First Time Car Buyer Need Help
by Yavet
(Florida)
Question: I'm a first time car buyer and need some help. I'm 25 yr old with $2400/month income and trying to get my first car loan..
My credit score (based on CreditReport.com) is 697...My total credit limit (from 3 credit cards that I have) is $2300 and my total balances are $1600.. I had more than 10 hard inquires and my oldest credit card is 2.7 years old.
I did apply with Auto Credit Express and 1 of the dealers had called me, so I went there.. They gave me a couple choices of cars (because I'm a first time buyer) and finally I picked the car I wanted..
On the paper that they put on car, the sales price of the car was $11999, but when the sales guy added everything up, he wrote it down for $12999.. I asked the guy why it was $1000 more and he said its the bank fee.
My question is, since I am a first time car buyer, can I still negotiate the price that they put on car or do I not really have a choice??
Also, is that true about the bank fee that the salesman tried to add in or is it just a scam from the dealer??
What is the max that I can get finance if I get $2500 down?? Since I'm still waiting on an approval from the bank, can I go to another dealer and try my luck?? Is that gonna effect anything??
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Answer: Hi Yavet,
The first thing that I want to say here is that you should not work with this dealer anymore. They are lying to you and banks do not allow their fees to be added to the sale price of a vehicle.
It's especially funny to me how they added this fee to the sales price and didn't even have an approval yet.
The banks that I would think you would get approved at more than likely won't charge a fee to the dealer and if they do it would probably be nowhere near $1000.
You are in one of the better positions a first time buyer can be in. You are using a solid down payment, have decent monthly income, have some credit although limited and have a decent credit score.
I would think your best bet would be to try to get financing through a credit union. I think a credit union would help you to get a decent rate and good overall terms.
How much you can get approved for as a first time car buyer will vary greatly based on the credit unions in your area.
I would think that the dealer you are working with now is clueless as to handle customers in your situation and they seem deceptive...
Try finding another dealer that works with multiple credit unions and lenders as there should be a better way to go than what this dealer is trying to do.
On Friday I was able to get a customer in a similar situation as yours approved for a $16,000 loan at 6% with a local credit union. His credit was even more limited than yours and he only had 1 credit card with a $200 limit.
Not to say that is what a credit union might do for you being that I'm not familiar with the lenders in your area, but you stand to get a much better approval this way.
Most first time car buyers that are able to get approved with the credit unions in my area are approved for somewhere between $8,000 to $12,000. If you can stay in this range, it will be much easier to get approved.
Regarding negotiating sales price, yes you can. Many first time buyers think that they just have to do what the dealer tells them and this is not always the case.
Definitely ask for a discount off the sales price....You may or may not get it, but I guarantee the dealer won't give it to you if you don't ask!
Hope this helps,
Justin
