use, I had like $50 sitting in an account) and they called me back with a number. Quick and easy.

Honestly, you are being way too negative about this. People with similar credit buy cars everyday. Also, Im sure everything I have said has already been said by others, but it sounds like you are trying to talk yourself into thinking that you have been going about this in the right way. If there is anyone that you can have tag along with you, other opinions cant be a bad thing.
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That insurance misquote is the misquote that will not die. I didn't tell them i wanted to put the insurance on the loan. I said that I didn't want to pay more than $300 including note and insurance. There is a difference.

I'm really not super attached to the vehicle. I think shopping for it without the ability to get it allowed me to get over that hump pretty nicely and the advice here has helped even more.

Yeah, I'm not really trying to convince myself I went about it the right way. I'm not under that illusion. I'm trying to consider how I can turn a negative into a positive because short of walking away that's the best thing to do. I'm also not sure walking away helps me at all at this point. What have I got to lose trying some of the techniques you guys have given me? If the price doesn't work out, then I can still walk away but I'll have some experience with negotiating.

If I go in there just thinking of it as practice for the real car I think I'll be alright and I can see what kind of tricks they are going to try and pull. I think it'd be a good educational thing and like I said, the pressing need for a new car now has really diminished as I realize the situation.

[DaddyTorgo]

That insurance misquote is the misquote that will not die. I didn't tell them i wanted to put the insurance on the loan. I said that I didn't want to pay more than $300 including note and insurance. There is a difference.

I'm really not super attached to the vehicle. I think shopping for it without the ability to get it allowed me to get over that hump pretty nicely and the advice here has helped even more.

Yeah, I'm not really trying to convince myself I went about it the right way. I'm not under that illusion. I'm trying to consider how I can turn a negative into a positive because short of walking away that's the best thing to do. I'm also not sure walking away helps me at all at this point. What have I got to lose trying some of the techniques you guys have given me? If the price doesn't work out, then I can still walk away but I'll have some experience with negotiating.

If I go in there just thinking of it as practice for the real car I think I'll be alright and I can see what kind of tricks they are going to try and pull. I think it'd be a good educational thing and like I said, the pressing need for a new car now has really diminished as I realize the situation.

that's a good point. as long as you're not in love with the car and you're willing to walk away then it's not bad "practice"

[Axxon]

My question is why are you sinking yourself into something that is going to set you back 300 a month (for over 3 yrs), when you have money that is outstanding and hurting your credit?

What you should be doing is repairing your credit first off, save your 300 a month for a few months, then put that money down on a cheaper car, and cut your payments in half at least.

Fiscal discipline is the only thing that is going to help you right now. So what if you are sick of riding the bus, doing this is only going to make your current situation worse.

I honestly think you're giving me the best advice here but I still have to overcome the no positive credit deal or wait a long time to see my score rise naturally without credit. That'll take way longer than a few months.

Rest assured though that the best thing I took from this thread is I finally faced my financial situation head on and that is really something I want to fix more than getting a car but again, if I can do both at the same time, in a reasonable manner, I could be tackling the debt erasure ( it's really not a lot of money but it's spread out ) and building credit at the same time and no, I don't want to be spending $300 a month if I'm aiming to reduce debt at the same time.

What I'm really considering maybe is telling them an offer of $5000 and seeing what they'll do with that. I do think that's a fair price and if they don't agree then no biggie but if they do I'll have an idea on what kind of interest rate they think I should have. At that point I can still say no. I think I'd be missing an opportunity to get free information and experience if I didn't at least try and I can take a wingman with me in case I don't have the willpower I feel I have.

[Axxon]

that's a good point. as long as you're not in love with the car and you're willing to walk away then it's not bad "practice"

I honestly don't think I can love a car. This is me. A girlfriend once asked me what type of car I owned and I told her "a gold one" and that was one of my favorite cars. I really don't get into cars that much and makes and models really don't mean much to me. A car is just a tool to me so looks and all are plusses but not enough to bewitch me. It's kinda why I haven't had a car in a while. That, plus I really don't like driving very much either.

It's just that the public transportation out here is that bad. Otherwise, I'd be happy to just scrap the idea totally.

[DaddyTorgo]

cool

[dawgfan]

I honestly think you're giving me the best advice here but I still have to overcome the no positive credit deal or wait a long time to see my score rise naturally without credit. That'll take way longer than a few months.

Rest assured though that the best thing I took from this thread is I finally faced my financial situation head on and that is really something I want to fix more than getting a car but again, if I can do both at the same time, in a reasonable manner, I could be tackling the debt erasure ( it's really not a lot of money but it's spread out ) and building credit at the same time and no, I don't want to be spending $300 a month if I'm aiming to reduce debt at the same time.

What I'm really considering maybe is telling them an offer of $5000 and seeing what they'll do with that. I do think that's a fair price and if they don't agree then no biggie but if they do I'll have an idea on what kind of interest rate they think I should have. At that point I can still say no. I think I'd be missing an opportunity to get free information and experience if I didn't at least try and I can take a wingman with me in case I don't have the willpower I feel I have.
First off, don't give the dealership any ground to start off with. Meaning, don't provide them the option of determining an interest rate for you, because they will work that to their utmost advantage.

Best option for buying a car is to have cash. Next best option is to secure your own financing - don't provide the dealership another tool to extract money from you. If you allow them to provide financing, they'll use that to their advantage, especially if you're not all that good with numbers and understanding exactly how the various factors - monthly payment, interest rate, total price - interact. Better to join a credit union and shop their car loan options. You are far less likely to get screwed over on your loan terms by doing that.

Go to the bank, discuss roughly how much money you think you want to spend on a car and see what options they give you. Just don't finance through the dealership. Also, research the car you want via Kelly Blue Book to know what you should be paying for it, and check out its history via Carfax (the month subscription is all you should need and well worth the money to know what you might be getting yourself into). Set a limit in your head of the total price you're willing to pay, and be willing to walk if you're not getting the terms you want.

I will say this - given that cars are depreciating assets and you pay more for a car by financing it (when you consider the amount of interest you pay on top of the loan amount), I would strongly suggest limiting your car search to something you can pay cash for. Given you currently don't have a car, why not get a cheap used car for $3K or less? Do your research online about reliable brands, spend the money for a month's pass to Carfax and research the history of whatever car you're looking at and utilize Kelly Blue Book to know what you should be paying for the cars you're looking at.

The other thing I'd suggest is getting a credit card through a bank (or better yet a credit union) and also have a checking account with the same bank (or credit union). Use that card for all your purchases, and be diligent about paying off the balance via your checking account. The ability to do this online makes this easy, though if you are uncomfortable doing finances online, you should also be able to do this through your bank's cash machines.

You just need to be disciplined enough to pay off the card regularly - and by regularly, I mean daily or at most weekly. Only spend as much as you actually have in your checking account; in other words, treat it like a debit card. This will require that you are aware of your current balances. Paying off your balance quickly should enable you to avoid paying nasty interest rates on your card; if your credit rating isn't very good, you probably won't be able to get a good interest rate on your card to start off with, but if you pay it off regularly and promptly, this shouldn't be an issue.

By using a card this way, you will start building a good credit history to counter-balance whatever negatives are on your record.

[CU Tiger]

Ok your last few responses are making this easy.
Lets separate the car and credit issues.
First You say you NEED a car, then you seem to justify the purchase by saying it will also help your credit. Forget teh FICO....it really isnt a maeasure of your valuee as a person I swear.

Given that your are not vein or concerned about coolness of your car, you need to be paying cahs for a car.

You can buy a running ugly car for $500.
The biggest benefit is you only need liability insurance becasue if you total a $500 car you dont need aa check from the ins company. This will save you each month big in insurance, buy a $500 car and drive it a few months. The good news is a $500 car doesnt lose value, when you get ready to upgrade you will get your money out of it. Then move up to a $1500 car, etc. (3.5 months at $300)

This works and is what the wife and I did starting out.

I like to laugh that I am one of the few people I know to buy a $100 car and a $100,000 car both by the time I was 30...these days I hover much closer to the 20k number and always pay cash.

[Axxon]

Ok your last few responses are making this easy.
Lets separate the car and credit issues.
First You say you NEED a car, then you seem to justify the purchase by saying it will also help your credit. Forget teh FICO....it really isnt a maeasure of your valuee as a person I swear.

Given that your are not vein or concerned about coolness of your car, you need to be paying cahs for a car.

You can buy a running ugly car for $500.
The biggest benefit is you only need liability insurance becasue if you total a $500 car you dont need aa check from the ins company. This will save you each month big in insurance, buy a $500 car and drive it a few months. The good news is a $500 car doesnt lose value, when you get ready to upgrade you will get your money out of it. Then move up to a $1500 car, etc. (3.5 months at $300)

This works and is what the wife and I did starting out.

I like to laugh that I am one of the few people I know to buy a $100 car and a $100,000 car both by the time I was 30...these days I hover much closer to the 20k number and always pay cash.

Another huge benefit is that you don't need to worry about the $500 car being a lemon because if you have to replace it, it's easy. Now we're coming full circle. That was my idea to begin with but everyone I know tells me it's a bad idea. I think it's because they know I know nothing about cars and figure for sure I'll get a lemon which is more trouble than it's worth but two months of payments I didn't spend on a lot car buys another $500 car if worse case scenario happens.

I'll admit to tying the car to the FICO score but that's a really expensive way to up your credit and buying used, there's still the possibility the car is a maintenance hog and I'd have to keep sinking money into that until the note is paid.

Last time I bought a car I was so lucky. I went to the lot, found what I wanted, paid cash ( $2500 under kelly bb. ) and had a solid car until it was stolen. The situation is a bit different now.

I'd never really considered the move up option but really, why not? I like the sound of that. I still want to go in and get that negotiation practice but what if they accept my $5000 offer? :)

[stevew]

I always have a hard time finding the 500 dollar car, with state inspection and such. I should probably look harder.

[Axxon]

I always have a hard time finding the 500 dollar car, with state inspection and such. I should probably look harder.

I found one on craigslist for $500 that's right down the block from me. It's a 94 tempo that "Runs good, needs some work but is in really good shape. Stereo Bumps Too. "

Guess who's getting a call tomorrow? :)

I may call on this one too:

1990 honda accord, i really need to sell it. its a 91 accord automatic, everything works a/c is good, it also has a clean tittle, and has 120k good emmisions until december 2010. the only reason i am selling it its because i need to pay my rent tomorrow, by 5 pm . like i said the car is in very good comdition it needs nothing , no oil leaks and everything work. i am asking $700 OBO if interested Call 623-418-9834 ill be up all night so if interested please call me i really need to sell it. Thanks for looking.

I've always wondered what it'd be like having a clear tittle.

[stevew]

I'd probably go for the Accord, i dunno though.

[Axxon]

I'd probably go for the Accord, i dunno though.

It does sound like the better deal and looks better but I don't know if the tomorrow deadline is going to work realistically and he may not sell if he can't make it in time. I'm planning to call him too though. Can't hurt.

[dawgfan]

It does sound like the better deal and looks better but I don't know if the tomorrow deadline is going to work realistically and he may not sell if he can't make it in time. I'm planning to call him too though. Can't hurt.
I hate to assume too much about your finances, but $700 is pretty low risk. Better yet, the seller gave you wiggle room by saying "$700 OBO". Try starting him off at $550 - say something like "Without being able to take it to a mechanic first, I'm not willing to go up to $700 for it". See what his response is - I bet you can get it for between $600-650.

My advice about joining a credit union and getting a credit card that you manage responsibly and pay off as you use it also stands, and will be a good way to start building some good credit.

[flere-imsaho]

Yeah, if you really need a car and you don't have a lot of money, I'd get a used Toyota or Honda. In all likelihood the maintenance on these won't be all that expensive, and they'll get you from A to B.

When you do have money saved up, I wouldn't bother getting financing from a dealership given your credit score situation. They'll find a way to get more money out of you than you want. We financed our last car using a Blank Check from Capital One (http://www.capitalone.com/autoloans/blank-check/index.php) and it was pretty painless, and the interest rate was far below what the dealership could offer anyways.

[CU Tiger]

FWIW when we bought our "$500 cars" they were all American, older and low miles. These things were BOAT cars....hideous. But inside they looked new, they were grandma or grandpa cars...driven rarely found both in the newspaper Sunday classifieds.

[Barkeep49]

Any update?

[DaddyTorgo]

bumpity? update? i woulda gone after the accord but seen if i could make an appointment with a nearby mechanic to at least pop the hood and check it out real quick

[Axxon]

bumpity? update? i woulda gone after the accord but seen if i could make an appointment with a nearby mechanic to at least pop the hood and check it out real quick

I'm still holding my money right now. I decided not to make a rush decision and by the end of next month's bonus I'll have over a grand so I can afford to be a bit more picky.

I was thinking a lot about repairing my credit and have been considering getting a small card, like a $200 limit or so, even secured if need be and using it to pay off all the smaller debts one at a time. I'll be removing bad debts and adding monthly payments on the good side.


Just talking to everyone here gave me the fortitude to face the situation and of course, it's not as bad as it seemeed. Thanks for all the support. I'll let you know what I finally end up with when I get it. :)

[CU Tiger]

Another option to credit repair os to go to the bank and take out a small loan.

Like 1,000 for ddebt consolidation or some such (they can not lend to you for credit score repair) pay normal payment for 90 days then pay it off. Rinse and repeat. If dilligent 10 tries will eliminate your bad debt history from 99% of lenders...and will cost you 15-20 each round...

[stevew]

I wish I still lived down south, I remember I used to see all kinds of cheaper old cars there. Stuff that would have rusted away from salt in PA.

[Axxon]

Another option to credit repair os to go to the bank and take out a small loan.

Like 1,000 for ddebt consolidation or some such (they can not lend to you for credit score repair) pay normal payment for 90 days then pay it off. Rinse and repeat. If dilligent 10 tries will eliminate your bad debt history from 99% of lenders...and will cost you 15-20 each round...


That's pretty much my idea with the secured card but with a smaller loan amount. It's a good idea. I'm confused though, it'd only cost 15-20 to borrow 1000???

[Axxon]

I wish I still lived down south, I remember I used to see all kinds of cheaper old cars there. Stuff that would have rusted away from salt in PA.

Yep, in Carolina I would already have a car in that range. I bought a $200 car there that lasted around 18 months before I moved to something better.

[CU Tiger]

That's pretty much my idea with the secured card but with a smaller loan amount. It's a good idea. I'm confused though, it'd only cost 15-20 to borrow 1000???

yeah because you are only gonna keep the loan 3 months....make it a 3 year loan, drop the money in a savings account, in 90 days pay it off...you have only paid 3 months of interest. 1,000 loan at 10% would only be $100 a year/4 = $25 May vary a bit on interest rate. Here is the benefit to this system over a credit card, a credit card will only report 1 or 2x MAX per year on GOOD STANDING...get behind and they will rack you up. And even then if they report 10 times it is still one good account 10x. With the small loans it is 10 separate accounts. The reason for 90 days is banks are only required to report loan findings every 60 days....if it is opened and closed between reports it may never show up.

[Axxon]

yeah because you are only gonna keep the loan 3 months....make it a 3 year loan, drop the money in a savings account, in 90 days pay it off...you have only paid 3 months of interest. 1,000 loan at 10% would only be $100 a year/4 = $25 May vary a bit on interest rate. Here is the benefit to this system over a credit card, a credit card will only report 1 or 2x MAX per year on GOOD STANDING...get behind and they will rack you up. And even then if they report 10 times it is still one good account 10x. With the small loans it is 10 separate accounts. The reason for 90 days is banks are only required to report loan findings every 60 days....if it is opened and closed between reports it may never show up.

Ok, that makes sense. Now to find a bank that would loan me that amount. I think I may be better going with a credit union for that one right?

[Barkeep49]

Ok, that makes sense. Now to find a bank that would loan me that amount. I think I may be better going with a credit union for that one right?
Yes.