Can I afford a $15,000 car if I make $2,000+ a month and have a decent credit report?
According to Credit Karma, my credit score is a 736. I also make around $2,000+ a month depending on how many shifts I pick up from working 2 part time jobs. I'm current looking at 2 different cars at my local dealer that I'm interested in and can't decide which one I want, or if I can even afford either. One car is a 2014 Honda Civic 4 door manual with 5,423 miles and it's going for $15,494. The other is a 2014 Honda Civic 2 door automatic with 11,826 miles and it's going for $15,991.
I've done a little research and I've been trying to build up my credit for the last year. I have no debt and I'm just looking for a newish car to replace the one I've been driving for the past 8 years. I plan on putting $5,000 down on whichever car I end up choosing, but I want to make sure I'm making the right decision.
Rogue? Have your been approved for an auto loan? By your bank, credit union, or other financial institution? Until you have been approved you can only by with cash.
If you can put down 5 large you are in good shape. What a gently used Civic? Great. Hell of a lot of fun and very reliable car. Tons of trims levels though (LX, EX, Si, etc.). Make sure what you are looking at and what it is worth. Here's how you can find just that.
http://www.edmunds.com/appraisal/
Lenders want FULL TIME jobs.
However, with $5000 down, dealers will get you financed… On poor terms. Like they will jack the car up by $4000 and charge you 19-29%.
They might want/need last years tax return to prove how much you earned.
You have a good credit score and a good down payment, but my guess is that your hit-or-miss income is going to be a problem. Lenders like to see a good long-term job with steady salary so that they can be sure you can repay the loan.
I suggest you go to a couple of banks or credit unions and apply for a preapproved auto loan. That way you'll know exactly what your can borrow, at what interest rate, and whether your income is a problem or not.
What is wrong with buying an older, cheap car and NOT paying a dime in interest payments on a depreciating asset? I'm nearly 50, but I OWN my house, because I have always prioritised the mortgage, and now wasted money on new cars! I also have the following in my driveway:
1 An interesting Alfa-Romeo 75 (a Milano to you) with a peppy 165bhp 2 litre TwinSpark engine, and a number of suspension upgrades. A true drivers' car, even though it dates from 1991.
2 A sparkling Toyota MR2 Revision 4/5 from 1997, it's a special-edition called a "Sonic-Shadow". It is mid-engined, has 178bhp and feels fantastic in all conditions, and is a much-admired car wherever I go.
3 A rare, Japanese Domestic Market produced Toyota Altezza, with a 2 litre engine and 207bhp. A mid-sized sedan for when I want some comfort and the superb sound system it has on board - when I take my friends out to dances, it's known as the 'Oriental Express'!
4 A Mitsubishi Galant 2.5V6 24Valve Sport sedan - leather interior, sport body-kit, an LPG system which gives me the equivalent of 55mpg economy. Comfort, torque and pace.
All my cars make for effortless cruising on the highways, and fun on the twisty roads. All of these have cost me under £1500 each, which is about $2500. I pay VERY little for insurance, because of my excellent record. I have seen friends put thousands down, pay thousands out for 4 or 5 years, and then end up with a car worth just a few hundred at the end of the contract! That, to me, is MADNESS! I buy good cars which will ALWAYS be sellable, and keep them up together. The depreciation has already happenned, and I can get AT LEAST what I have paid, if I fancy a change.
Pay cash or do not buy.
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