Car loans for students

[wouql]

Here's my question for people: I'm a college student graduating in May, and I've accepted a job offer.

So I've been out shopping for a car loan. There are two different banks near campus who prominently display banners for graduating students to come in and apply for auto loans. They both have identical graduating-student plans if you've accepted a job offer (with an official offer letter) and have good/ok/no credit (NOT bad credit). The nice part? They will let you defer payments on the loan until you officially start your job. Sounds great.

But it hasn't exactly worked out as well as I'd hoped. I applied at one of the banks, with good credit (730), and a good salary offer (~$58k) and was told I was approved for an auto loan of $8,000. (In addition, one of the terms of this plan is you cannot buy a used car - only new.)

Now I'm not looking to buy a Mercedes or anything, but I can't get into much of a car for $8k plus the few Gs I have saved for a DP. So I applied at the other bank, and was even more surprised to discover they apparently think a $7,500 loan ought to be enough (again, this is for new cars only.)

So I've given up on them, since they don't seem to think part of a college-grad program should be lending enough money to actually buy a car. My question is: Does anyone know of any similar online programs for graduating students? The dealerships also have programs, but none of their college grad promotions will let me defer the payments for 6 months, which would let me get a car now. Or, does anyone have any advice for some other way I could defer payments? Or any other advice?

Thanks for any input.

[sweeps]

Re: Car loans for students

A search on Google pulled this up:

http://www.commercebank.com/personal/personalloans/carloan.asp

Be aware that the interest accrues on these loans while they're deferred.

[wouql]

Re: Car loans for students

A search on Google pulled this up:

http://www.commercebank.com/personal/personalloans/carloan.asp

Be aware that the interest accrues on these loans while they're deferred.

Hahahahahaha.....Commerce Bank IS one of the two lenders I contacted (I go to school in St. Louis - one of only three states Commerce Bank is located).

So thanks, but they're one of the two I struck out on.

[Snoopy2645]

Re: Car loans for students

My best advice to you & you can take it or leave is use the few grand you have saved & buy a car you can get a nice used car for a few grand I have done it several times I have never paid more than that for any car. ANd I havent been driving clunkers either.

[ChillPhatCat]

Re: Car loans for students

You could try to get a co-signer... haveing no credit is no good, you've got to start somewhere.

[Tree0164]

Re: Car loans for students

My best advice to you & you can take it or leave is use the few grand you have saved & buy a car you can get a nice used car for a few grand I have done it several times I have never paid more than that for any car. ANd I havent been driving clunkers either.

Take this advice.. you do not need a brand new car. Buy something use that will get your around. Will help your net worth in the long run alot!

[ChillPhatCat]

Re: Car loans for students

On used cars, with a co-signer I bet you could easily get a loan for a used car up to $10k, many banks will loan you money for used cars up to 10 years old... 10k will buy you a loaded luxury car with under 75k if it is truely what you desire, personally I wouldn't spend that much on a car just for Daily driving duty, but that's just me.

[locolorenzo24]

Re: Car loans for students

How much do you have saved? Myself, I bought a nice 94 pontiac bonneville with 110 thou on it, and did the needed work to it all for around 4000....not too bad. One cravat, whatever you buy used will probably need some sort of work done to it..............

[wouql]

Re: Car loans for students

I didn't mean to turn this into a new-vs.-used debate....

I understand the reasoning that a new car is one of the worst investments you'll ever make. It makes no financial sense to borrow for anything that depreciates that quickly.

That being said, I'm ok with it. I'm young, single, will have a good salary and very low expenses. Even after covering my expenses, maxing out my 401k to company match, and contributing the max for an IRA every month, AND a car payment of $20k for 3 years.....I still have plenty of money I can have fun with or save responsibly. (I'm even planning on using some to pay off the car quickly.)

Is that money I'm spending every month on a car payment being put the absolute best financial use possible? No. But I'm ok with that. It's not imperiling my financial well-being and I'm still saving plenty of money for other things. And it's worth it psychically. I could just buy a beater and get a new one every time I run the old one into the ground. But that wouldn't make me happy. New cars make me happy. (And isn't that why everyone's at this forum? So money doesn't make you unhappy?)

Anyway, didn't mean to get off-topic. My real question was: does anyone have any suggestions for how I could get a car loan now (in January) given that my salary doesn't start until May?

EDIT: I forgot to respond to most in this......I have about $2500 I can use for a down payment. A co-signer is not really an option; I'd have to call up grandparents I haven't seen in a long time, and I'm not certain I feel comfortable asking them to do that for me. I've called some, but I think I might widen my search net for dealerships; thanks Chill

[ChillPhatCat]

Re: Car loans for students

Anyway, didn't mean to get off-topic. My real question was: does anyone have any suggestions for how I could get a car loan now (in January) given that my salary doesn't start until May?

I'd suggest going to some car dealerships and seeing what kinds of deals they can get you. Honestly a car dealership is going to be trying to get you into that car as much as possible, they're the ones you should be talking to. Some even offer financing themselves.

[abowers]

Re: Car loans for students

If you are thinking about a new car, look into the current promotions at dealerships, especially with having good credit.

At Ford, we qualified for the lowest interest rate in October, which was 4.9%, with financing through Ford Motor Company. That was better than any online quote or quote from the bank we belong to. We both just graduated from college in May 2005, so we got a college student rebate of $500 as well. And the nice part about that was all the car and loan paperwork was done in one stop at the dealership, and they took care of everything with getting the car registered, getting plates, etc as well.

You should have no problem getting approved for a loan through the dealership-- I'm making pennies in central NJ as a preschool teacher (probably about $24k/year -- boyfriend is making $27k/year from his grad school stipend) and they approved me for $13,000 of new car loan over 5 years, after putting a few thousand down.

Good luck!

EDIT: With a 730 credit score, you should have no problems with needing to have someone cosign the loan. My boyfriend has a higher score than me (something around 720) and he could have done the loan himself except for that we wanted it to be in my name too.

[Ima saver]

Re: Car loans for students

I can understand wanting a new car, the only used vehicle we bought for $10,000 cash lasted for less than a year. The ones we buy new for under 20K lasted 10 years and were still running.
I would suggest you buy a car now from a dealership. Put down as little as possible and use the $2500 in savings to make the first few months payments til you start your job.

[abowers]

Re: Car loans for students

In 2002 I did buy a 1995 Ford Contour with only 33k miles on it for $4000 -- which was fine for almost a year when I had to start putting money into it to fix the brakes, the muffler, head gaskets, etc. Then while it was parked on the street outside my apartment in May 2005, some drove into it, and it was totalled. So it lasted almost 3 years anyway.
This was after having driven two other used cars before this.

My boyfriend and I shared his car until October, when we decided it would be better in the long run to get a new car for my next car so we didn't have to worry about being lied to about the history of the car, or having unexpected repairs. Plus, with moving to a new area, we aren't familiar with good garages to take a used car to. With the new car we should be able to expect what maintenance work needs to be done at certain mileage points, and we know the car hasn't been driven roughly, etc.

[wouql]

Re: Car loans for students

Thanks to all who replied: I'm posting this here so others who want to know/found-this-thread-on-Google can see my resolution.

The first 3 dealerships I tried I had trouble with securing a loan, so next I went to the banks with college grad programs. Struck out there (see above). When I widened my search net for dealerships (from "within 20 miles" to "within 100 miles" on their website) I found one.

Seems a little strange that the three dealerships near campus had no worthwhile college grad programs to speak of, while one 65 miles away in the middle of nowhere had a great one, but whatever. With a limited but good credit history and a solid job offer in hand, I was approved for a $22,000 at a 6.4% APR.

[Ima saver]

Re: Car loans for students

That is great news!! Go for it!!