Thu 6 May, 2004 12:53 pm
Can anyone give me some ballpark figures for an interest rate (Auto Loan) in the US?
I've practically no credit history (just one account shows). I'm about to start shopping for loans and will be able to get a good perspective on what I can get in terms of an interest rate but ballpark figures would help speed up my research.
This is not quite what you asked, and I apologize, but now is the time to get a loan. Interest rates, by all indications, will be going up very soon. Greenspan had a big announcement on Tuesday that basically said, oh yeah, they're going up, brace yourselves. No specific time line, but it seems like it will be this summer.
Try Click and Clack on the web, Craven
You can take a peek at auto loan rates in your area on http://biz.yahoo.com/b/r/a.html
Thanks! That really helps.
From my company within the state of Massachusetts the current rates range from 5.29% - 5.79% depending on number of months of the loan for a outstanding or very good credit rating, 6.04% - 6.54% for a good credit rating and 10.95% for a fair credit rating assuming buying a new car. You probably could get a better rate, considering when I applied for a loan with an employee rate, the car dealer gave us a better rate (strangely with my own company).
Seems futile, I'm just getting rejection after rejection and nobody seems to want to lend me the small amount I need (forcing me to bigger loans than I'd need).
I want to get a used, and places like bankrate don't let me select the terms I want (they seem to have a 36 month ceiling).
I have enough saved to pay most of the car but everyone wants to loan a minimum that is several times more than I need....
GRRR. I think I'll end up stuck with what the dealers can wrangle.
This is what I suggest Craven. Get some reasonable rates. When you go to the dealer and they ask if you want to finance say yes, but you have already got some quotes from a bank. They will then ask if you would consider financing with them if they give you a better rate. Of course you would - what idiot wouldn't? Do not discuss the amount of the loan, at that point they probably will not. Then once you haggle the price of the car, the dealer will bring you to their loan specialist/manager. Wait for him to get you a rate, then tell him you want a loan for $2,000. He will kick himself that he spent so much time with you for a measly $10 commission or whatever, but at that point what choice does he have. I used this same tactic when I bought a used car. It was great just to see his face when I told him the amount of the loan. He then stated, but you will need money for taxes, insurance, etc. I responded, "yes, I know. I already figured it all in and I only need $2,000."
And to be honest, I did get an honest rate from a bank and the dealer beat the rate of a bank. Also as I stated above, the dealer beat the rate that my own company offered me with the employee discount. Many times because of the dealers' connections, they can get better rates than the average person, especially if you have an outstanding or very good credit rating.
I have pretty much no credit history. Just got two more rejections...
I think the dealers will need to pull them thar strings.
You're in that catch-22 quandary, Crave. At some point in our lives we were all in the same place.
You don't have any credit history (of significance) so therefore you can't get any credit. And believe you me, once you get some credit established you'll have offers filling your mailbox.
The dealer's rate will be the highest. Don't let that trouble you greatly, for these reasons:
-- As long as the loan is simple interest, you can pay more than the scheduled note and have the extra automatically apply toward the principal. Doing this over the long run will save you much more in finance charges than a couple of points on a small loan ('small' being relative to the size of your loan, presumably 10K or less...).
-- Approach your bank (the one you have done business with for awhile now, the one that presumably has turned you down already) once you have made two or three payments on your dealer loan and ask them to refinance it. You will have now car credit on your history when they re-look at your bureau report...
--You have never posted a query about payments (good for you; you've already learned the most important lesson about auto financing, which is don't buy a payment) so let me point out for the benefit of others that you can use a cost-per-thousand factor of about $20 utilizing a few assumptions: an interest rate of about 7% on a term of sixty months and 'B'-rated credit.
Just get the dealer to get the loan done, so you can get your car.
This is the last time in your life you'll have to worry about this (assuming you are a responsible debtor).
P.S. I would still tell you you're better off with a new model, with a warranty, that's in your price range, Hyundai or Kia being the manufacturers that come to mind.
Thanks PD. I've been considering new already...
The rates for used is more expensive an' all. Thing is, I'll probably do an impulse buy within days of getting my liscense (Monday) and there's a nagging doubt in my head that I should go used.
Dunno, let's see what happens. If I go new, I'll prolly go with a more expensive car. My plan was to have the car paid off within months. The plan to go used was so that I can get rid of the debt (owe no man anything) right away and if I get into a longer commitment I might go ahead and increase my price limit.