Low Credit, High Down Payment. Odds Of Approved Auto Loan?
I'm currently in the market for a truck upgrade. My Ford Ranger simply can't hold up to the work load it has, and what I need to be able to do (Haul apple bins, horse and flat bed trailers) It is a nice truck for its age. I do not want to ruin its value by running it into the ground.
I have relatively new credit, I have only one line open (Les Schwab tires) and a current score of 589. Not one late payment.
With the intent to sell the Ranger, and payoff the tires I plan to have a 4000-5000 down payment on the vehicle I choose. The max I will be spending on this new truck will be $9000. I plan to buy used. I don't need fancy. Just a little newer, space, and able to haul and hold up to the work load it will have. Something I can use for a while. I just feel anything newer would be out of my monthly price range. I would like to keep payments under 200. Simply to give space for emergencies.
I make around $1000 a month before tax. However, I work as a horse trainer, and do a various amount of jobs for locals that can gain me anywhere between $600-800 a month on top of my normal wage.
I would like to know my odds of an approved auto loan with the above information. I'm still very green to credit, learning how it works and the best way to build/use it. Any advice is apprentiated. I just want to get some information/ideas before I start walking into banks or dealers!
You can't afford a car payment yet. You need another year to build your credit, and at least another job to jump your income above $1500 take home to be properly qualified. Don't even think about it until your credit score is over 700. Stick with short term financing, store credit, 90 day/180 day/1 year same as cash, and pay them off in 60 day, 120 days, 10 months. Pay yourself $150 every week - deposit into a savings account. In a year, you'll have $7800 to add to the $5000 you plan to use and buy the truck.
If you attempt to by the truck, you'll be saddled with a 17-20% interest loan, forced to pay over at least 6 years (72 payments) and spend more than $111 a month, yielding almost $8000 - 3000 in interest for $5000 loan.
Believe me, you really do want to wait. Personal experience, just exiting from 5 years chapter 13, because of poor decisions like the one you are intending to make set us on the road to more personal debt than we owed on the house, before a 9 month job loss, followed by a recession, got a job for a year, then lost another when the job was shipped overseas. Out of work for another 6 months sending us into a spiral we couldn't escape from. You don't want to become a slave to the bank, borrowing long term, and being largely upside down, owning more on the vehicle than it's worth for much of the time you own the loan.
Save the money, pay cash, and build your credit slowly, not by financing a vehicle, if you can avoid it.
Almost no chance without a cosigner with strong credit or a predatory subprime lender.
Lenders want full time jobs with income over $1700 a month from the full time job.
Lots of "we finance anyone" car lots will finance you. But they jack up the prices and charge very high interest.
So either pay $4000 cash for a car or get a strong adult cosigner and finance with a credit union or bank. NOT a buy here pay here dealer and NOT a subprime lender at a regular dealer.
http://www.badcreditcash.net
Almost all automotive lenders will tell you, you really don't have any credit history; which will make financing difficult. You best bet is to find a used car dealership (not branded), and bring up your large down payment. You may still need a co-signer.
"a current score of 589"
This already puts you in the market for a sub-prime rate.
"The max I will be spending on this new truck will be $9000."
The ONLY things that bring the value of a truck down this far is years and miles. With the years and miles being this high, chances are you're NOT going to be able to finance it at all, and if you do, for a very short term. This will take better credit than you have.
"I would like to keep payments under 200"
Not gonna happen. You're looking at a full-size truck. Even if you got 36 months, that only pays $7200. That is after tax, title, and license. That means you'd get a $6000 truck, plus fees. No way you get this vehicle financed.
"I make around $1000 a month before tax. However, I work as a horse trainer, and do a various amount of jobs for locals that can gain me anywhere between $600-800 a month on top of my normal wage."
Lenders look for no less than 6 months of uninterupted full-time employment history, and a minimum VERIFIABLE income of $1700-$2000. If you get paid $1000 a month, and can show your pay stubs, this won't do it. Unless the additional income is steady, and provable (meaning that you pay taxes on it, and it's not cash under the table), then it will not be considered.
Based on what you're telling us here, it's not at all possible for you to finance a truck.
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