Is a 11.59% apr good for a 22k auto loan?

Question

Im wondering if thats good its for a auto loan. Im only 19 so im not to sure on that. I can pay it tho. Can I have opinions?

Answer 1

I've noticed that most of the people answering your question don't have experience with credit and lending. I do. I used to sell cars in Phoenix, I left the business in May for health reasons.

11.59% is a good rate (believe it or not) for a first time car buyer. You're lucky they are giving you that much money too. Most banks won't give you more than about $12,000 on a first time loan. You must have a co-signer.

If you do have a co-signer and their credit is strong (by strong I mean 740 or above) then you are getting ripped off. If they have a score that's a little low (620 or less) then you are lucky to get the rate you're getting. If their credit is average (650 to 680) then your rate is just about right for the amount you want to borrow.

I would caution you however, not to borrow that much money. They are probably stretching you 6 years (72 months) and that's a very long time.

A lot of stuff happens in 6 years (moving, changing jobs, going to college, etc.). PLUS, because of how long the loan is for, the first 2 to 3 years your payments are mostly going to interest and you really aren't paying down the car loan that much. So if you want out of the car in 2 to 3 years you'll be what's called "upside down." This means you'll owe more for the car than it is worth. Which makes it hard to trade in.

I used to caution my first time car buyers that just because you CAN borrow that much, doesn't mean you SHOULD. I would encourage you to look for a car that's around $12,000 to $14,000 max. Then purchase an extended warranty and GAP (but for no more than $2,000 total - you can negotiate for these things, even though the salesperson will try to tell you that you can't).

If you think your interest rate can be better check out www.1-800badcredit.com. This site has information on how to negotiate for a car loan (tricks I learned while selling cars) and also has lenders (like e-loans) that deal with first time car buyers and might give you a better rate.

Good luck to you!

Answer 2

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Answer 3

Well, considering the lowest rates that most large auto manufacturers offer through the financing division right now is around 6% (some lower, some higher), that rate is pretty bad.

I would not purchase any vehicle if my financing were that high. If you can afford the car payment, the more sensible route would be to put away what would be your $500 car payment each month and save up for a year. It will also give you a year to build a better credit history, right now, you're simply a financial risk for any lending institution.

Answer 4

If your credit is less than wonderful, and the car is six years old, that is not a bad APR. You might want to shop around a little, though. Try a local community bank or credit union, especially if you're a customer at one. They may be able to give you a better rate, because smaller banks don't usually put as much emphasis on credit scores.

Answer 5

Good Apr For Car

Answer 6

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Hmm... This depends. Is your FICO credit score below 600 (risky credit)? If so, then that's a reasonable rate. If your score is above 600 but below 650 (average credit), then it depends on whether or not you have any other debt and/or have missed any payments in the past 2 years. Your rate could vary anywhere from 6-8%. If it's above 650 (good credit), then that rate is a serious rip-off. In that case your rate should be anywhere from 5.5 to 6.5%. In general, if your score is above 700 (excellent credit), then your rate should be somewhere near 4 to 5%. If above 800, then you'll probably get below 4%. Credit unions tend to give the best rates. You can save as much as 1-3% with them, depending on your score. Never finance with an auto dealer on their lot, as they tend to have loans with the worst terms and tend to structure the loans to where you pay a penalty if you try to pay it off early (read: serious rip-off). Dealers have often learned that you can make much more money financing the car than in the actual sale of the car itself. If your score is hurt or low due to lack of history, one thing you can do to instantly improve it is to have your parents, a close friend or a relative put you on their credit card as a "authorized user". You can tell them that they don't have to give you the card and instead cut it up. What will happen is that their entire credit history on that card is copied to your report and now it's yours. After that, you can apply for credit in your name and when they run your report, they'll see their history as yours. I'm 24, but I have a 34-year credit history because my parents did this. My credit score is 820 and I've only my own credit card for 6 years. If you don't have a credit union that you are eligible for, there are two that I know of that are easy to join. The first one is Pentagon Federal Credit Union ("PenFed"), which primarily serves employees of the Pentagon. The second is Alliant Credit Union, which primarily serves airline employees and school teachers. You don't necessarily have to work in those fields to qualify. There are backdoors to entry if you make a small tax-deductible donation to some cause they support. For PenFed, you can qualify by joining the National Military Family Association for like $20. As an added bonus you also qualify for a reduced GEICO auto insurance premium if you join NMFA and PenFed. PenFed also has some real nice credit card and certificate of deposit deals. As for Alliant, you can join if you donate $25 to the National PTA and become a member through that. I've heard that if you call them first and tell Alliant that you are joining this way, often they will pay the fee for you. They also give you $5 free in your savings account just for signing up. They tend to have high savings yields and excellent health savings accounts (HSAs). I personally keep my HSA there. Both Alliant and PenFed tend to have some really attractive auto loan rates and being a member means that you also qualify for some other good deals as well.

Answer 7

Seems high, You should be able to find one for around 7%. With that interest rate and the cost of insurance on a new car at age 19 you are going to be paying out a lot of money per month..

If you can manage to hold off a bit, maybe get a used car for a year or two and then re-apply you would get a better % rate and your insurance will be lower..

Answer 8

you should be able to get about 7% on a car loan these days.

Answer 9

If you have crummy credit it might be OK. The typical rate for someone with top level credit is in the 5.5% - 6.0% range right now.

Answer 10

Haven't thought about that