Where is the best place to apply for a car loan?
I am trying to get a car loan so I can buy a used car. I applied online at Capital One and they approved me of $19,000 but I read that I MUST purchase the new or used car at a franchise dealership which is the major dealerships like Acura, Honda, Ford, etc... but I found a few cars that I like that aren't franchise dealerships. What websites/places/banks offer loans where I can buy a car from just a regular dealership? What places have low interest rates? I've never done this before so any information will help. Thanks! =)
- 1 decade agoFavorite Answer
The better car loans are usually from the dealership since they can offer low rates then through credit unions and then banks. Since you don't have much credit history, your rate will probably be higher than most. The most you can hope to get is about 20% of your gross income applying towards the monthly payment. Since you state you make $1000 net I am going to assume you're making about $1500 gross so 20% of that is $300 so you can afford a car that you can make $300 a month payments on (which includes taxes and finance charges). The car you could get (new) would be around $15,000. Keep in mind if you get a used car, it would be harder to get a loan the older the car (depreciation). If you're planning to move out get the car before you move. Most creditors will assume some rent even if you live rent free with your parents. That's why they say you can only afford 20% of your gross payments. They also consider recurring bills and debts so depending on the lender, your $200/month in bills may affect the amount you're able to borrow. Since you don't report your baby-sitting income for taxes you won't be able to include that as income for your loan application (usually). If you want to get the rate down and possibly increase the amount of money you can borrow (for a bigger or better car) consider having your parents co-sign. If you want to do it on your own then do as above and limit yourself on the car you get.
- tom_gppLv 51 decade ago
What kind of dealership are you looking at? Unless it is a mom and pop used car place you should be ok. Call Capital One and find out what they say. If not go to your local credit union.