I'm buying a new car, but does this sound like the best deal i can get?

Question

So, I've been looking for my first car for a long time, and yesterday I found one that I really like. It was a used 2007 Chevy Cobalt with about 33,000 miles on it. Nothing waswrong under the hood, and there were no scratches (well, that I noticed anyway). The price was 13,600, but we managed to get it down to 12,000. The only problem was that my cosigner had a credit score of 584, and they told us that they could finance us for 19%. We walked away, and they called us back saying they got it down to 11.99%. Should we walk away and find another car? Or does this seem like a pretty good deal? An I paying too much for the car? Oh, and we're puting $500 down, $1,000 if absolutely necessary. Is it possible to get this down to a note of $220 a month?

Answer 1

Actually, 12% is about the best you're going to get with your credit score. I guarantee you that no Credit Union is going to do better than that with your credit.

If you decide to buy the car, make sure that you have final approval for the loan BEFORE taking delivery of the car. It is common practice for car dealerships to allow you to take they car upon the impression that you are getting one interest rate, then to call you a week after you've taken the car and tell you that you were not approved and you must pay them more money or return the car.

Answer 2

It's an OK deal as far are price.  I think you could find better and if I were in your shoes, I'd be looking for a used Honda or Toyota.

Ok, regarding the financing.  Why do you need a cosigner with such poor credit?  That is terrible credit.  Also, 12% interest on a vehicle loan is terrible.  Anything over 10% is highway robbery.

I would recommend going to a CREDIT UNION and seeing what they can do.  They have different lending guidelines and will work to get you the best deal - remember, credit unions are non-profit.

Also, if you do decide to get this car, DO NOT leave without a signed contract.  It is common practice for some dealers to promise a low interest rate and have you take the car then several days later offer you a higher interest rate only - or they come get the car.

Also, dealers are only in this to make gobs of money - get approved through a good credit union and go buy a car from a private party.

Answer 3

A 7 pnt drop is pretty dramatic. They hit you with whatever your state max is.....ask for 9.99, and call it a day!

Answer 4

You probably can but you will have to extend the term of the loan  to about six years at 11.99% and with a thousand dollars down your payment is $232.59.  This is fine if you can pay extra every month and pay it off early.  Otherwise you would be paying a lot more interest than I'm sure you would have liked to.