I need help buying a new car

[-SD-]

is working extremely hard to build my credit really that important at 21 nowadays? or can it wait two years till i graduate?

no, but as far as "working hard", youre not having to do any more work, its just different forms of paying for something. some ways build your credit but cost a little more money (finance charges) some cost less (cash money).

 

[PICK3]

I tried the last time iggy was car shopping. His daddy wouldn't let him buy it.

Hook his daddy up to.

 

[miplank]

Hook his daddy up to.

*too

 

[PICK3]

*too

fuck me!

3 day weekend of booze/narc damage

 

[miplank]

Llolololol

 

[PICK3]

Llolololol

olololololstr8!

 

[kx250rider]

how is that working hard?


Take your $6000 car, go to you bank and borrow say like $3000 against it. It'll give you some spare cash to go buy something (new camera, etc).

It'll generate you some installment credit, boost your score and get you started on the right path.

Do you have to do it right now? No, but it never hurts to start now.

I agree that having good credit is 100% important at any age, but one thing I'd do, is just turn around and put the borrowed amount in a CD at whatever is the best rate they have, and forget about it until the loan is paid back. You still will be out the cost of the interest on the car loan; probably 12% apr on the loan, which in a 3-year loan would be about $1080. But if you borrow the $3000 and use it for other things, you're out $4,080 for the same good credit boost.

If all you want is to build good credit, there are a lot of much cheaper things you can do, including the VERY BEST one, which you're already doing!!!! Having a credit card and paying it off to 0 every month, is what leads to platinum credit. A car loan is good credit too, but a car loan isn't any better for the record than a Visa or MasterCard, and if properly handled, the credit card won't cost you anything (except maybe for an annual fee of $50 or $100 if you're young with little or no credit). If you pay it off to zero every month, there is no interest. The car loan WILL cost you Big time. Also, think about the hassle of selling a car that has a lien on it. A lot of people won't want to bother to come look at the car, if you can't say "clean title; pink slip in hand" because there's a loan on it.

Charles

 

[miplank]

I agree that having good credit is 100% important at any age, but one thing I'd do, is just turn around and put the borrowed amount in a CD at whatever is the best rate they have, and forget about it until the loan is paid back. You still will be out the cost of the interest on the car loan; probably 12% apr on the loan, which in a 3-year loan would be about $1080. But if you borrow the $3000 and use it for other things, you're out $4,080 for the same good credit boost.

If all you want is to build good credit, there are a lot of much cheaper things you can do, including the VERY BEST one, which you're already doing!!!! Having a credit card and paying it off to 0 every month, is what leads to platinum credit. A car loan is good credit too, but a car loan isn't any better for the record than a Visa or MasterCard, and if properly handled, the credit card won't cost you anything (except maybe for an annual fee of $50 or $100 if you're young with little or no credit). If you pay it off to zero every month, there is no interest. The car loan WILL cost you Big time. Also, think about the hassle of selling a car that has a lien on it. A lot of people won't want to bother to come look at the car, if you can't say "clean title; pink slip in hand" because there's a loan on it.

Charles

The reason I suggested for him to use it towards a camera is because I know he's been shopping for one. Currently (atleast in my area) a secured loan typically is only prime +1 or 2...i forget.

I properly handled credit card isn't going to fair as well as an installment loan. While some revolving credit is infact good for you credit it won't do as well as an installment. Installment loans will give you bigger line items on you bureau and show the banks a better picture of your payment history.

I see it all the time with people that will have one or maybe 2 small credit cards with perfect pmt history. They'll be a/a+ paper and the bank will not even consider them and the reason for turndown will be "no comparable credit".

As far as selling his car in the future...he's looking at borrowing a few thousand, not 30,000. Something that can easily be payed off in the event he wants to sell it.

 

[kx250rider]

The reason I suggested for him to use it towards a camera is because I know he's been shopping for one. Currently (atleast in my area) a secured loan typically is only prime +1 or 2...i forget.

I properly handled credit card isn't going to fair as well as an installment loan. While some revolving credit is infact good for you credit it won't do as well as an installment. Installment loans will give you bigger line items on you bureau and show the banks a better picture of your payment history.

I see it all the time with people that will have one or maybe 2 small credit cards with perfect pmt history. They'll be a/a+ paper and the bank will not even consider them and the reason for turndown will be "no comparable credit".

As far as selling his car in the future...he's looking at borrowing a few thousand, not 30,000. Something that can easily be payed off in the event he wants to sell it.

Valid point.... I guess it depends on what he's planning to use the credit for in the next 5-10 years. I'm a tight-wad, and I always look at what something costs at the bottom line first.

Charles

 

[miplank]

also, the interest on 3 years at 12% is only $604.68