[TomBox_N]

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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[GabAlmighty]

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.

[fishing666]

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.

[4444]

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 :)

[Redlines_Daily]

^ 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.

[vafanculo]

Try n get a personal loan first, and not a car loan.
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[FerrariEnzo]

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...

[orange7]

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.

[orange7]

. double post

[tofu1413]

Try n get a personal loan first, and not a car loan.
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+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.

[oldsnail]

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

[smoothie.]

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.

[ShyGuy]

are you able to get a line of credit?

[GabAlmighty]

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...

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.

[TheSalesman]

What kind of car are you looking for?

[Lomac]

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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[TypeRNammer]

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.

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.

[TomBox_N]

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

[freakshow]

Hmmm, it seems that there r 2 school
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.

[TomBox_N]

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?

[jstn86]

$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

[GabAlmighty]

Is your job union?

[TypeRNammer]

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?

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.

[TomBox_N]

$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

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".


Is your job union?

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

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.

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.

[TypeRNammer]

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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[Jgresch]

I'm confused as to how much $$ you're putting down.

If you haven't taken out any large loans before, you will have a lot of trouble getting approved for 15-20k if your highest credit right now is a 1000-2000 credit card.

If you are in good financial standing/have a steady job(that you've been at for a while)/put a decent amount down, you should be approved. But its hard to make a jump from no loans at all and a little credit card to a huge loan (if this is the case).

[TomBox_N]

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!


I dun have any outstanding loan, so that's a plus.

I'm confused as to how much $$ you're putting down.

If you haven't taken out any large loans before, you will have a lot of trouble getting approved for 15-20k if your highest credit right now is a 1000-2000 credit card.

If you are in good financial standing/have a steady job(that you've been at for a while)/put a decent amount down, you should be approved. But its hard to make a jump from no loans at all and a little credit card to a huge loan (if this is the case).

That's the thing, I'm still deciding how much I should put down. What I'm thinking is that when I go to the bank, I'll ask them to work out different scenarios for me. What's the rate/payment if I pay 0 down, if I pay 5000 down...so on & so forth. Then I will decide how much down I should make. Does what I'm doing that make sense?

My situation is that I have never had a loan before. But I have a couple credit cards that have 5,000+ limits (If that means anything) which I rarely use past the $1,000 mark unless I'm paying tuition. I do have a steady job that I've been at for close to 2 years.

[4444]

^ 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.

no, we're not talking about houses - but yes, i would never finance a car, unless it made economic sense for me to do so,

cars are a waste of money, something like a house shouldn't be, and in most cases, isn't

[Jgresch]

I dun have any outstanding loan, so that's a plus.



That's the thing, I'm still deciding how much I should put down. What I'm thinking is that when I go to the bank, I'll ask them to work out different scenarios for me. What's the rate/payment if I pay 0 down, if I pay 5000 down...so on & so forth. Then I will decide how much down I should make. Does what I'm doing that make sense?

My situation is that I have never had a loan before. But I have a couple credit cards that have 5,000+ limits (If that means anything) which I rarely use past the $1,000 mark unless I'm paying tuition. I do have a steady job that I've been at for close to 2 years.

Chances are they will tell you either way what your options are, I doubt they would approve you with zero down, as 5k-20 is a huge jump. But they will probably ask you to put a certain amount down and then they would approve the rest.
Your best bet is to go in with a list of questions you have. I'm sure someone qualified to help will do everything they can to earn your business.

[oldsnail]

so what kind of car are you getting?

[TomBox_N]

Chances are they will tell you either way what your options are, I doubt they would approve you with zero down, as 5k-20 is a huge jump. But they will probably ask you to put a certain amount down and then they would approve the rest.
Your best bet is to go in with a list of questions you have. I'm sure someone qualified to help will do everything they can to earn your business.

I agree. This thread certainly raised some questions that I should ask the financial advisors

so what kind of car are you getting?

I don't know yet. Maybe a 350Z or an older AP1 S2000

[TypeRNammer]

I agree. This thread certainly raised some questions that I should ask the financial advisors



I don't know yet. Maybe a 350Z or an older AP1 S2000

There's a nice yellow ap1 across the border for a really good price;)

[optiblue]

I'm financing a 55k loan XD

[TheSalesman]

I don't know yet. Maybe a 350Z or an older AP1 S2000

I know someone that has a mint black on black AP2 for under your 25-30 budget.

[Amaru]

Man, some of you guys are paying crazy interest rates on your loans. I've got a $15,000 personal loan from RBC and my interest rate is 6.53%. Granted, I have a good relationship with the bank and a few other savings/RRSP accounts... but still, I'm hardly wealthy.... so it seems crazy that you would be paying 12% interest on a personal loan. I'd think 8% (or less) would be a more reasonable target interest rate at the moment.

OP - here's what I would do in your hypothetical situation:

1) Let's say you have $8,000 cash at the moment... and you're going to spend no more than $20k on a car, including tax.

2) I'd put $2,000 away in a hidden (but liquid) "rainy day fund". This is in case you get stuck with unexpected expenses or lose your job and need to make a loan payment. Always a very wise thing to have.

3) I'd keep $1,000 cash for daily spending, initial car expenses, etc. This leaves you with $5000, which will all go towards the cost of the car.

4) Now, you need $15k. I'd get a 3-year personal bank loan for this amount... if you can get an interest rate around 8%, for example, your monthly payments will be approximately $480. Very manageable if you've got a decent income stream, and your $2000 contingency fund should cover you for a month or two if shit hits the fan or you lose your job.

Anyway, that's what I would do... but I wouldn't spend more than $20k on the vehicle, and I'd get something that's reasonably reliable and won't depreciate like crazy.

[hchang]

And no, my mom isn't paying anything.

Tia
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Is your dad paying anything then?

Jokes.

I'd go with what Amaru suggested above.

Personally I wouldn't take out any money if I know I can't pay out cash with it. Your opinion on things would change, and you might want to do something else with your money, which could suck. I put most of my money down into a GIC for 3 years about a year and a half ago, and now it kind of sucks because I can't use the money for things I want.

Over the years I've been needing to spend more on other things, so the cash I thought I could be using towards car funds, insurance and gas were cut.

Just be careful with loans IMO.

As mentioned already job security plays a big role. Now if I don't NEED something, I try not to buy it.

[TomBox_N]

Great advice guys. Car repair can be a bitch sometimes and they always seem to come at the most inconvenient times.

Anyway, I can always hold off for another year and not get a loan at all. Maybe that's the most sensible thing to do afterall.
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[impactX]

Man, some of you guys are paying crazy interest rates on your loans. I've got a $15,000 personal loan from RBC and my interest rate is 6.53%. Granted, I have a good relationship with the bank and a few other savings/RRSP accounts... but still, I'm hardly wealthy.... so it seems crazy that you would be paying 12% interest on a personal loan. I'd think 8% (or less) would be a more reasonable target interest rate at the moment.

OP - here's what I would do in your hypothetical situation:

1) Let's say you have $8,000 cash at the moment... and you're going to spend no more than $20k on a car, including tax.

2) I'd put $2,000 away in a hidden (but liquid) "rainy day fund". This is in case you get stuck with unexpected expenses or lose your job and need to make a loan payment. Always a very wise thing to have.

3) I'd keep $1,000 cash for daily spending, initial car expenses, etc. This leaves you with $5000, which will all go towards the cost of the car.

4) Now, you need $15k. I'd get a 3-year personal bank loan for this amount... if you can get an interest rate around 8%, for example, your monthly payments will be approximately $480. Very manageable if you've got a decent income stream, and your $2000 contingency fund should cover you for a month or two if shit hits the fan or you lose your job.

Anyway, that's what I would do... but I wouldn't spend more than $20k on the vehicle, and I'd get something that's reasonably reliable and won't depreciate like crazy.

Agreed.

The bankers are probably laughing their asses off making a killing @ 12% interest.

At the same time, if I only have around 8k, I wouldn't spend 20k on depreciating assets. There are other ways to enjoy life without a flashy car. The most sensible thing to do would be to invest your money.

[no_clue]

if you own a home, try applying for a HELOC.

[Gh0stRider]

I'm financing a 55k loan XD

evox..lol

[TypeRNammer]

Man, some of you guys are paying crazy interest rates on your loans. I've got a $15,000 personal loan from RBC and my interest rate is 6.53%. Granted, I have a good relationship with the bank and a few other savings/RRSP accounts... but still, I'm hardly wealthy.... so it seems crazy that you would be paying 12% interest on a personal loan. I'd think 8% (or less) would be a more reasonable target interest rate at the moment.

Wow guess I need to switch banks! (or maybe not:p)

Guess I landed with 12% because I had an outstanding loan, which was my CSX.

Hopefully it should be as low as you now.

Thanks for the good tip!

[tacobell]

I'm assuming you don't have a home so you can't get HELOC, but go into your bank, preferably your home branch since you have a history there and ask about obtaining a personal line of credit. Prime right now is 2.5%, depending on your credit history, you may get prime plus 1-3 In terms of cost savings, this is the most ideal option, bonus that it's an open loan so if you have extra money saved up on any given month, you can put it towards the loan, pay off the loan faster.

If they won't approve you for PLOC, then ask for a car loan, they'll secure your loan against the car. The interest rate will be slightly higher, but since you have a full time job with over two years at same company, you'll almost certainly be approved for this.

Whatever loan amount you ask for, just make sure you don't over extend yourself. Have fun and enjoy the summer cruises.

[optiblue]

evox..lol

Looking back, all I have to say is at least it's 0%... I wish I bought a used s2k, evo ix or sti cash deal :cry:

[brute_4s]

Try n get a personal loan first, and not a car loan.
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i found that to be nearly impossible.....made a decent wage 3 years running (between 65-80k) and it was all legit......went for a personal loan and got denied...i even owned and still do own a house at that time...and that was for only a 10000 dollar loan. ended up getting a vehicle loan and got raped with a 10% interest rate and stupid me i still took it.

then again i was 20 years old when i did that. 23 now, still regret i did that but hey i also still love the car. even tho im still paying for it and it has a blown transmission.......fuck

[Amaru]

i found that to be nearly impossible.....made a decent wage 3 years running (between 65-80k) and it was all legit......went for a personal loan and got denied...i even owned and still do own a house at that time...and that was for only a 10000 dollar loan. ended up getting a vehicle loan and got raped with a 10% interest rate and stupid me i still took it.

then again i was 20 years old when i did that. 23 now, still regret i did that but hey i also still love the car. even tho im still paying for it and it has a blown transmission.......fuck

You owned a house, earned $65k+ the previous three years, and they wouldn't loan you $10k? That's ridiculous. What bank? Do you have horrific credit, or a massive mortgage? Usually banks will happily hand out a $10k line of credit if you've got a steady job.

[brute_4s]

You owned a house, earned $65k+ the previous three years, and they wouldn't loan you $10k? That's ridiculous. What bank? Do you have horrific credit, or a massive mortgage? Usually banks will happily hand out a $10k line of credit if you've got a steady job.

unfortunately this is the problem with my job. its a union job that doesnt guarantee work so technically i have no set income....bank didnt like that and thats not the only problem ive had with that bank....when i went to talk about mortgages and just wanted them to draw up a scenario every bank was more than happy to, except mine....i was 18 years old, and the guy specifically said, "before i do this for you can i see some paystubs, i just want to make sure u make enough money b4 i waste my time"

also it wasnt for a line of credit....i asked for a personal loan....i already had a line of credit of 12 grand but i didnt really want to tap into that just in case work died for me which it did 2 years later.

needless to say i didnt get a mortgage from them. but the guy did find out a week later that i bought a house and apologised to me. not much good about that bank. except that theyre oped 8 till late 6 days straight (hint hint) BMO FTW IMO

[Amaru]

unfortunately this is the problem with my job. its a union job that doesnt guarantee work so technically i have no set income....bank didnt like that and thats not the only problem ive had with that bank....when i went to talk about mortgages and just wanted them to draw up a scenario every bank was more than happy to, except mine....i was 18 years old, and the guy specifically said, "before i do this for you can i see some paystubs, i just want to make sure u make enough money b4 i waste my time"

Gotcha. Still seems crazy that they wouldn't give you the loan, but I guess if you already had a mortgage and a line of credit, and didn't have guaranteed hours, it makes a lot more sense.

also it wasnt for a line of credit....i asked for a personal loan....i already had a line of credit of 12 grand but i didnt really want to tap into that just in case work died for me which it did 2 years later.

Really..? I would think that you'd be way better off having a line of credit than a loan if you were concerned about job security.

With a loan, you have to make payments each month. You might be able to skip a payment here and there but for the most part you've gotta make the payments every month.

With a line of credit, on the other hand, you can just pay the interest each month and not worry about repaying the principle. That buys you a fair bit of time if you need to find a new job. Plus if you haven't already maxed out your line of credit you could even take another chunk of money out to cover the interest payments while you were unemployed. Seems to me like a line of credit is a safer choice if you're worried about losing a job.