I’ve decided I want to get an 07-08 Acura TL for my first car purchase and would like to keep the total cost including taxes and fees under $18,000. I know I could get newer cars with really low miles for less than that, but I’ve always wanted a 3rd gen TL so I’m pretty dead set on this. And now I just have to shop around for a loan at a good rate.
Here’s my situation:
I’ve been building up a good credit history over the past year with a secured Capital One card and their credit tracker says I’m at 734. I have no debt and as much as $4,000 to make a down payment with. I’ve lived at my current residence for more than 5 years, but plan to move shortly after getting the car. I’ve been employed for the last 7 years straight, but have only been at my current full-time job for the past 4 months.
So where should I be shopping for a loan, and how low of a rate can I expect to get? How much leeway can I expect on the age, mileage, and place I purchase the car? I know a lot of the big companies giving out used car loans set restrictions on these things, such as requiring the car to have less than 70,000 miles or requiring that it only be purchased from certain types of dealerships. I’d prefer to be able to purchase a car up to 100,000 miles and from whichever dealer or person I find the best deal from. I’ve been getting a lot of offers for a Discover card, so would it help or hurt my chances at all of getting approved for an auto loan if I applied for the card as well?
It would be best to get a pre-approval from a local bank or credit union and always try to avoid any dealer financing or very long financing terms such as 7 years, etc.
Just my 2 cents, but there’s too much emphasis on credit scores. A high credit score often means debt that is being paid regularly. That may be fine unless something happens that upsets the apple cart.
I would avoid applying for any cards or credit anywhere. Everytime something like this is done your credit report gets dinged so to speak even if you forego the card or other transaction involving credit.
A bank or credit union will look at that application as someone possibly stepping in over their heads and getting credit hungry.
I agree with the above. Applying for a card now won’t do you any good and may do you harm by making it look like you’re planning on spending more. Your high credit score, adequate down payment, and lack of debt make you a very attractive risk. You look conservative in your spending, just what a lender likes to see. As for where you’re going to get the best rate, that’s hard to predict and you might as well just start asking. Local credit unions and smaller banks are often a good bet, but it doesn’t hurt to ask the dealers what they can come up with if you don’t mind some wasted time while they try to break down your resistance. If it’s getting too silly just get up and go, letting them know you value your time even if they don’t. They know how to reach you. You can do most negotiation of price and terms via e-mail these days.
I like that TL, too. It’s a very distinctively styled car and should be good for a lot of miles. I wouldn’t necessarily buy one if I had a long commute, because the gas mileage is nothing special, but if you won’t put on too many miles per year, it’s a sweet car. Enjoy.
@AntonioKat:
You seem worried about saving a few dollars by trying to get the best loan rate. But in another tread, you’ve pretty much decided to commit to buying an Acura TL before you can see and test drive it, and get it inspected.
Be careful about the energy you invest in saving a few dollars on a loan, only to lose major bucks on buying a 7 year old car sight-unseen.
You only get low rates on used cars less than 3 years old. A prepaid card means almost nothing for credit rating. Also why would you want the added expense of full coverage insurance on a 7 year old car?
Check any credit unions that you might be eligible to join.
It’s been a long time since I took a car loan, but it wouldn’t surprise me if you had to take a personal loan instead of a used car loan for a car that old. I hope you’re planning on a loan of no more than four years (and preferably less than that). You really don’t want to count on a car having to reach twelve years old before you can get it paid off.
Keep in mind that the car you buy may very well be due for a timing belt immediately. If so, allow for that in your budget.
If you have a parent or friend who owns a home and will co-sign a personal loan with you (forget the car loan) you may get a low rate and have complete freedom in your car shopping. Also no need for full-coverage insurance, a big bite…By the looks of the market, you are not the only one who has fallen in love with an Acura TL…
@Caddyman
The bank will still require some kind of collateral to give the load out, regardless of what it’s being used for. If you use the car’s title for the loan as collateral, you’ll still need full coverage on it.
I lucked out in my search for a good rate as my town has just about every major bank there is in town. I searched online and called a couple banks to ask when I couldn’t find their rate online. Some offered lower rates if I had an account at their bank. In the end, though, the dealership was able to find me a lower rate than I had found at the one bank in town I DIDN’T look at.
Granted, I was shopping for a new car loan and not a used car loan.
Here is an Acura on steroids you can pick up for the money you have saved for a down payment…The LX models, quieter, smoother, softer, sell for about the same money…Think outside the Acura box if you don’t have the money for one…
With so many ads for 0 or 0.9% on new cars, I will reconsider the used car purchase. I will also reconsider the Acura choice. Maybe a higher trim Honda, brand new, would have the same monthly payments and last you longer.
From a pure financial standpoint, if you don’t have 8 months of emergency savings, then you don’t really have a down payment. But I hope that is not the case here.
Some credit unions seem to be a little more flexible than others as far as age/miles (navy federal for one) but you’ll have a much easier time buying from a dealer that the credit union has a relationship with. Capitol one appears to put a 7yr age limit on used car loans. Most credit unions only require that you live in that area/state to join.