Help me , Im buying a car ?

Question

I make 800 a month, the car I want is 4,500

Interest rate of 7.16%

Heres the calculation form , But I don't know what to put for 'trade in value' and 'sales tax'.

http://www.cars.com/go/search/detail.jsp;jsessionid=00olhJiqRQgjZBGant6yoXC?tab=finance&paId=281833648&recnum=9&actLog=true&tracktype=usedcc&pageNumber=0&numResultsPerPage=50&largeNumResultsPerPage=0&sortorder=descending&sortfield=PRICE+descending&certifiedOnly=false&criteria=K-%7cE-%7cM-_34_%7cB-5000%7cD-_312_%7cN-N%7cR-50%7cI-1%7cP-PRICE+descending%7cQ-descending%7cZ-60064&aff=national

How much should I put down ?

And how much should I pay each month ?

And for how many months ?

Answer 1

If you have no trade put zero. Sales tax put in what ever your state / county sales tax is. I would guess that $4500 car is older you will be lucky to find a lending institution that will go over 36 months if the car is more than 6 years old, so use that for a base. I would guess that your payments should be under $200 a month for 36 months. Good Luck.

I looked at your form if your sales tax is 6% like my state & you put down $500 your payment will be about $145. Now dont forget you will need to pay a dealership document fees and the state for a vehicle registration. These should add up to about another $250. Also in most states you will need proof of insurance, so you will need to get insuance and pay for that before the state will issue the registration. Try putting the vehicle & your personal info into one of the online insurace websites to get an idea of the insurance costs.

Answer 2

I've sold new and used cars for over 35 years so I hope I can shed some light on this situation for you. First and foremost, you most likely are NOT in Calif. I've sold only in this state. Laws and regulations vary. But there are many things all states have in common.

To answer your first question, it's the lender, not the buyer, that sets the minimum down payment. To qualify for the loan, you'd need to come up with whatever is asked for. If you are buying from a new car dealer, it's possible you could be financed through their lending arm, such as GMAC or Ford Credit. If you're buying from a used car lot, you'll go through a bank or another institution. And they have higher requirements for a down payment.

How much should you pay per month? One thing lenders look at is your debt to income ratio. Your debt should not be more than 34% of your gross monthly income, or $217.60 in your case. This means that ALL your expenses (rent, utilities, insurance, food, credit cards, etc) cannot total more than that. Subtract your current monthly expenses from $217.60 and that's what you can truly afford for a car.

How many months? Again, that's up to the lender. Three factors are considered: age of the car, mileage of the car and the selling price. The older and/or higher mileage the car is, the less months the lender is willing to offer you to repay the loan. And for smaller loans, such as yours, they may shorten it to a maximum of 24 to 30 months.

There are other very important varibles you haven't listed. Such as: your age, your credit history, length of credit history, previous car loans. Also, any damaging derrogatory reports, such as: bankruptcy, repossessions, charge offs, skip-trace? These things will get you an immediate turn down.

Regarding your interest rate, it's all based on your credit report. A high FICO score does you no good if you've only been reported for less than a year. And all you have to show on your report is department store credit card. FICO score and length of history go hand in hand when it comes to a lender making a decision.

The rate you quote, 7.16%, most likely is for well qualified buyers. You need to have your credit run and then ask what you qualify for before you begin to do the paperwork. That way you won't be disappointed if you're turned down. Or shocked by a higher interest rate on the purchase contract.