My situation at the moment is that I am going to be purchasing a car within the next 2 weeks, at about $15,000. I have the $15,000 to make this purchase, so I wouldn't need to finance at all. However, I am still sort of young credit wise (22yrs old), and my highest dollar amount on my credit is a private student loan for around $6000. Would there be any advantage or rather, would I see a sizeable credit score gain, if I financed this purchased and paid it off in a few months? Sorry if this is a dumb question, but please respond if you ahve any advice! Thanks!
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sedonaGal
Member
posted: Jul. 8, 2006 @ 8:22p
pay cash if you can! no need to pay loan fees to initiate the loan, pay non-tax-deductible interest, or go through the hassle of loan stuff.
fat419
Senior Member
posted: Jul. 8, 2006 @ 8:26p
if you qualify for 0% financing, get a loan and invest your $15k, otherwise pay cash also learn to haggle, visit edmunds.com or search the forums ref buying a car
rigor
Senior Member - 9K
posted: Jul. 8, 2006 @ 9:01p
it has been noted that the prior auto loan was a qualifying event to preferred financing rates by my CU. They mentioned that i should have about 40% prior loan of auto installment type on credit record to achieve the highest new car loan rate possible. Fortunately I had just this.
YMMV. Showing you can pay off a large installment loan will influence future car financing and definitely have a positive advantage in mortgage.
if you can handle a 42K BMW 39month loan, suffice to say you can probably handle a mortgage quite well.
make sense?
bagofcrap
Senior Member
posted: Jul. 8, 2006 @ 9:11p
fat419 said:if you qualify for 0% financing, get a loan and invest your $15k, otherwise pay cash also learn to haggle, visit edmunds.com or search the forums ref buying a car
Then he won't get the rebate. Usually you get either 0% OR Rebate of 2-3k.
skwiggey
Senior Member - 2K
posted: Jul. 8, 2006 @ 10:29p
fat419 said:if you qualify for 0% financing, get a loan and invest your $15k, otherwise pay cash also learn to haggle, visit edmunds.com or search the forums ref buying a car Actually use opportunity cost analysis on this one. If you can finance at less than the going rate for risk-free investment minus taxes, etc..then finance it! So if you can get a 3% loan for instance, take it and invest the money. Makes you credit better too!
skwiggey
Senior Member - 2K
posted: Jul. 8, 2006 @ 10:30p
dp
hurricanedarby
Member
posted: Jul. 8, 2006 @ 11:48p
Good, yet conflicting advice. I guess I should've put more info. My credit score is average (670 Trans and Equi, 690 Experian), so I doubt i'd get a great financing rate. There are no rebates or incentives with the car though, so i'm not losing any money by financing. With this NEW information, should I stick with the advice given, or is there anything different I should know? Thanks again everyone for your help!
redsox9547
Senior Member
posted: Jul. 10, 2006 @ 9:08a
If you pay cash for the car and the car gets stolen/totalled you will take a loss. Insurance only covers the ACV (actual cash value) of the car. If you can get a loan that offers some kind of GAP protection (guaranteed asset protection) for free (from like USAA FSB) and the car gets stolen/totalled you will have the amount you haven't paid still in cash and the car will be paid off (minus deductible)...so for that reason, I'd say finance in addition to the fact it builds your credit and you can do other stuff with the cash.
SUCKISSTAPLES
Charter Member
posted: Jul. 10, 2006 @ 9:17a
hurricanedarby said:Good, yet conflicting advice. I guess I should've put more info. My credit score is average (670 Trans and Equi, 690 Experian), so I doubt i'd get a great financing rate. There are no rebates or incentives with the car though, so i'm not losing any money by financing. With this NEW information, should I stick with the advice given, or is there anything different I should know? Thanks again everyone for your help!dont do it.
Youre paying for a positive tradeline, not necessary.
Well do you anticipate needing the money for anything else? Are you thinking of grad school, traveling, or renting your own place? How much money do you have saved up? Is 15k your entire life savings (impressive for a 22 year old) or do you have a lot more?
animedj
New Member
posted: Jul. 10, 2006 @ 9:50a
Well, if you are going to buy it cash, why don't you use a CC that has some kind of CashBack, so that way, atleast you get something back.
blueiedgod
Senior Member - 3K
posted: Jul. 10, 2006 @ 9:50a
I bought my last car via finance. A lot of times dealers get kickback from the finance institution which you can negotiate into the bottom price of the car. Also, at the time, the savings Interest rates were at mid 3% (ING) and my interest rate on the car was 1.9%, so it made more sense to use their money.
kamalktk
Ancient Member
posted: Jul. 10, 2006 @ 9:52a
WOW! SIS out of retirement!
VirginiaBob
Thrifty Member
posted: Jul. 10, 2006 @ 9:57a
Pay the student loan and buy a used vehicle with low miles and kill 2 birds with one stone.
DietWater
Ancient Member
posted: Jul. 10, 2006 @ 11:34a
Welcome back, SiS.
SUCKISSTAPLES said:hurricanedarby said:Good, yet conflicting advice. I guess I should've put more info. My credit score is average (670 Trans and Equi, 690 Experian), so I doubt i'd get a great financing rate. There are no rebates or incentives with the car though, so i'm not losing any money by financing. With this NEW information, should I stick with the advice given, or is there anything different I should know? Thanks again everyone for your help!dont do it.
Youre paying for a positive tradeline, not necessary.
pay off your student loan, buy a $9k used honda or toyota. it will be 5 years old, still running great, but property taxes and insurance are cheaper. with no loan on the car, you can get liability only or whatever your state's minimum requirements are.
zzyzzx
Senior Member - 3K
posted: Jul. 10, 2006 @ 3:39p
Squeezer99 said:pay off your student loan, buy a $9k used honda or toyota. it will be 5 years old, still running great, but property taxes and insurance are cheaper. with no loan on the car, you can get liability only or whatever your state's minimum requirements are.
I agree except advise buying a beater instead of the $9000 car.
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