What would be my min. down payment for a car? Fair credit score?
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Brandon H wants to know:
I have a fair credit score and will be in need of a new car very soon. I know that I need to pay the highest down payment possible, but I want to know an estimate on what my minimum down payment would be. My credit score through Experian in 638.
I am looking for a car somewhere between $10,000 and $15,000. The car I am interested in has a sticker price of $13,998. I am interested in what percent of the price my down payment would need to be.
My existing debts are this. One doctor bill that I have paid off late after it was reported on my credit score. And 2 Student loans that I am caught up on.
I have a fair credit score and will be in need of a new car very soon. I know that I need to pay the highest down payment possible, but I want to know an estimate on what my minimum down payment would be. My credit score through Experian in 638.
I am looking for a car somewhere between $10,000 and $15,000. The car I am interested in has a sticker price of $13,998. I am interested in what percent of the price my down payment would need to be.
My existing debts are this. One doctor bill that I have paid off late after it was reported on my credit score. And 2 Student loans that I am caught up on.
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Tagged with: Credit Score • Doctor Bill
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What price car are you looking at?
Can’t tell. You give no info on what your existing debts are. But as a guide, your car payment and other loan payments (except mortgage) should not exceed 15%-20% of your disposable income. So, enough down payment to get that figure below 15%-20%.
Added: $14,000 is probably what you’ll end up paying even if you negotiate a lower sticker price. They’ll add sales tax and other “fees and charges” to get that number back up. So if you financed $14,000 for 7 years, you’ll pay about $225 at 9% for 7 yrs. So, if you could afford $225 / month, you won’t need any down payment (new cars only). But the lender may want you to take on some risk and demand 10% – 20% down.
Fyi being that your score is through Experian which stopped offering fico scores to the public in feb of 2009 that is a vantage score which basically means nothing.
There is little or no correlation between a vantage score and a fico score.
The only place to get an experian fico score is if a lender pulls your credit through experian and shares the score with you.
Most of the time auto loans are based on an auto enhanced score anyways which again has little or no correlation to a fico score or a vantage score.
And if that were a fico score it would still not be considered “fair” it would be considered “not good”
First of all…start the negotiations BELOW the sticker price. This is not a good market for car sales, so you have more power than you think.
Check the blue book value of the car and start negotiations below that and see where you get.
Also, DO NOT fall for the “how much are you willing to pay each month” line. They take whatever number you give them as your desired monthly payment and will use it to leverage you into a more expensive car, a longer finance term, sometimes even a leased vehicle…or else they’ll tack on mysterious “dealer fees” so as to increase the price and get it within that range. If they try and ask you that question, make sure they know that you are less concerned with the price per month and more concerned with the price of the vehicle. You know what you can afford.
If you end up with a monthly payment that you think is too high, you can either say no to the deal, or try and secure financing outside the dealership.
Anyways, with a credit score of 638 you probably will not qualify for a $13,000 car. I know…I just tried to buy a $13,000 car with a 645 score and the bank wouldn’t loan more than $8,000. So if I were you, I’d aim in the area of a $5,000 down payment. If you were to then buy a car on the lower end up your price scale, you would only be financing $5,000.
Also..with that credit score, be prepared for higher interest rates. I’d say the higher the down payment the better. Aim for AT LEAST 20%, but I think if you can manage $5,000 it will be better for you (if you can’t manage that much, then at least 20%)
10-20%
buildcredit.ifastnet.com – try this service to boost you credit score before getting loan. After credit repair you can get the loan with minimal interest rate.