Financing a car?

Question

I'm only 18, and I want a new car... It's an '07 g6 and its only 16k, SO
what do I need to do?
like, i could get a co signer but i heard that id need collateral.. and i dont have any?

I work at a factory, I weld.
I make $32 an hour.

Answer 1

Yeah, you will need a co-signer for your first car purchase. That shouldn't be a big deal. If you can get one of your parents, grandparents or a trusted aunt or uncle with good credit. I know this sounds weird but do you have a credit card? If you do, they (the financing company) will look into that and see if you're making your payments. If you haven't missed a payment, that'll pay dividends. If you don't have a credit card, GET ONE! Seriously, you don't even have to put anything on it, just the fact that you have one says to them that they're not the only ones that have trusted you with money. I've never heard anything about collateral needs, but if your cosigners have loans of their own or credit cards that are all paid on time, you should be good. The 'collateral' is that if you miss a payment by more than a month, they are going to call your cosigner for money, and if you go past that it will dramatically affect your credit.....and also your future finance rates (how much you get charged interest for them loaning you money to pay for the car up front).
ALSO, this is a biggie. Make sure you go to kbb.com (kelly blue book) and research the car you're looking to buy. Make sure you are at least paying below the MSRP. NEVER PAY THE FIRST PRICE YOU'RE OFFERED! Find the invoice price for the car and try to at least get in between the Invoice and the MSRP price...unless you wanna just put money in your salesman's pocket. When you've done your research go to the dealership around the end of the month. All of the salesmen are usually short on their quotas and will drastically reduce prices just to sell cars and make their marks. I actually got my car a year ago $500 UNDER invoice because I knew the invoice, what I wanted to pay and I went the last day of the month. Stand your ground...don't be afraid to leave the dealership....once you come back the second time, they will know that you won't be bullied into paying a ridiculously high price. And naturally you'll have to pay for tax, tags and registration for the car, which will probably add up to another $500. Don't be surprised with this...everybody has to pay this. You can ask for the final price that you agree on to include this, if you want. Some dealerships go along with that. I hope this works out for you. I'm 26 and have bought 3 new cars of my own now. The first one was with my mom as a co-signer. Good luck with everything. I hoped I helped you somewhat.

OH YEAH!!! Depending on how long you wanna make payments (42 months, 60 months or 72 months) is going to make your interest go up and down. I would say the range would look like this (42 months 4.9%, 60 6.9%, 72 9.9%). So if you can make bigger payments over a shorter amount of time then you will save maybe a thousand or two in interest charges. If you go for a longer term the interest will be higher and you'll wind up paying a little more for the car in the long run. Good thing you're buying new....with used cars the interest is even higher.

Cheers!

Answer 2

In todays car market if you have a decent job and have no bad credit and can put about 20% down Gmac will give you a loan on a new car. Banks and finance companies today do not use co signers. That idea is long gone. They would rather just give the other person the loan and let the other person let you use the car and you pay that person not them. The old co signer method caused more legal issues then the banks wanted so they all but stopped it. They were chasing 2 people for their car and money instead of one. Its bad enough when husband and wife do it. Banks don't like that either. There is no reason that I can see GMAC will not finance you as long as you have been working steady for at least a year. Do you have a credit card or a credit union through work. As a welder do you belong to a union? The union usually has a lender they use.
The collateral is the car you may need a heafty down payment. If the do get you approved the interest rate might be a little high but if you pay it on time or early for a year and have established a bank account. your bank will refinance it at a lower rate usually. Try and stay away from loans longer the 4 years. That way if something happens and you find you don't like the car you will not usually owe more then the car is worth

Answer 3

Whatever you do, make sure that you have financing before you go to the dealership. They will try to screw you in every way possible. If the person who co-signs for you has good credit and a decent income then I don't think that you will need collateral. Best thing to do is go to a bank or credit union and see what you can get.

Just my two cents, but unless you are making at very least 30K a year, you should consider a less expensive, possibly used car. Many young people are getting themselves into serious debt with thoughts like "only" 16K.

Answer 4

How do you plan to pay for it? The car being 16K dollars, out of door price 18K, assuming you'll finance it for 60 months with 8% interest, payment is 390 dollars a month.

With no credit (because you are 18) and your age, without a co-signer, you will either NOT get a loan or will have to face very high interest rate.

At 15% interest rate, your payment goes up to 430 dollars a months.

Unless you have a very good paying job, I think your idea of buying a new car is unrealistic.

Answer 5

You don't need collateral but you do need a good credit history, which I sense that you don't have at this time. You'll have to get a co-signer who has a good history to sign with you. If you make your payments on schedule each month, that will help establish your good credit history so that you won't have to get a co-signer next time.

Answer 6

If you are in Great Britain, yes, it is!! If the car is on finance, it is wholly owned by the finance company, until the debt is totally paid off. Therefore, it cannot be legally sold until the finance is cleared. The law may well be different in the U.S.A., but this is Y!A U.K. and Ireland, after all...