bassist1217

i apologize for posting in the wrong section, but this 50-post limit thing...yeah...anyways...here goes...ok, i'm looking to buy an xB. i already know what i want: black sand pearl, 5-speed, lowering springs. catch: i'm 18. i have no credit. is it going to be possible for me to either a. get a loan, or b. finance this car on my own. i am driving a 98 mustang now with 93,000 miles with a trade-in value of $3500.

SciontCya

NO credit is not as bad as bad credit.
Do you have a job?

Scott

rbloedow

Nope - you're going to have to find a cosigner for your loan (IE - someone with credit who will have to enter on the loan with you). The vast majority of institutions are not going to give you a loan if you have no credit, and those that will are going to RAPE you when it comes to your finance rate.

bassist1217

yes, i have a full-time job. and i went by the honda lot today because there's not a SCION lot here in town, and was looking at the xB they have there, and i started talking to one of the salesmen, and he told me that they could finance it without me having to have a cosigner, even though i had no credit. he said the interest would be a little higher, but they still would finance to people like me. (i paraprashed) yay! i should be heading to a SCION lot soon to order my xB. (as soon as i can get the mustang signed over into my name)

rbloedow

You're going to be looking at double digit financing rates if they do approve you. They're going to have to run your credit - don't start jumping for joy until you sit down and look at the numbers. If you get approved - think about how much you're going to actually be paying jsut to have a new car.

bassist1217

well, when i figured my stuff up with the loan calculator, i figured it with a 15% interest rate, then a 20%. it shouldn't be higher than 20%, right?

tanakasan

Hope not!

I had a friend that was surprised that the Honda dealer financed him. I was surprised that it was a 24% loan!

Read the fine print!

khaye

for a first time buyer your best bet will be going through your own bank and getting a PAL. as far as dealership financing haggle with the apr the first figure that they give is not always the lowest

TequilaBox

I had the same prob back when I was 20. I had no credit at all. I had a huge down payment too, and they still jacked me. 20k car with 12k down, so my loan was for 8k at 21%. My monthly payment was liek 198/month, but 100 of it was going towards intrest only! heh. Thats what happens when you don't have a co-signer....

After 7 months, I was able to refi it down to 14% still pretty damn high. Luckily after a couple months paying that, my sister loaned me the rest of the money to pay it off. Then I just payed her off.

Tool7f

I just bought my scion in december, and financed it through the dealership. I didn't have a cosigner, and put down 5k for the deposit. I too have very little credit, but the credit I do have is perfect. Through toyota motor credit, I got 10.5% apr on a 60 month for the 13k I had to finance. All TMC does is use your credit score. If you know what your credit score is, then you can find out what sort of rates you'll be looking at if you have a cool dealer who'll sit down and talk to you about it. Good luck!

BlkBox

You don't have to worry about not getting credit, or approved. You need to worry about your APR and what its at. For starting out you may get a double digit, but you can refinance after 6 consecutive payments that are ontime. They will usually lower it almost 1/2. We purchased our first xB with no credit and very bad credit, and recieved 18%; then refinanced and recieved 4.9%. Purchased 2nd xB and are at a 6% apr on that one....Its all in how you talk to them; how much $$ you bring with you; and you can always limit the options you want on it. Or ask the dealership to Pre-Qualify you for what they can thru whatever financial institution and then built from there. Hope this helps...and GOOD LUCK!

khaye

totally forgot to ask if you were a student...dealerships sometimes have a program that qualify students for a lower apr

Spr0ket

How to build great credit very fast.

1: Get 1000 dollars somehow (you will be able to repay lenders within a day)
2: Go to ANY bank and ask to setup a secured signature loan for $1000.
3: Using the loan, repay anyone you had to barrow money from to get the ball rolling.
4: Make payments every month to the $1000 loan and don't miss a payment.
5: Repeat the process with two other banks.

Doing this will establish good credit at three banking institutions. If you can afford an extra $90 a month, do three banks at the same time. Just keep using the $1000 loan money you get until the three banks have given you the secured loan. I started with a bad credit score and couldn't get a loan if my life depended on it. Now I've got great credit and can get almost any interest rate I want.

As an added bonus, once you have the loans paid in full, you still have the secured funds in the bank so you get your money back after it's all said and done. Right now, the highest yeild on a secured loan is with an 18 month CD at most banks.

Minttoast

I was in the same boat only my mom jacked my credit score by putting an electric bill in my name. I was 16 and told I owed $1,000+. When I hit 18 I had bad credit and toyota gave me the loan at 11.5%(mostly becuase i know someone there). With 1500 down at 11.5% I'm paying $348 for the next 72 months. Although I now have good credit thanks in large to the car, I might of calmed myself down and held out. I'm getting to a point where i regret $348 a month, every month for the next 60 some months.

It all depends on you and what you have to pay for. If you can afford a big monthly bill every month go for it, if not build up your credit first.

BlkBox

mint was that on a stock xb? or did you add on options...

cliffy1

here's the deal. I am not only a salesman and manager, I am also the finance guy for Scion at my dealership. I run into this every day. There's two ways to do this:

1. Get a cosigner. Your buddy, boyfriend/girlfriend, or your cousin are not cosigners. Your parents or somebody living with you is a co-signer. If you get a co-x, you get to use their credit score to determine your rate tier. If they have a score over 690, you get a rate of 6.25% (current rate in the Central Atlantic Region with TFS). You still get full credit for the purchase on your credit report. It builds your credit just as quickly as if you did it on your own. This option usually requires a lot less money down and you don't have to provide a bunch of extra information to get the loan.

2. The first time buyer alone. This option is going to be more painful, but can be done. First, you have to put more money down. You need to be financing no more than 90% of the car's invoice. That means you have to cover your taxes, tags and the car's mark-up plus an additional 10%. On an xB costing $15370, you can finance up to $13180. If your taxes and tags are $1000, you have to put down about $3200. This is a minimum and some deals may require more.

Next, you're going to have to provide "stips". That means you need proof of income (current check stub with year to date earning), proof of residence (lease with your name on it or utility bill in your name), copy of a bank statement and 5 personal refrences.

Finally, if you do all of that, you'll get approved on a Zone 4 rate. This is the lowest rate tier and therefore, the highest rate. Right now, that rate is 14.50%.

If you go with the first time buyer's program, you need to do a couple of things. First, get two credit cards. Once you have a car loan, you'll get offers in the mail pretty quickly. Take two of them. Don't use them! If you do use them, play them off every month. With two credit cards and a car loan, you'll have a credit score over 700 within a year. At that point, you should be able to refinance at your bank at a better rate.

I hope this helps.

Tool7f

Cliffy1:
That's some great info. I'll certainly look into this. Question though. I'm 21. I was a first time buyer in Dec (yes a month ago). I've had a single credit card for less than a year, with a very low limit. I think my score was 625. Yet I got 10.5% financed through Toyota. Did I just get lucky?

davedavetC

iTrader: (4)

i went to a scion dealership and i didnt have any previous credit history (that i knew of) but i ended up getting a 6.20% APR which im not complaining about. (and thats with a $500 down payment) and i was 19 when i got my car. but i donno how its gonna work for you. but 15 or 20% seems WAY too high. id look other places. idk if it could be the fact that your buying from a honda dealership.... try lookin for a scion/toyota dealership. just me 2 cents.

kzhorse

My credit wase'nt that bad and I was able to finance about 125% with no money down with a rate of 3.9% (I owed I think $3400 on a S-10 I traided in) Toyoda didnt like it but to bad.They sent me a letter telling me that my loan was denied,But I already took delivery so I kept it.

Scott

xActly

One more thing to consider - Scion's pure pricing is such that they can't inflate the cost to make up for a crappy trade.

My point?

You will never get $3500 for a 98 Mustang with 93,000 miles from a Scion dealer.

You'd be better off trying to sell it yourself. That falls into a wholesale category - $1500 sounds more like what you can expect on trade.