• FirefoxInstall the new Firefox »
  •  
    Credit

    Question

    I need a car but don't have a lot of money...please help!?
    I need to buy a car and I can make payments but no one will give me a loan. I have okay credit but some of my credit card bills are high. I make the payments and all but I guess debt is debt. I have yet to talk directly to the dealership about financing but if they tell me no I don't know what to do!! I want to by a 2008 Ford Focus and I'm reading they'll take about $3,000 down and the payments are only $169.00 a month...totally do-able. What should my next step be...assuming I can get the down from my grandparents? Please...I've been without a running vehicle for sooo long and I need a car soon. It's almost making me depressed!
    a month ago 9 Answers

    Best Answer

    Chosen by Asker
    Firstly, if you've got high credit card bills, your debt burden is too high. That's one of the reasons you've been turned down. The lenders have to be confident you can make the repayments. They don't want to lose their money. If you've got too many debts, that makes it harder in their eyes to service the loan. Considering you don't have the downpayment either and have to borrow it, I don't think you'll get a loan anywhere for a late model car. You might consider the repayments 'doable' but the lender doesn't share your confidence. Having credit card debt and seeking a loan are big red flags to them. Do not apply for multiple loans or any more credit cards, because that makes your credit history look appalling. You are going to have to wait this out if you want a loan for a car. Having the downpayment is important, firstly because it reduces the amount that you need to borrow, and secondly because it's like immediate evidence to the lender that you can put money away yourself, above and beyond your bills. I would not borrow from your grandparents. A savings history is very important when applying for a loan. I should know. I had no credit history whatsoever, but I had a great savings history and got a decent homeloan at a lower rate while all my friends, who borrowed more, are now paying crippling interest. I'm in Australia and interest rates are at an 11 year high right now. The downpayment is a good tool to negotiate a lower rate. Now, if you really need a car, forget the late model Ford Focus. You haven't got a deposit, and lenders are not confident that you can make the repayments, so you aren't going to get a loan for that. Considering the second you drive it off the car lot it will lose thousands in value, you would be sabotaging your financial future buying a brand new car. If you need to take a loan to buy a brand new car, you can't afford it. Car loans are the biggest waste of money there is, because you borrow money for something that constantly loses value. After you pay for it, it is never worth the amount you borrowed. Compare that to property, for instance. Most people, if they buy a home or a block of land, can wait ten years and sell it and make a profit. You cannot do that with a car. You do not need that car. You want it, but you don't have the money to go in and buy it. So you can't afford it. I suggest you start paying off that credit card debt. Make that enemy number one and get rid of it. That will put you in a better position to borrow, because your debt burden is not going to be as high. It will also start setting a good precedent for your credit history as a repayer. Pay the cards right down. Firstly, look at the interest rates. Pay the highest interest rate card off first, while making minimum repayments on the other cards. Consider transferring the excess balance onto another card with a lower rate or a 0% rate for a period of time on transfers. That will make it easier for you to pay off the cards, which are sucking you dry and making it harder to get a loan. Once the cards are in the black (that is, a few dollars in the black) stop using them. Start saving your downpayment. Go to your employer and have them transfer as much on payday as you would be paying on that basis to service the loan, and then extra, into another bank account. That way, you have an instant savings history and you don't need to think about saving. It will prove to the lenders that you can service the loan and that you're a good borrower. That makes it more likely that you'll get a loan. You will need to save for as long as possible, at least 6 months. Don't start saving til you've cleared the debt. Finally, go to a loan broker and find a good loan. A broker will get you a better deal than the people at the car yard. They don't want you to get a good deal. They just want to make money out of you. Go to a broker and get them to do the finance. They can get you a lower interest rate. Now, you'll be ready to buy a car. Go to a used car saleyard and get one there. You do not NEED a brand new car. I've been managing quite well with a 1982 Mitsubishi Sigma that cost $2000. I'm 28 and I'm still driving my first car. Go and get a secondhand car. You honestly can't afford a new car, and the lenders know it. But if you follow what I've prescribed, you'll be able to get a good loan on a used car. You only need it for transportation. A used car is all you actually need. Best wishes
    a few seconds ago

    Other Answers

    • If you already have debt, then you should buy a used car. Most financial planners will tell you that buying a new car is not a very good deal because they lose value quickly. Buying a car that is a couple of years old and has only 30k or 40k miles on it is much cheaper and it will still run for years.

      by knmjunior - 12 hours ago

    • Please help me for a car I am retired God Bless in health Thank You

      by Orestes - 12 hours ago

    • hmmm...high debt ratio on credit cards, can't pay 'em down; will have to "borrow" down payment. You need to have a plan; pay down the credit cards...if you're either unable or unwilling to do this you won't make the car payments, insurance, repairs, gas, etc. If you want to be less depressed, pay off that debt that is eating you up!! Sorry to be a killjoy, but being buried in debt is not good at any age.

      by bill p - 12 hours ago

    • go check the places buy here pay here they have low down payments and not to bad weekly payments they want your business so they will work with you

      by Grandpa - 12 hours ago

    • Buy a Certified Used Honda... it will live longer than YOU! And none of the high $$ that new cars cost... I have no car payment at all b/c I got a Honda for $5500. It's a 1997 & it's run flawlessly since I got it in 2002.

      by Carmella Luciano - 12 hours ago

    • If you have so much credit card debt, I would not suggest you buy a brand new car. Buy a used car first, then work on paying off your credit card debt, then you can treat yourself to a new car. That is my opinion.

      by Marlo M - 12 hours ago

    • try the toyota corrola it is about $99 a month.

      by ms77301 - 12 hours ago

    • I think your best bet may be a recent used car, rather than a new one. Check out Consumer Reports' Used Vehicle Guide at your nearest public library and find a car you like that has a good reliability rating. Let someone else pay the huge depreciation of the first two years, and give yourself some time to pay your debt load down before you try for a brand new car. A 2004/05 Toyota Camry would be a good bet. Remember to call your insurance agent and get a price on the insurance before you sign on the dotted line! It would be very unfortunate if you got a car that you could just barely make the payments, but then your insurance ends up being the budget-buster. it happens!

      by OK yeah well whatever - 12 hours ago

    Recommended Articles

     
     
     
     
    Yahoo Small Business Services