NT, Help Me Out - School Me On Auto Loans

c o ivi p l e x

c o ivi p l e x

1,497
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Joined
Dec 5, 2007
some quick information about me, i'm 21, make $35k a year, got $5500 to put down on a '05-'06 acura RSX type S and looking to spend no more than $11k. my transrisk credit score is 688 (i know it's not the most accurate thing ever but most users report that their actual FICO scores are about 20-30 points higher than their transrisk score) and i'm looking to pay of the loan within 12 months ideally.

here's where i'm lost, i don't know where to get an auto loan from, i was thinking about going through my bank (bank of america) but they have some weird stipulations like the car not being able to be more than 7 years old etc and the minimum loan amount is $7500, i obviously don't even need that much. most places i looked usually have 24 month terms but i'm trying to pay it off sooner, are there any consequences of paying more than your normal monthly payments and paying off a car sooner than what's stated in the terms? based on my situation where would you guys recommend i get a loan at? and i know some of yall might say just finance through whatever dealer i get it through but i'm actually looking at some private party cars as well so i want to keep my options open.

i know there are some finance gurus on NT so please help! thanks in advance for any legitimate advice.
 
my only other expense is $500 in rent/utilities. that leaves me with $1900 every month....and i shouldn't be considering taking out a $5k auto loan? i'm not trying to buy brand new....
 
Originally Posted by DCAllAmerican

If you are only making 35K then you shouldn't be thinking about this. Bad mathematics.
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how so? you know nothing about him and his other expenses
 
Yea right now, but after about 8 months of paying for a car you will feel the wrath. Trust me man, it isn't worth it. Just because you have it doesn't mean you should spend it.

No, an auto loan. No. You shouldn't be doing that. A loan for a car? A car isn't that important to the quality of life.

It is a car.
 
don't listen to all the financial experts on Niketalk; you aren't trying to buy a Bimmer and the RSX is a great car (had one for 6 years)
you should go through the pre-approval process with a couple banks and compare...try Bank of America; my rate is 3% with them or you can try a local credit union.  Most likely you are going to get a 7-8% rate with a credit score of 688; at least with most places so def. look around.
 
after 8 months of paying it i hope to be done within another 4 months, i don't think i would regret it that far in? and ideally i'd just continue to save until i can buy the car in cash but it's getting bad as i don't have my own car right now, i use my dads car to go to work and my girl drives me around everywhere else and i think we are both getting tired of that.
 
Originally Posted by C o IVI p L e X

after 8 months of paying it i hope to be done within another 4 months, i don't think i would regret it that far in? and ideally i'd just continue to save until i can buy the car in cash but it's getting bad as i don't have my own car right now, i use my dads car to go to work and my girl drives me around everywhere else and i think we are both getting tired of that.
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don't listen to him
if you put $5k into the car and finance $5k total at a rate of 6% (may even be able to go lower in this economy) then you would have a payment of $115 a month.   
 
i was thinking about applying around but the thing is i don't want them all to have a hard inquiry on my credit, that's why i was hoping the one place i apply is the place i go for but i just don't know where that place is since most of these banks all have stipulations like minimum loan amounts and how old the car can be.
 
Between the car loan lets say for arguments sake he is going to pay it off within a year. 5k loan assuming 7-8 percent interest based on your score, 450 per month range. Then gas, another 200 at least, insurance, I'm assuming you are young so lets say another 200. Lets say for that one year you are left with only 900 a month left to spend on food, going out, clothes, etc. Is that comfortable? To me that isn't. Just save up till you have the cash and then all you will be spending is 500 for gas and insurance a month. No need to do this at this moment. Patience brah. Patience.
 
Originally Posted by Air Spider 777

Between the car loan lets say for arguments sake he is going to pay it off within a year. 5k loan assuming 7-8 percent interest based on your score, 450 per month range. Then gas, another 200 at least, insurance, I'm assuming you are young so lets say another 200. Lets say for that one year you are left with only 900 a month left to spend on food, going out, clothes, etc. Is that comfortable? To me that isn't. Just save up till you have the cash and then all you will be spending is 500 for gas and insurance a month. No need to do this at this moment. Patience brah. Patience.
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where do you do your math?
OP if you finance a car for $5k and just let it ride straight out for 4 years then you would pay a total of $650 in interest which is $162.50 a year...Niketalkers would want you to think they are going to turn that saved money into millions but in reality they will just blow it so go ahead and look for that car loan.
 
Originally Posted by Air Spider 777

Between the car loan lets say for arguments sake he is going to pay it off within a year. 5k loan assuming 7-8 percent interest based on your score, 450 per month range. Then gas, another 200 at least, insurance, I'm assuming you are young so lets say another 200. Lets say for that one year you are left with only 900 a month left to spend on food, going out, clothes, etc. Is that comfortable? To me that isn't. Just save up till you have the cash and then all you will be spending is 500 for gas and insurance a month. No need to do this at this moment. Patience brah. Patience.
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$200 in gas? seriously? if i spend that much in gas i'm just going to stop driving....and $900 a month still seems like plenty for miscellaneous expenses but i'd still want to put some of that away into a savings.
 
Originally Posted by C o IVI p L e X

after 8 months of paying it i hope to be done within another 4 months, i don't think i would regret it that far in? and ideally i'd just continue to save until i can buy the car in cash but it's getting bad as i don't have my own car right now, i use my dads car to go to work and my girl drives me around everywhere else and i think we are both getting tired of that.
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Trust your gut. We are talking about being car-less. Not homeless or food-less. Just keep saving up and you will eventually get there.
Do you have enough saved up so that if you didn't work for 6 months you would be ok? If not, I don't see why you would take out a loan for a car at this point. 

I know you want your own car but see the big picture. You are only 21, you are cool man. No rush.

Originally Posted by Air Spider 777

Between the car loan lets say for arguments sake he is going to pay it off within a year. 5k loan assuming 7-8 percent interest based on your score, 450 per month range. Then gas, another 200 at least, insurance, I'm assuming you are young so lets say another 200. Lets say for that one year you are left with only 900 a month left to spend on food, going out, clothes, etc. Is that comfortable? To me that isn't. Just save up till you have the cash and then all you will be spending is 500 for gas and insurance a month. No need to do this at this moment. Patience brah. Patience.
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laugh.gif
 Funny numbers. 
 
since most of these places have a minimum loan amount of $7500 could it be possible that i just take that and i use the extra $2k that i'd have left in cash and just turn around and immediately put it towards the car loan so the balance that i'd be working to pay off is $5500?
 
Originally Posted by StillIn729

Originally Posted by Air Spider 777

Between the car loan lets say for arguments sake he is going to pay it off within a year. 5k loan assuming 7-8 percent interest based on your score, 450 per month range. Then gas, another 200 at least, insurance, I'm assuming you are young so lets say another 200. Lets say for that one year you are left with only 900 a month left to spend on food, going out, clothes, etc. Is that comfortable? To me that isn't. Just save up till you have the cash and then all you will be spending is 500 for gas and insurance a month. No need to do this at this moment. Patience brah. Patience.
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where do you do your math?
OP if you finance a car for $5k and just let it ride straight out for 4 years then you would pay a total of $650 in interest which is $162.50 a year...Niketalkers would want you to think they are going to turn that saved money into millions but in reality they will just blow it so go ahead and look for that car loan.
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I'm going by that the OP wants to pay off the vehicle in the year. That's how I get my math.

Plus why would you let it ride out by the time the car is paid off its a 11 model year old vehicle?

It's not about turning that saved money into millions, its knowing how to manage your money.

And OP you're going to spend that in gas per month.

Just wait till you have the cash bro.
 
Originally Posted by Air Spider 777

Originally Posted by StillIn729

Originally Posted by Air Spider 777

Between the car loan lets say for arguments sake he is going to pay it off within a year. 5k loan assuming 7-8 percent interest based on your score, 450 per month range. Then gas, another 200 at least, insurance, I'm assuming you are young so lets say another 200. Lets say for that one year you are left with only 900 a month left to spend on food, going out, clothes, etc. Is that comfortable? To me that isn't. Just save up till you have the cash and then all you will be spending is 500 for gas and insurance a month. No need to do this at this moment. Patience brah. Patience.
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where do you do your math?
OP if you finance a car for $5k and just let it ride straight out for 4 years then you would pay a total of $650 in interest which is $162.50 a year...Niketalkers would want you to think they are going to turn that saved money into millions but in reality they will just blow it so go ahead and look for that car loan.
Click to expand...
I'm going by that the OP wants to pay off the vehicle in the year. That's how I get my math.

Plus why would you let it ride out by the time the car is paid off its a 11 model year old vehicle?

It's not about turning that saved money into millions, its knowing how to manage your money.

And OP you're going to spend that in gas per month.

Just wait till you have the cash bro.
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you don't seem to even understand fiances at all; managing his money...is an extra $162.50 a year going to leave him homeless?  
financing $5k for a dependable car > buying a car with $5k that will have high miles and problems or having to ask pops for his keys
 
I know it is a side argument but we have to know how often/far dude is driving to spend $200 in gas a month. I don't even think I do that in 2 months. LOL. But then again, I catch public transportation to work.

I just believe in playing it safe with your money. I don't see how taking out an auto loan is playing safe.

Stylin seems to be more concerned about the actual car he is interested in instead of the financial situation.

I don't know, I just don't like suggesting to young people to take out a loan if you can avoid it.
 
Stylin: You dont seem to understand what the OP is saying. HE WANTS TO PAY THE CAR OFF WITHIN A YEAR!!!! If he wants to do that with a 5k loan he's going to be paying anywhere from 400-500 dollars per month on the car. Then including gas (200), insurance (200-250). So he'll be spending somewhere in the neighborhood of 1000 a month for the car if his main goal is to pay it off within a year. Dude why are you looking to argue with me on this when I am just basing it off what HE IS SAYING? The kid for that first year is going to be left with 900 a month to go out, spend on food and he wants to put some in savings. Not going to happen.



I dont understand finances at all? I do it for a damn living. And when you tell someone that they dont understand finances at all, maybe you should know how to spell it first.
 
Originally Posted by DCAllAmerican

I know it is a side argument but we have to know how often/far dude is driving to spend $200 in gas a month. I don't even think I do that in 2 months. LOL. But then again, I catch public transportation to work.

I just believe in playing it safe with your money. I don't see how taking out an auto loan is playing safe.

Stylin seems to be more concerned about the actual car he is interested in instead of the financial situation.

I don't know, I just don't like suggesting to young people to take out a loan if you can avoid it.
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no I hate when NTers are all financial experts on matters; he is using his dad's car for one which as a 21 yr old sucks

the RSX is a quality car that has very minimal problems so it's a good choice to take out a small loan

in my situation I laid out for him it would be 4% of his monthly gross income; I think he will be able to manage
 
Originally Posted by Air Spider 777

^ You dont seem to understand what the OP is saying. HE WANTS TO PAY THE CAR OFF WITHIN A YEAR!!!! If he wants to do that with a 5k loan he's going to be paying anywhere from 400-500 dollars per month on the car. Then including gas (200), insurance (200-250). So he'll be spending somewhere in the neighborhood of 1000 a month for the car if his main goal is to pay it off within a year. Dude why are you looking to argue with me on this when I am just basing it off what HE IS SAYING? The kid for that first year is going to be left with 900 a month to go out, spend on food and he wants to put some in savings. Not going to happen.



I dont understand finances at all? I do it for a damn living. And when you tell someone that they dont understand finances at all, maybe you should know how to spell it first.
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I typed on my phone and corrected 
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 stop trying to use that as a counter argument...I do it for a living as well and like I said my situation puts his car payment as 4% of his income
I just explained he doesn't have to pay it off in a year but you are telling him to save and pay it out right...please explain the difference if he saves the $5k in a year and buys it out right or finances the $5k and pays it off in a year...that scenario means he paid $162 roughly to get the car now instead of waiting 
 
It sounds like you're pretty set on going in to debt for this car even though it's not the wisest idea.  A car is a depreciating asset.  If you have $1500 left over at the end of the month then you can wait and pay cash for an RSX in only 3 months.  It will feel much better than making payments because you have put a lot more effort into achieving your goal instead of taking the easy route.  Stillin729 may be right about it's "only" $162/yr. in interest but when I do math like that, would I rather throw it away on a car, or could I use that to go on a date and invest it into the relationship instead?  Or could I buy a new pair of shoes?  Then at least you'll have something to show for your money.
 
My point for not wanting him to let it ride like you said, is based on the vehicles age. I wouldn't want a vehicle I have paid off when its 11 model years old. My point for him not taking out the loan is because as a 21 year old, making 35k, you dont want yourself locked into a monthly debt. If he is saving the money, he isnt contractually obligated to do so. So if something comes up he's alright. If he is in a contract to make the payments, lets say he gets laid off, which given in this economy young, entry level jobs are dropping like flies, he's has a problem. To me at that age/salary range (not being an #**!@@% op), I would just wait till I have the cash.


Then again Stilln, Flyers fans and Rangers fans never agree do they?? LOL! No hard feelings brah.
 
Originally Posted by Air Spider 777

My point for not wanting him to let it ride like you said, is based on the vehicles age. I wouldn't want a vehicle I have paid off when its 11 model years old. My point for him not taking out the loan is because as a 21 year old, making 35k, you dont want yourself locked into a monthly debt. If he is saving the money, he isnt contractually obligated to do so. So if something comes up he's alright. If he is in a contract to make the payments, lets say he gets laid off, which given in this economy young, entry level jobs are dropping like flies, he's has a problem. To me at that age/salary range (not being an #**!@@% op), I would just wait till I have the cash.


Then again Stilln, Flyers fans and Rangers fans never agree do they?? LOL! No hard feelings brah.
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 I feel you man I just don't think it's a bad move on his part but to each their own
I can't imagine being 21 and having to borrow my pops whip when I need to get around 
 
eh i think you should look for a lower priced car. $5500 is enough to buy a decent used car
 
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