Trying to get a car but having problems

annice22 · #1 08-18-2003, 04:37 PM

Today I went to get a used car, I was approved but I don't make enough (which make no sense) because I make enough for the payments. So now I have to get my mom to co-sign. I don't think you should have to make a certain amount to get a car.

DeltAlum · #2 08-18-2003, 05:56 PM

A car is probably the second most expensive thing you will ever have need to purchase. A house being the most expensive.

Banking (and lending) is a business. It would be terrible business practice to not have income standards for that type of purchase.

aephi alum · #3 08-18-2003, 07:21 PM

DeltAlum is right - every time you take out a loan, especially a car loan or mortgage, your income will be verified. If your income is too low, the bank will be concerned that you won't be able to make your payments (even if your payments are quite a bit smaller than your monthly take-home pay) so they either won't make the loan, will charge a higher interest rate because of the risk, or will ask for someone (such as your mother) to co-sign so they can recover their money from the co-signer if you default.

The good news is, if you make your loan payments on time, you'll improve your credit rating, which banks also consider when deciding whether to make a particular loan.

Hope all goes well with the new car.

annice22 · #4 08-27-2003, 08:37 PM

I just got a new car a 2003 Dodge Stratus. It's my favorite car color sliver. I am so happy my dad will bring it to me next Saturday. So what if I'll be without a car for a week, it's a new car.

I am so happy.

Annice

DeltAlum · #5 08-27-2003, 08:50 PM

Congratulations!

MooseGirl · #6 08-27-2003, 11:05 PM

OMG, A new car! how awesome!

I'm looking for a car too, but I'm in a shitty financial position....maybe I'll wait til after christmas to see how things are.

I'm 25 and I've never owned a car.
Not to mention, I'm only looking at cars that are at least 10 years old

yeah, I'm poor.
One day though, one day I may actually be able to afford a car that's only 5 years old!! lol

rainbowbrightCS · #7 08-27-2003, 11:07 PM

wow a 2003 Dodge Stratus in silver. I am so jealous.

Have fun with you new toy.

Chris

ImDaChamp · #8 08-27-2003, 11:10 PM

haha i got a brand new 2003 accord coupe. i bet i wont be having any problems anytime soon

DeltAlum · #9 08-28-2003, 12:08 AM

Sigh! I just bought a Chrysler. It's my first "adult" (read that old man's) car. I've driven two seat roadsters ever since high school.

Lady Pi Phi · #10 08-28-2003, 01:12 AM

Quote:

Originally posted by MooseGirl
OMG, A new car! how awesome!

I'm looking for a car too, but I'm in a shitty financial position....maybe I'll wait til after christmas to see how things are.

I'm 25 and I've never owned a car.
Not to mention, I'm only looking at cars that are at least 10 years old yeah, I'm poor.
One day though, one day I may actually be able to afford a car that's only 5 years old!! lol

Yeah I'm in kind of the same position. I don't think I'll be able to afford a decent car for quite some time. It will be old used cars for me. I figure as long as it'll get me from A to B in one piece and it's clean, it's all good.
But I don't have to worry about that for a while. I still have to get my license (stupid graduated licensing...I think I'll move out of province when I graduate so I don't have to deal with that crap!)

GeekyPenguin · #11 08-28-2003, 09:59 AM

Quote:

Originally posted by DeltAlum
Sigh! I just bought a Chrysler. It's my first "adult" (read that old man's) car. I've driven two seat roadsters ever since high school.

See, now you really are "distinguished," DA.

MooseGirl · #12 08-28-2003, 02:27 PM

Quote:

Originally posted by Lady Pi Phi
But I don't have to worry about that for a while. I still have to get my license (stupid graduated licensing...I think I'll move out of province when I graduate so I don't have to deal with that crap!)

Me too! I just cancelled my 2nd road test for like the 5th time! I've been wanting to take it for the last 3 years, but something always come up and this time I couldn't find anyone to lend me a car, not to mention I haven't driven in over a year!!

And I could have avoided all of this...I had my Beginner's BEFORE graduated licensing! But my dad was never around to teach me, so it expired!

Only 1 year left on my license so I have to take the test soon! (another reason I want a car - I need practice!)

Lady Pi Phi · #13 08-28-2003, 02:30 PM

Quote:

Originally posted by MooseGirl
...Only 1 year left on my license so I have to take the test soon! (another reason I want a car - I need practice!)

Well at least you still have time. Mine expired and now I have to start all over again

. I took lessons, but I never enjoyed driving. Its something useful to have. Part of my problem was I had an a$$ for an instuctor so I just stopped going, and then too many things came upo and I never called to get a new instructor and before you knew it, my license had expired. Oh well.

LXAAlum · #14 08-28-2003, 04:31 PM

Quote:

Originally posted by aephi alum
DeltAlum is right - every time you take out a loan, especially a car loan or mortgage, your income will be verified. If your income is too low, the bank will be concerned that you won't be able to make your payments (even if your payments are quite a bit smaller than your monthly take-home pay) so they either won't make the loan, will charge a higher interest rate because of the risk, or will ask for someone (such as your mother) to co-sign so they can recover their money from the co-signer if you default.

The good news is, if you make your loan payments on time, you'll improve your credit rating, which banks also consider when deciding whether to make a particular loan.

Hope all goes well with the new car.

It's called your Debt-to-income ratio (DTI). For mortgages, if your DTI is over 45% (45% of monthly income is going to pay mortgage and other debt such as credit cards, etc...) or higher, most lenders will pass. There are a FEW that go as high as 55%, but the interest rate will be higher as a consequence.

I'm sure the auto industry does something similar, but I have no clue what their cutoffs for DTI are...

The other option would be to try for a "stated" income loan (not sure if you can for auto loans, but you can for mortgages) where you don't have to prove your income - usually you sacrifice on the amount of money and the rate the lender will offer, but it helps a lot of people in tight financial situations.

Hope that helps.

DeltAlum · #15 08-28-2003, 04:36 PM

Quote:

Originally posted by GeekyPenguin
See, now you really are "distinguished," DA.

Touche'

By the way, I just bought our son (college sophomore) a used car. Went to a company who sells cars exclusively for Credit Unions. Most of the cars are returned lease vehicles, etc. Prices were pretty good.

I don't know whether this kind of thing exists in other cities, but I wouldn't be surprized. In Denver, it's called Automotive Avenues.

It's one of those "no haggle" pricing dealerships.

Got him a 98 Ford Contour for about $4K in very nice condition.