~ How much credit do you need to finance / lease a car?

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Thread: ~ How much credit do you need to finance / lease a car?

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    ~ How much credit do you need to finance / lease a car?

    That costs $22-24,000...

    And in general do you need more credit for a regular finance or a lease?

    Also... lol, do any of you know of a good site to check your credit? I went to this one site one time and it was such a rip off. I don't want to do that again.

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    Re: ~ How much credit do you need to finance / lease a car?

    As for your first question about how much credit you need, I don't know because I have never sold a car and the first time I bought one, my credit score was already high. I would assume that unless your credit history is very brief or very unfavorable, you could get a car loan, but you may not get a very good rate.

    As for your second question about where to check your credit score, go to https://www.annualcreditreport.com/cra/index.jsp

    This site was set up after Congress passed a law requiring that each of the three major credit rating agencies (Equifax, TransUnion, and Experian) provide everyone in the US with one free credit report annually upon request. I did it last year and did all three at once, and it literally did not cost me anything for the report itself, although there may be a nominal fee if you want to see your actual FICO score. Not positive about that). Some people do one report every four months or so so they can do a check on their credit throughout the year for free, which is probably what I'll do next time.

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    Re: ~ How much credit do you need to finance / lease a car?

    Many companies have a "First time buyer program" which means, as long as you don't have bad credit, you have a secure job, and a small down payment. They generally will finance you.

    A lease is usually easier to get approved, for reasons like, the ownership is in the finace companies name, you are always ahead a payment, and the payments are lower.

    Some dealers are Recourse meaning that they basically co-sign the deal. But again it generally means more down payment, or better income for them to do this.

    The 3 basic things credit companies look at, income (ability to repay) job security, and past credit exprience.

    Thats how it works in Canada anyways.

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    Re: ~ How much credit do you need to finance / lease a car?

    Job security? Is that thins like how many times you have been fired, and how long you have been working?

    I owe ~$5,000 on my Vibe, and I figure I should be able to get 9k for it. So... can I use that money as a down payment? Or does it go to the new car in a different way?

    Also I have no idea how leases work. Do they onlt come around every so often for specific cars, or can you get one on pretty much anything?

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    Re: ~ How much credit do you need to finance / lease a car?

    Quote Originally Posted by I-Love-Pontiac
    Job security? Is that thins like how many times you have been fired, and how long you have been working?

    I owe ~$5,000 on my Vibe, and I figure I should be able to get 9k for it. So... can I use that money as a down payment? Or does it go to the new car in a different way?

    Also I have no idea how leases work. Do they onlt come around every so often for specific cars, or can you get one on pretty much anything?
    I'm not too sure about the job security thing, but I'll assume they'll look at the number of jobs you've held against your age (many jobs for a young person may indicate the inability to hold a job) or if you've been without a job for long periods of time (which would make making car payments pretty difficult).

    Leases are pretty simple. I'm sure some of the sales people here could explain it better, but basically you pay for the portion of the car you will use. For example, if a $23,000 car has a residual of $15,000 after three years, your payments are based on $8,000 plus interest over three years. Breaking your lease can also be difficult, either because you lost your job or you want to trade up or down, and you just simply can not sell the car (since the technically don't own it).

    You can sign a lease anytime of the month on any car.

    The problem with leasing is you never own the car. After paying $8000 plus interest over three years, you're left with nothing. I am currently leasing my van, but I don't want to lease my next car. I want to look forward to the day of not having any car payments...

    Good luck.
    Last edited by Family Man; 07-28-2006 at 02:29 PM.

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    Re: ~ How much credit do you need to finance / lease a car?

    When I sold cars awhile back, you needed a really high beacon 750+ to get a lease. I think a conventional loan would be best for you. You can get approved for a car pretty easily. Just do not go from one dealer to another. Every time you start paperwork, the dealer most often pulls your credit. Then they send your app to a bunch of banks and then whoever approves you is your bank. If you get denied and the dealer tells you there is nothing he can do, wait awhile before you go shopping again. Everytime you get your credit pulled, it shows up on the report and your score goes down a few points. The credit report website that 69firebird400 told you about is good, but will not show your beacon score. You have to pay extra for that. I would suggest a credit union if you are a member first. They normally have good rates and can sometimes get a vehicle for a great price for you! Good Luck!

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    Re: ~ How much credit do you need to finance / lease a car?

    do you have limited credit, or bad credit?

    if you have been paying the vibve on time, you are just dandy ... check your score to be sure everything on the report is corect and to know your score - anything over 700 and you are green... over 650 should still let you have a decent rate.

    I purchased my first car - a Focus with nothing but a 4months old $200 credit card - I did pay up my nose for the interest, but when I bought my next car - a used Mazda3, my interest is much better ....

    Igor

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    Re: ~ How much credit do you need to finance / lease a car?

    Sorry job security is how long have you been employed, and at a steady job. Not 2 months here 6 months there.

    If you have just switched jobs but for an increase of income is usually ok, but 3 jobs in 2 years gets them nervous.

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    Re: ~ How much credit do you need to finance / lease a car?

    Quote Originally Posted by Family Man
    I'm not too sure about the job security thing, but I'll assume they'll look at the number of jobs you've held against your age (many jobs for a young person may indicate the inability to hold a job) or if you've been without a job for long periods of time (which would make making car payments pretty difficult).

    Leases are pretty simple. I'm sure some of the sales people here could explain it better, but basically you pay for the portion of the car you will use. For example, if a $23,000 car has a residual of $15,000 after three years, your payments are based on $8,000 plus interest over three years. Breaking your lease can also be difficult, either because you lost your job or you want to trade up or down, and you just simply can not sell the car (since the technically don't own it).

    You can sign a lease anytime of the month on any car.

    The problem with leasing is you never own the car. After paying $8000 plus interest over three years, you're left with nothing. I am currently leasing my van, but I don't want to lease my next car. I want to look forward to the day of not having any car payments...

    Good luck.
    Now when your lease is over do you have the option to buy the car the car off? And if you do have that option, would you have to pay off the $15,000 within the next 3-5 years?

    I think the idea of a lease is very appealing. You get to have a car that you normally couldn't afford. But the thing is you are spending almost $10 a day for pretty much renting a car. Although that's a cheap rental, like someone else said at the end you are left with nothing even though you spent +$8,000.

    The only thing is though, I dont know if when the Vibe gets paid off how long I'll keep it. If im just going to get rid of it in a year anyways, then it really doesnt matter if I just get a lease.

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    Re: ~ How much credit do you need to finance / lease a car?

    GMAC ("the financial people of General Motors" - their words, not mine) has a very detailed website on vehicle financing called SmartEdge. The website also has a short guide on how to get a free credit report every year on the bottom right-hand area of the home page.

    Not to mention that there's a contest to win an HHR, Cobalt, XM RoadyXT, Lowe's gift card, or iTunes gift card (the last three are instant-win things after you register).

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