Help with my nephews first car

[chadtm80]

He is wanting to buy a new car (well used, but new to him)
I am cluless on car buying. He ran is credit score on the frecredit report.com site.. Comes back with a 576 score.. He is looking for like a 20 grand car... anyway he can get this done with out a co signher?

[pojo]

how old is he? If he is a minor, then yes he will need a co-signer... If the car is not paid in full, car insurance will have to be full coverage not just comp. I would talk to the insurance company about the possibility of the type of car (make, model, year, etc) and also talk with the bank about the car loan.

My first car I bought at 21... thankfully, I didn't need a co-signer, but I put full coverage on the car even though it was paid off a purchase. (1998 Cavalier).

[angelwing]

I was stuck getting a 1995 Nissan Quest that I paid for in full with cash beacuse of my credit score 2 years ago ($4300)and I still have it and it runs great. You're best bet is to talk to the bank and the car dealer, it sounds like he will have to have a co-signer.

Kinda off-topic...I'm working with a loan officer as I am trying to buy a house and working on my credit report, I don't know how fast he wants to buy the car, but if he can clear up some of the stuff on his credit report, it will help with his score and with him getting a loan.

[gtalum]

You didn't say how old he is, but he'd be best off finding something he can pay for in cash. Especially so if he's very young. Many people start a life of debt overload by borrowing for a car they can't afford early on.

With a 576 credit score, he will get ripped off on a loan anyway if he can even find one.

A good trick is to pay cash for a car, and then take the money that would have otherwise gone towards the loan payment and put it in a savings account instead. I recommend ING Direct as they are paying ~4.5% interest. That way he'll have money for repairs as they're needed (and they will be necessary on an older car) AND in a few years he'll have a good nest egg to buy his next car with. It doesn't make good financial sense to take out a loan for a depreciating asset like a car.

[fwbbreeze]

He is wanting to buy a new car (well used, but new to him)
I am cluless on car buying. He ran is credit score on the frecredit report.com site.. Comes back with a 576 score.. He is looking for like a 20 grand car... anyway he can get this done with out a co signher?

Ditto what gtalum said. Being in the financial services industry I understand credit rather well. He has obviously had some serious credit problems in the past. More than likely if he finds someone to loan him the money it will be at a very high rate, probably in the upper teens. He needs a cosigner if he wants a better rate and to be honest it is probably gonna take one to get him qualified for a loan.

fwbbreeze

[coriolis]

Payments for a $20,000 car plus insurance for a young male are probably going to be like $500 per month or more. What kind of job did you say he has? If he's a college grad and promising young professional, then maybe its ok.

If he's a HS grad just starting out, there's a much less job security. If something happens to his job then he loses the car and gets even more bad credit. If that's the case he should spend 2 thousand cash on a used car, get minimum insurance coverage, and then he'd have money for gas.

Some dealers will sell cars and offer dealer financing to bad/no credit people and use a remote device that can disable the car. If you're late on your payment, they disable the car. I know a guy that got a $20,000 truck with that arrangement. It forces you to make the payment.

I already told my kids that I'm not co-signing any car loans, that they have to get a job, and pay their own insurance, and buy their own car.

They're just not responsible enough to have it given to them and I can't afford it for four sons.