Want to get a loan for a car (private sale)? Where should I look?
 

Planning to get a 20-25k loan for a car. Should the go to the bank first? My main bank is BMO. And no, my mom isn't paying anything.

Tia
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I had my car loan through a bank, I had a fairly low interest rate and could pay as much as I wanted (so long as it was above the minium obviously) whenever I wanted. I have no complaints by taking a loan from a bank.

And go to a few different banks, see what they can do for you.

so ur getting a loan to buy a used car? doesn't sound very smart to me.

only place i know that will loan is the bank. try asking rich friends and family.

agreed with the above, banks will provide financing, they just need an asset (the car) to back it up

expect higher than mortgage rates, as cars depreciate whilst property appreicates (decreased risk... well, supposedly (look at financial crisis))

having said that, i have a rule, if i can't pay for it with cash, i can't afford it, but then again, not everyone's as boring as me :)

^ so youre going to buy a house with cash?

financing a used car is perfectly fine, check the rates at your bank and if you are buying from a dealership they may have in house financing as well, which is usually pretty competitive.

Try n get a personal loan first, and not a car loan.
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i believe banks will not lend loans if the car is 5 years old or more.... but maybe now its changed coz of the economy, they might want more business...

nice to hear you're entering the car scene. Make sure you come to the RS summer meet. :D


Looking at your bio, you're a post secondary student. If I were you, I wouldn't loan that much for a car.


anyways, it's your choice. Just make sure you post pics up if you do get it.

. double post

+1

usually banks wont do private used car sales. loan it under as a "personal" loan. older the car, less likely it'll be approved.

if you cannot afford it, dont get it.
there is a repo next to me.. and i see people losing there M5, mustangs, wrx from bank loans.. apparently the repo man said it is usually missing 3 months of payments

whatever you do, citi financial is NOT the place to go. they quoted 30% interest as a "good rate", compared to vancity personal loan which was < 8.

are you able to get a line of credit?

I took out a 6k loan on an 82 volvo....

Ya, get the personal loan. I had my dad co-sign for me as he has more assets then me. But I had it figured out, paid it off in under a year.

What kind of car are you looking for?

I did a personal loan on a car that was >5 years old. Only did it because my ICBC payout wasn't enough to cover the cost of the car I wanted and my car fundhad been sunk into rebuilding and modifying the engine. Lol. I was easily able to pay for it, but I didn't want to go carless while I saved up. Yes, I'm paying interest but oh well.
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That's not too bad, last time I took out a personal loan, I got tacked with 12%.

Paid it off in two months so it was all good.

Hmmm, it seems that there are 2 schools of thots. I dunno what car I'll be getting yet. My plan is to get the money ready first cuz it's always gonna be harder to get money when you actually need it.

As for those suggesting to get a personal loan first, will they ask you what the money is for? And if you tell them that it is for a car, will they automatically turn it into a car loan.

Also, I have saved up a decent sum as down payment, I'm just asking for more than I need so I can have more flexibility.

This may be a stupid question, but if my account with BMO is in one branch, is it ok that I go speak to a rep from another branch? The reason being that the branch I have my account with does not open on saturday. Also, if I don't have an account with a bank, can I just walk in and ask for a loan?

Thanks

Your sig and your post really don't match up very well..

It's ok to get a loan for a used car, as long as your not over extending yourself. Depending on the interest rate you're gonna get, a 25K loan is quite a lot for a student buying a car. I would just drive a ~$5K car while you're still studying.

Oh, hahaa

Actually I've graduated already but forgot to update my profile. I have a job right now. So my thinking is that if I get a 20k loan, pay it off over 3 years, that's ~7000/year = ~ 650/month. Yes I know I havent taken compounding interest into account but is my logic correct here?

$20k loan sounds like a pretty damn big amount.

unless your job is relatively secure and you know you can pay it off, then go for it.
but like others above me suggested, if you can't afford it, then don't try too hard to buy it.

you don't need a nice car. you WANT a nice car.

there are plenty of cool/fun cars to choose from maybe within half of the price you are looking at right now. ($10k or under)

and you said you wanted 20-25k for a car loan but you have enough for a downpayment? but now you are saying you just want to have that money ready just in case? what's going on here.. haha

Is your job union?

But taking out a loan of that significant amount, you're gonna get raped with interest.

Lets say you want to pay it off in 3 years, annual interest is about 10-12%, the amount that it costs to take out a 25 grand loan is another 5 grand on top of that. Which equals to about 850-950 per month, insurance...lets say 200 more on top, and gas, 200 bucks.

With this rough estimate, the cost tor drive the car per month is almost 1500 bucks per month.

But another loan you can take out is a line of credit, and you'll only get approved for one if you meet the minimum requirements for a specific bank. (CIBC, you need to make 17 grand annually in order to get approved)

Lets say if the annual interest is about 5% and you plan to pay for it in about 4 years, that's about $3000 of interest you pay to borrow $25,000.

Again all of this is a rough estimate.

That's very true

What I mean is that I can buy a car for say 20k. I can finance the whole thing thru the bank, or I can put 10k down and finance 10k thru the bank. It's just get have a bigger loan available provides more "wiggle room".


No. I understand that job security should be a big consideration

Yea, interest can be a pain in the arse. You really put it into perspective for me. I guess if interest is outrageously high, like double digit, then I should really reconsider. Time to meet up with a bank guy.

Yeah talk with the bank guy, another thing is if you have any outstanding loans, then expect the interest rate to be even higher.

Good luck on what you're doing!
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