CAR FINANCING ISSUE

[Mooney1184]

ok so let me lay it out for everyone. im selling my car and using the money as a down payment on a new car. last time i financed a car everything went smooth. i found a nice 1992 honda accord lx for 2500, put 500 down, and financed the rest for about 210 a month, for 16 months. luckily i was able to pay it off early. so i figured why not get out of the scene for a while, go back to school, and pick it up againt later.

so i found a nice 1998 honda accord ex 5 speed (i hate auto's, and im spoiled to sunroofs) for 6k, i told the guy i could put down 1k, but needed to finance the rest. he quoted me 350 a month for 24 months. that comes to a grand total of 8400, on top of the 1k i put down. so thats basically 9,500 bucks for a car worth roughly 5-6k bucks.

my question is HOW IN THE HELL IS HE CHARGING ME SO MUCH INTEREST VS. THE LAST TIME I FINANCED A CAR????!!!! i mean i understand that im financing more money, and a slightly longer period of time, but goddamn, i didnt expect to see numbers like those. im looking around 200-270ish a month for a nice mid 90's accord ex 5 speed. i could put 2k down (really would like to use 1k to fix my sisters car however), but im really shooting to just use 1k. anyone got some sales expierence to help explain this to me????

btw i have no credit, no credit cards (although im finally coming to grips with the idea i need to get one and finally start building some credit) im also a server in a restaurant, so i never see paychecks (for those who dont know, servers only make 2.13 an hour, and all of it goes towards taxes), but i average 400 a week....usually more though.

so whats a guy to do?



on a good note however, my GM got fired today and the staff is going to benchwarmers for drinks......so that kinda made me feel better.

[noridetoolow]

ur hurtin because NO credit is just about as bad as bad credit. No one really wants to finance a car loan for you ( I suspect ) and I imagine you are looking at financing through a used car lot. If that is the case.....you should try a dealership, see what you can find used through a local major dealer....some will even find the used car you are looking for. They also have many resources for getting a car loan...but in the long run they dont have the flexibility that smaller used car lots have...but these smaller lots can afford the risk by the HIGH interest rates they charge....that is what your major problem is, the interest rate is probably high because you are considered a high credit risk...even through a major dealer it will be high...but not near as high. The worse part about it is that with no credit....you might not get a loan through a dealer and unless you have a co-signer...your almost stuck going to the small used lot. My suggestion....get something cheaper for now.....get a credit card or small signature loan....something you can establish a credit history with. It will take AT LEAST a year to build even a base credit score but it can be done and you would have a much better chance at a better interest rate and much lower car payments. Use the card for something like gas and pay it on time. You DO NOT want to have a low or $0 balance on the card....oddly enough, try to keep about 1/3 to 1/2 of the limit on the card. In other words, if you get a VISA with a $500 limit...charge about $200 on it and then just pay on it....for some reason it looks better to creditors to see you owe some money on a cc or loan but not too little and not maxed out. anyway....GL

[KPowerEP3]

ok so let me lay it out for everyone. im selling my car and using the money as a down payment on a new car. last time i financed a car everything went smooth. i found a nice 1992 honda accord lx for 2500, put 500 down, and financed the rest for about 210 a month, for 16 months. luckily i was able to pay it off early. so i figured why not get out of the scene for a while, go back to school, and pick it up againt later.

so i found a nice 1998 honda accord ex 5 speed (i hate auto's, and im spoiled to sunroofs) for 6k, i told the guy i could put down 1k, but needed to finance the rest. he quoted me 350 a month for 24 months. that comes to a grand total of 8400, on top of the 1k i put down. so thats basically 9,500 bucks for a car worth roughly 5-6k bucks.

my question is HOW IN THE HELL IS HE CHARGING ME SO MUCH INTEREST VS. THE LAST TIME I FINANCED A CAR????!!!! i mean i understand that im financing more money, and a slightly longer period of time, but goddamn, i didnt expect to see numbers like those. im looking around 200-270ish a month for a nice mid 90's accord ex 5 speed. i could put 2k down (really would like to use 1k to fix my sisters car however), but im really shooting to just use 1k. anyone got some sales expierence to help explain this to me????

btw i have no credit, no credit cards (although im finally coming to grips with the idea i need to get one and finally start building some credit) im also a server in a restaurant, so i never see paychecks (for those who dont know, servers only make 2.13 an hour, and all of it goes towards taxes), but i average 400 a week....usually more though.

so whats a guy to do?



on a good note however, my GM got fired today and the staff is going to benchwarmers for drinks......so that kinda made me feel better.

Plain and simple Josh, the guy is trying to rip you off. I'm assuming, based on what you've posted that this is a buy here pay here type of place. The law in GA is that the MAX interest rate that he can charge you is 24.99%, if you do the math, on $5,000 even at a 32% rate, you should be looking at less than 300 for 2 years. I say keep looking and try to find a better dealer. You could also go the route of trying to secure your own financing, be it through whoever you bank with or a national level lender like capital one or something similar. I've been in car sales/finance for 2 years now and this shit just sounds shady to me.

[Evil Goat]

simple...shitty or no credit will usually = high interest rates...thats why youre getting raped, well that and the fact that you have no real verifiable income

p.s. i wouldnt pay 350/month for a 98 nothing....you should have some type of credit history if you borrowed money in the past on the other car and made all your payments on time, enough to get a decent credit card anyway.

i assume youre buying this car from a mom and pop shop.....dont finance through them, get yourself a cosigner, that will help tremendously, preferably someone with good credit



edit....it didnt click with me until i saw the above post....but yea youre getting ripped a new one....his math is either incorrect or yours is....id check with him and get payments in writing, if what you say is true id contact the BBB....fuck cheating car salesmen

[Mooney1184]

thanks everyone. i went out tonight and thought about it while having a few drinks, and im thinking it would be better if i paid cash for a decent 92 ex, that way ill still have enough to fix my sisters car, have no car payment, have a 4 door, and still have good money coming in. i just hate dealing with credit shit. it was a good concept in its original form, but nowdays the shit is just redicilous. i truly believe that the world protrays the idea of being sunk into credit is mediocrite, and you should accept it as part of life.....however i refuse to. yeah sure, id FUCKIN LOVE to have a new 350z, but im not going over my head in debt to get it, id rather suffer through college with a pos, and have my dreams later on in life when i can truly afford them. i guess this kinda turned into a rant, i just hate dealing with salesmen and credit shit.

thanks again guys.

[JennB]

mediocrite.

What?


Anyways. You need to start to build your credit. I know people hate it but you have to have it. You don't have to have tons of debt or be in good credit standing. Get a credit card with a low limit and start to use it but always keep the balance at about 1/3 of the limit. Maybe join a credit union.

But don't get sucked into loans like the one you are talking about. They are nothing but a waste of money. Pay cash for a car and then save up the money you would have spent each month on a car payment.

[latoilette]

payments are PITA. like the home mortgage..if you buy something like 200k, after 30 years, you are paying like 350k for it..

[Jkuao]

payments are PITA. like the home mortgage..if you buy something like 200k, after 30 years, you are paying like 350k for it..

Most people wind up paying a lot more than 350k for a 200k mortgage. Fixed at 6.98%(the avg today), you would see 478k.

To the original poster, you paid 55% of the original value of the car in interest on top of the price. I would drive that car unless it's on fire at the side of the road and forget about buying a replacement. You already paid for something that's effectively worth scrap metal. Might as well get every penny out of driving it.

The rate you mentioned does sound fishy. Maybe he's throwing in the random gap insurance, service plan, etc to inflate the loan amount.

Car Price = 6,000
Tax = 360
Down = 1,000
Fees = 100 (Approx)

Financed Amount = 5,460
350/mon for 24 mon = ~47% interest which is totally illegal under usury laws even in GA and we're one of the few states that allows title pawns.

BTW, your dream of a 350Z would be pretty rough on $400/week even if the gov't doesn't get a penny of it.
400/week = 20,800 annually (assuming you work year round)

Lowest 350Z invoice is 26,095 so this is an ideal situation...one that you can't possibly reach w/o a lot credit and reported income.

26,095 + 650(dest) + 400 (doc + tag) x 1.06 (tax) = 28,773

28,773 - 1,000(down) = 27,773.

Assuming you have great credit and Nissan is having a deal, and you get 5% over 60 months you still would see a payment of $524.11. You would also have to buy insurance at a minimum of $1,000/6 months(it's a sports car and you're likely young so it'd be closer to 4k/yr) as well as $130/mon in gas (12,000miles per year at 2.90 avg at 23mpg)

524.11 + 167 + 130 = 821.11/mon

Annual costs are near 10k or half of your total income. That's not counting maintenance costs either.

Ideally to afford a 524/mon payment, you should be making over 78k annually (8% of your monthly gross in order to afford a mortgage too). Of course a lot of people on this board don't make that and that's the reason why so many people wind up in credit trouble or living at home w/ the parents. It's all to provide the perception of wealth. The median income in metro Atlanta is only ~55k meaning all those people technically can barely afford the payments on a Honda Civic much less an Evo or a Bimmer.

[Leadfoot_mf]

okay my advice to everyone in this thread is go back to school.
what about tax tag and title plus the 25 % fin charge and u get your 8400 bucks.

let this be a lesson to keeping good credit and not being in debt. save up and pay cash. or buy something cheaper.

[Evil Goat]

okay my advice to everyone in this thread is go back to school.
what about tax tag and title plus the 25 % fin charge and u get your 8400 bucks.

let this be a lesson to keeping good credit and not being in debt. save up and pay cash. or buy something cheaper.

and my advice to you would be to learn to read things twice since comprehension is a skill you lack

guys putting a grand down on the car, theres no way come hell or high water that financing $5400'ish dollars will result in a $350/mo car payment, if it does let me know where you went to school so i can be sure not to send my kids near that district

[Leadfoot_mf]

and my advice to you would be to learn to read things twice since comprehension is a skill you lack

guys putting a grand down on the car, theres no way come hell or high water that financing $5400'ish dollars will result in a $350/mo car payment, if it does let me know where you went to school so i can be sure not to send my kids near that district

stfu up dumb ass did you miss the part about tax, tag and title you are the one with comprehension problems.

[BlkCD5]

This is why i'd just save up and pay cash for the car. I like the idea of completely owning my car.

[n2daizo123]

6000*24 percent annually = 1440
finanace it for 2 years and you have 2880 in finance charges.
take your 360 tax and itle fee plus your dealer fee (100) and you have $9340.
then subtract your down payment (1000) and you have $8340.

[r0bb86]

ANNUAL % rate & no credit = pwnz yooo.

[Jkuao]

6000*24 percent annually = 1440
finanace it for 2 years and you have 2880 in finance charges.
take your 360 tax and itle fee plus your dealer fee (100) and you have $9340.
then subtract your down payment (1000) and you have $8340.

No one taught you interest did they?

A car note works by charging your 1/12 of the Annual Percentage Rate on the total amount each month. You're making a payment every month so the amount you borrowed is less every month.

According to your standard payment calculator:
2 year 24 month loan on $6,000 = $317/mon
BankRate Auto Loan Calculator

So that means in the 1st month:
Month 1: 6,000 x (.24 / 12) = 120 in interest + 197.23 principle = 317 payment
Month 2: 5,802.77 x (.24 / 12) = 116.06 in interest + 200.94 principle = 317 payment
...
It's called an amortization table.

A 24% APR note on $6,000 would get you $1,613 in total interest payments over 2 years. 317 x 24 months.

[HeLLo iM iZzY]

Kinda the same story for me. Found a 00 Si for $8,500. Paying cash with taxes and other fees it would come out about $10,000. My dad and I asked about financing, the motherfucker doesn't even go inside to calculate, he just flat out says somewhere around $18,000, hahah. Keep in mind, my dad has GREAT credit. I was like are you fucking kiddin me? $18k for a USED 7 yr old car? LOLOL. Shady ass Colombian dealerships !

[Leadfoot_mf]

that is why u always arrange financing before you get to the lot.

[Greddypacked]

Like most people said above, no credit is what gets you high interest. If you had good credit it wouldnt be like that.

[blaknoize]

Y not just avoid all that and pay 2-3 grand up front for a lesser car. I mean... ur going to college, think economics, because u know ur gonna be broke anyway. Y not have a job just to have one and not to "have" too pay for the car. I downgraded myself. I went from a 1993 Accord to a 91 Civic, just for school. So, think like that. Save the glamour and sunroofs for AFTER u graduate and make real money.

[allmotoronly]

interest is a bitch. You need to get a co-signer (a parent) who has good credit. that will help drop the interest rate a little. If your parents like to help you with shit, get one of them to finance it with you as the cosigner just so you will get some credit, and the interest rate will be based on their credit rating. if your parents credit sucks, then i guess you are screwed... just my $.02

[green91]

Based in the year of the vehicle id say its a small car lot that does on-site financing which typically also jacks the interest up to the maximum limit. you may try actually financing it through a bank and possibly a co-sign to help get the interest rate down on it.

and by going through a bank and financing it, it will help you build credit very quickly compared to credit cards or small revolving payment accounts. id always heard after 6 months auto loans really help with your score.