Home     Forum     401k     401k Rollovers
    Register   Login   Members   Search   FAQs     Recent Posts    




Question about getting a car financed

Reply to topic
Money Talk > Credit & Loans

Author Thread
BattleBorn
New Poster


Cash: $ 0.45

Posts: 2
Joined: 07 May 2013
Location: Portland
Question about getting a car financed  Reply with quote  

If I have a co-signer that has perfect credit, and makes about $45,000 a year and only has a couple payments (like mortgage) can I get a 23,000 dollar car?
Sorry; this probably is a pretty easy question but I'm a bit of a rookie.

Thanks.
Post Tue May 07, 2013 1:33 pm
 View user's profile Send private message
littleroc02us
Moderator


Cash: $ 383.10

Posts: 1885
Joined: 09 Feb 2009

 Reply with quote  

So if you were to have a car cosigned for you, with a going interest rate of 7% and a downpayment of 2k your payment would be $480 a month for a 60 month term. Someone who makes 45k a year brings home 2815 after taxes each month just FYI.

So, yes the car dealership should finance this car. The greater question is why do you need a cosigner and why do you need such an expensive car? I'm 42 and I don't buy expensive vehicles even though I can afford them. Does the cosigner realize that if you don't pay he's on the hook for the payment? Are you ready for the worst case scenario where you don't pay and the two of you are no longer friends because the deal went bad?

Think twice before you do this, deals like this can leave you financially strapped for years to come. I know I've been there, when I was young I made a foolish decision to buy a new car and it was the worst decison ever due to the large payments and the depreciation. I now prefer to invest in assets not liabilities.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Tue May 07, 2013 1:47 pm
 View user's profile Send private message
BattleBorn
New Poster


Cash: $ 0.45

Posts: 2
Joined: 07 May 2013
Location: Portland
 Reply with quote  

I make enough to pay for the car, I just don't have the credit to finance it. The car is a bit spendy, but it it pretty new and has low miles, so I will be able to have reliable transportation for years to come. I will surely listen to your advice though, I appreciate the long detailed response.

Thank you.
Post Tue May 07, 2013 1:52 pm
 View user's profile Send private message
Wino
Senior Member


Cash: $ 113.80

Posts: 560
Joined: 03 Aug 2012
Location: Dubai
 Reply with quote  

quote:
Originally posted by BattleBorn
I make enough to pay for the car, I just don't have the credit to finance it. The car is a bit spendy, but it it pretty new and has low miles, so I will be able to have reliable transportation for years to come. I will surely listen to your advice though, I appreciate the long detailed response.


My advice is to buy a beater car and make $480 payments toward your dream car. It will take you 4 years to save up enough. If you cannot do this, then you also cannot afford the new car. You will save just under $6000 in interest payments. That means you'll be "saving" about $125 per month for the time you're paying into the account for the car.

Buying a new car is the worst decision you can make. You can buy a very good used car for $10,000, but remember to save up and pay cash. Carmax does a good job of screening used cars. Go look there.
Post Tue May 07, 2013 1:57 pm
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 735.05

Posts: 3574
Joined: 21 May 2006
Location: arizona
 Reply with quote  

quote:
I make enough to pay for the car, I just don't have the credit to finance it. The car is a bit spendy, but it it pretty new and has low miles, so I will be able to have reliable transportation for years to come.


BB, new cars are a status marker in our society rather than a tool for transport. And if you look at families that are failing financially, filing for bankruptcy, you'll almost always see late-model cars. (OTOH, most of us had to do it once when we were kids, lol). Just so you'll see the math, the $30,000 that you'll spend for the $23,000 car would be $700,000 in 30 yrs if you invested it.

One very big mistake is to think of 'payments' rather than the cost of the car - you said "I make enought to pay for the car" - actually, you've fallen into the payment-trap.

And then comes the rationalization phase - "I need reliable transportation" - I need a safer car to take the baby to the dr", etc. Safety and relaiability come from good care & maintenance - good tires, good brakes, good steering components. Our cars have about 140,000 miles on them, they are in fine shape.

You really don't want to ask someone to cosign - that is a terrible poisition to put a friend or a parent into - they hate to say 'no' - but it makes them liable for accidents, deaths, as well as missed/late payments. Any time your payment is 15 days late (lost job, etc) their credit takes a hit - better to wait until you can carry your own finances.
Post Tue May 07, 2013 4:09 pm
 View user's profile Send private message
coaster
Senior Advisor


Cash: $ 1626.30

Posts: 7990
Joined: 11 Oct 2005
Location: Wisconsin
 Reply with quote  

Why don't you ask your prospective co-signer to join the forum and come into this discussion?

~Tim~
Post Wed May 08, 2013 5:06 am
 View user's profile Send private message
littleroc02us
Moderator


Cash: $ 383.10

Posts: 1885
Joined: 09 Feb 2009

 Reply with quote  

quote:
Originally posted by coaster
Why don't you ask your prospective co-signer to join the forum and come into this discussion?

That would be a new spin on forums.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Wed May 08, 2013 3:14 pm
 View user's profile Send private message
coaster
Senior Advisor


Cash: $ 1626.30

Posts: 7990
Joined: 11 Oct 2005
Location: Wisconsin
 Reply with quote  

quote:
Originally posted by littleroc02us
That would be a new spin on forums.

On this discussion, anyway. If the cosigner is going to have equal responsibility for the loan, then I think the cosigner ought to have equal benefit of the members' collective wisdom about the topic.

Wink

~Tim~
Post Wed May 08, 2013 4:05 pm
 View user's profile Send private message

Reply to topic
Forum Jump:
Jump to:  
  Display posts from previous:      





Money Talk © 2003-2016