Bad Credit with Co-Signer that has Great Credit Car Loan Question

[BMEPhDinCO]

Hello everyone, I am new to this forum but I need some advice.


I plan on purchasing a used vehicle and am unsure of what types of interest rates I would approve for. I currently have bad credit due to some credit cards that I had issues with from about 4-5 years ago. The last I checked my credit score is only about a 545. I have not had any money issues over the last few years and am self sufficient and am looking to finally purchase a newer vehicle. I have about $10,000-$11,000(Depending on how much of a difference it makes to my payments) to put towards a down payment and want to purchase one of a couple different Infiniti G35 Sedans which are going for about $19,000-$20,998(One is private party and one is from Carmax) My income is about 35k a year and my dads income is about 70k

My dad has told me that he wants to Co-Sign with me since he knows his credit is phenomenal(He is unsure of what his score is as of recent but he is positive that it is in the 800s, also my mom's is also in the 800s and slightly better than his.)

My questions are:


- If my dad co-signs with me, what type of interest rate could I be expecting.
- Would it be wiser to purchase the vehicle private party and get a loan through my credit union.
- I know that the banks make more when my loan is for a longer period of time but would the difference in monthly payments be big if I took a 60month instead of a 72 or a 48 month instead of a 60?
- Will it make a difference if my dad is the "Primary Borrower" and I am the "Secondary" (This would be preferred if it saves me money)


Any help would be greatly appreciated and please be polite everyone.

Thank you !

Sounds like this is your first big purchase? While I agree with the responses given, I wanted to try and go a little further into it.

1. If your dad did cosign with good credit, the rate could be anywhere between 0%-15%. With a private party and carmax, neither would offer 0%, so you are looking at probably 3-10%.

2. Absolutely you and your dad should look around for the loan - my credit unions are offering less than 4% right now for up to 60 months. If your dad has a relationship with them, that's the first step. Before you even buy the car, arrange the financing.

3. For payments, google "auto loan calculator" - that will help you break it out. Ideally, you shouldn't buy if you can't pay it off in 3 years or less (here, people say immediately pay it off, with cash you have on hand, but that's not always possible). Think about it this way - if your car cost $12k and you did a 5 year loan (60 mo), that would be $200 per month. If you streatched it out to 6 years (72 mo), that would be $168 per month. So $32 cheaper. Of course that's the quick and dirty, use the calculators for more info. Shorter is better.

4. Your dad and you will be equal co-signers. That means BOTH of you take responsibility for the loan. Of course, your dad would hope you pay it, but if you don't make a payment one month, he has to. The flip side is that it will impact both your credit reports - for you that would be good if payments are always made on time. For him, if a payment is missed, it would mess up his credit badly (less so for you).

5. As you mentioned in the next post - yes, this would help your credit equally with your dad's, see #4 above.

My thoughts? Don't buy this car - I know it's really cool and fantastic and looks great...but you can't afford it right now on your own so you can't afford it period. A used Honda Civic would be in your price range and would last you fine for several years while you saved up for another car. And also improved your credit. You should never ask someone to co-sign and you shouldn't put yourself in a position of needing someone to do that.

Best of luck to you.

[disneysteve]

I agree. This is a no-brainer.

1. Under no circumstances should your father co-sign a loan for you, or anyone, ever.
2. You can't afford a $20,000 car on a $35,000 income.
3. Under no circumstances should you be taking out a loan.
4. If you have 10K saved for a car purchase, that means you can spend up to 10K, though I'd advise you to spend less.

Make sure you leave yourself with an emergency fund and don't totally deplete your savings to buy a car.

[bjl584]

This is easy.

Take your $10,000 dollars that you have saved and use a portion of it to buy a used car for cash.

Your credit is trashed. Getting involved with super high interest rates and co-signed loans is not something that you need to do.

On a side note,
If you have $10,000 saved why didn't you pay off your credit cards?

[Ramose]

I'm not too sure about this stuff. The people here always recommend having a emergency fund. Will you be using all the money in your savings? Have you considered getting a cheaper vehicle?

[QuangSiicle]

I forgot to add...

-Would it help my credit if I am the secondary? Or do I have to be the primary borrower for it to help rebuild my credit?

[QuangSiicle]

Hello everyone, I am new to this forum but I need some advice.


I plan on purchasing a used vehicle and am unsure of what types of interest rates I would approve for. I currently have bad credit due to some credit cards that I had issues with from about 4-5 years ago. The last I checked my credit score is only about a 545. I have not had any money issues over the last few years and am self sufficient and am looking to finally purchase a newer vehicle. I have about $10,000-$11,000(Depending on how much of a difference it makes to my payments) to put towards a down payment and want to purchase one of a couple different Infiniti G35 Sedans which are going for about $19,000-$20,998(One is private party and one is from Carmax) My income is about 35k a year and my dads income is about 70k

My dad has told me that he wants to Co-Sign with me since he knows his credit is phenomenal(He is unsure of what his score is as of recent but he is positive that it is in the 800s, also my mom's is also in the 800s and slightly better than his.)

My questions are:


- If my dad co-signs with me, what type of interest rate could I be expecting.
- Would it be wiser to purchase the vehicle private party and get a loan through my credit union.
- I know that the banks make more when my loan is for a longer period of time but would the difference in monthly payments be big if I took a 60month instead of a 72 or a 48 month instead of a 60?
- Will it make a difference if my dad is the "Primary Borrower" and I am the "Secondary" (This would be preferred if it saves me money)


Any help would be greatly appreciated and please be polite everyone.

Thank you !