Edmunds Answers



  • boomchek 04/12/10 3:58 pm PST

    Yes, the info you were given is correct.

    Although it seems like it should be easier to get approved on an older vehicle that costs less, that's not the case because it's more of a risk to a bank because older vehicles are more prone to breakdowns and repairs, and if the person financing the vehicle is a credit risk already, chances are they won't have money for those repairs. And a non running vehicle that needs work is pretty much worthless if it would need to be repoed.

    That's why most banks prefer to finance newer vehicles over a longer term, rather than older vehicles, because newer vehicles have warranty coverage and are easier to resell if a repo needs to be made.

    Your income and credit score are not the only factors that determine how much you'd be approved for. Your monthly obligations play a big role in that too. If you make $3k/month but have rent/mortgage and minimum credit card payments, those all add to your income to debt ratio. The more obligations you have the less you have left for a car payment.

    Without seeing your credit history, I say your best chance is to get approved on an inexpensive new/newer car like a Hyundai Accent or Kia Rio. It'll cost little, and have warranty,

    Good luck.

  • knowledgepower 04/12/10 4:21 pm PST

    The dealership did tell you correctly as posted, they want a newer vehicle 3 or 4 years old because they look at how old the vehicle will be at the end of the loan also. The $12-$13k figure is about right but the $300 payment may be a little tricky but you are close. It may require you to be a little more flexible and be prepared for around $350 because of your credit score but with a 600-670 it's a loan that can be gotten with a 2006-2007 or better. Your trade can be used because some dealers can show MSRP and show a trade allowance not actual cash value for your car which can also count as trade equity. Another alternative is they can get you into a small 2010 with a rebate, anything's possible. There's a deal out there but do your research on Edmunds.com for small vehicles and decide where you want to go. Wherever you went and you were told it's possible with a 3 or 4 year old vehicle go there first. See if they can get you financed,if they do it will probably be a spot delivery based uon what state you're in. In that situation don't do anything to the vehicle,no window tint or added equipment until you have been contacted by the bank or sent a payment book. On extended warranties only basic engine, powertrain,and transmission regardless of what finance sells you on. Make sure it's the manufacturers' extended warranty again regardless of what they tell you in finance. Don't let them tell you they did you a favor in getting you financed because someone else can and will,too. Good luck to you and take what you can use of this info. All of this stuff I'm sharing came from the inside because I was there.


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