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Posted in Auto Loans
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Jphotography96

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Looking to get a new car
I'm really wanting to get a new car, I'm 19 years old and have decent credit. Ill make enough money to qualify for the 30% rule of a car payment. And have a decent down payment. my concern is my credit history length because of my age... How likely will a bank finance me?.. I don't see why there would be a problem if I can give them the money.. any advice would be awesome, thanks

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the last few responses were on point.

if your clearing the money to pay the payments it's fine and dandy but banks go typicaly for four thing's.

1. Length of work history (if you've been at your job less than three years or your part time/full time).

2. salary (how much are you raking in).

3. credit score (isn't a huge factor all the time but will negotiate your intrest rate).

4. year of vehicle (if the vehicle is used and you dont decide to buy brand new depending on the year of the vehicle determines if they'll finance you some banks will reject certain year for example bank may not finance 05 or older if your in year 2015 for many reasons).

if you have money buy a used vehicle from someone, or worst case find a used vehicle at a dealer with a warranty and not to much of a risk of financing. like for example you have 2500.00 bucks and the used vehicle is 10,000 bucks not much of a risk compared to 2500 bucks and 25,000 bucks for a vehicle (most likely will need a co-signer for this). but in the end interest is what you have to worry about, at your age i can see a intrest rate of anywhere between 10-15.15% which doesn't look bad on paper but your wallet does the math and it is going to scream. at your age negotiation is key as well as a dependable co-signer if need be. but i suggest a used vehicle and get more work history. WORD OF ADVICE: DONT RUSH!!! take your time ask around and look into multiple sources just not 1 bank if you try to finance.

AND LAST OF ALL FULL COVERAGE AUTO INSURANCE PRICES!!!

whenever you take out a auto loan for a vehicle it is MANDATORY usually to have FULL COVERAGE UNTIL LOAN IS PAID IN FULL so also take that into consideration.

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cg2020cg

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Helpful to 4 out of 6 people

Full insurance is always mandatory when financing.  For a few dollars a month more-$10 you can purchase insurance that will pay up to 120% of the book value of the vehicle should it be demolished.  Not a bad idea if your down payment doesn't cover the immediate depreciation.  Remember you may be upside down the day you sign the papers for financing.  In other words you owe more than the car is worth.  Pay more than the minimum payment and when the value of the car is equal to what you owe on it, you can eliminate that insurance.  Always smart when buying new.

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you mean the 50/20/30 budget rule?

Helpful to 7 out of 8 people

I think all transportation expense goes in the 50%, but I guess you could slide some into the 30% as leisure and that would be legit.  But that's not the key point.  You didn't say you are making enough money, you said "I'll make enough money" ... future?  If you have a thin credit file, typical auto loan lenders are not going to give you a car loan based on how much money you think you're qualified to make when you get a job somewhere down the line, they're going to give you a loan based on how much you have been making, over the course of the past 6 months or year, or more.  There's also the question of what interest rate you'd qualify for, if you did qualify.  And take that into account for what you want to commit to.

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NEW CAR

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I was DENIED for a used car, however, was immediately APPROVED for a new car and it was the easiest process in comparison to purchasing a used car!  I MUST SAY THAT IF YOU HAVE A ZERO (0) CREDIT RATING OR A LOW CREDIT SCORE, ITS EASY AS 1-2-3 TO GET APPROVED FOR A NEW CAR.  Also, i was advised to open a checking accountt with $1,000 and apply for a credit card at the same bank, and within 6 months my credit score went from zero (0) to 780.... JUST A BIT OF ADVICE... MAKE TIMELY PAYMENTS AND DO NOT MAKE ANY CREDIT APPLICATIONS FOR AT LEAST 6 MONTHS.  Every time you apply for credit and your credit report is accessed, your credit score goes down by 4 points for each inquiry~!

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Helpful to 7 out of 9 people

Not sure what 30% rule of a car payment is,   never heard of that one and I'm 53.

as this is a Want and not a Need I would suggest you save your monies and pay Cash for the Car.

You are young,  don't get stuck in the You have to buy New.

Google  Dave Ramsey and start Reading.

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Reply by
cg2020cg

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Helpful to 4 out of 4 people

30% is an accounting/budgeting "rule-of-thumb".  Just like 25% of your income for living quarters

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Looking to get a new car

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Your short credit history won't be a big factor unless you're going over $40k for a vehicle.  The vehicle itself makes this a secured loan which is much easier than unsecured because the lending institution has some way of recovering funds should you default on the loan.  Your employment history with length of time at a job is more important than anything (besides income level meeting their criteria) and since you have a "decent" down payment you should have no trouble.  The dealers will be happy to talk.  DON'T be afraid to "walk" because they will chase you out the door to sell the car.  Ask for leather to be thrown in for free, or something significant.    They'll make the deal affordable by reducing your payment, then increasing the length of the loan.  Good luck and remember, you don't win no matter what you think.  You lose equity as soon as you drive off the lot.

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Helpful to 1 out of 1 people

have you considered car insurnance in your financial equation? keep in mind young driver + car loan = full coverage and HIGH RATES for you!!! get some qoutes first on the cars you're looking at, a 300/month car insurance may change your mind!! 

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Do Not Fail To Plan Down The Road

Helpful to 0 out of 1 people

There are numerous components to a new car purchase which have been widely covered by others. However there is a historical matter that few seem to explore and that is one of maintenance. While a new vehicle often requires less maintenance there is a cost. And as most new cars require periodic dealer maintenance in order to keep the warranty valid these costs can be a significant expense. What I recommend is that you take a course in auto mechanics to learn the basics of automotive engineering and repair. While you may not perform all the maintenance yourself, you will establish a knowledge base on which to build an understanding of what various maintenance procedures should be and thereby not be lured into expensive unnecessary maintenance. In addition you will be able to appreciate and retain a higher level of satisfaction with your vehicle selection, reliability and performance over time.

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