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ChihuahuaMomma · May 1, 2011, 10:58 AM

How can someone with NO credit and some things in collections get a new car? I've heard there are places that can help get a new car with bad/no credit but I don't know where to start and I'm afraid the interest rate would be sky high and the insurance, too. Can you all help me with advice and information. If it helps I live in Portland, Oregon.

DoulaLC · May 1, 2011, 11:08 AM

Do you have any money saved to put down on a car? Another car that is paid off to trade in or that you could sell yourself first? Do you know what type of car you are interested in... make, year?
Do you belong to a credit union, through your work perhaps?

Most of the bigger companies will have a number of banks or credit unions that they deal with. Some will be specifically for those with credit problems.

If you are going to take a loan, I don't know of any way around the higher interest rate. Some will work with you on older cars, or cars with higher miles, some will not.

I'd go into a couple of dealers near you, explain your circumstances, and see what they might be able to come up with to get you into a car at a cost that is comfortable for you.

ChihuahuaMomma · May 1, 2011, 11:11 AM

No money saved (all going to pay off that debt). I do have a paid off car to trade in/sell to put down for another car. I don't want an older model car. I want something reliable. That's why I want a new car. I'm tired of hand-me-downs... I do NOT belong to a credit union. There are millions of dealers here, I don't really have time to go in and explain my situation. That's why I'm looking for advice here.

DoulaLC · May 1, 2011, 04:04 PM

You might want to check into what you could get for your car if you sell it on your own... on kelley blue book for example. In most cases you will be able to sell it for more than a dealer will give you on it as a trade. It can be a bit of a hassle, so you'll have to decide which way you want to go on it.

Instead of a "new" car, consider one that is maybe a couple of years old. It would still be under warranty, but you will pay less for it... considerably less.

Another option might be to contact your bank and inquire about getting pre-approved for a loan. That way you can go into a dealer and have a pre-approval in hand. It could be challenging however if your credit is in the process of being rebuilt.

You might find yourself in a situation where it is difficult to get a loan due to what your credit may be like, which then makes it a challenge to use a loan to boost your credit.

One more possibility is to check with some independent dealers... not big name companies. You can get some decent deals that way, but I would suggest, if you are not very car savvy, to take along someone who is to help check out cars. Sometimes they will allow you to take a car you are considering to your own mechanic to have it checked over as well.

Alty · May 1, 2011, 04:14 PM

CM, I just got a used car, and we had problems getting the financing.

We have pretty good credit, but last year the kids both needed very expensive dental work done, so we decided not to make a payment on our visa card that month. We didn't have the money after spending thousands on dental work.

Well, that one missed payment really did a number on our credit.

When we went to get the new car (well, new to us) we had tons of rejections. One company agreed to give us financing but at 19% interest. At the end of the term we would have ended up paying almost 20,000 more for the car then what it was listed at. Not happening.

The finance officer at the dealership was great. He pulled some strings and got us a better rate. Not a great rate, but we have the option to refinance in 6 months, if no payments have been missed (which they won't be).

You may have to take a very crappy interest rate, but ask if you can refinance if you show that you're good for the payments for 6 months or so.

All the places that say that your credit doesn't matter will charge you an arm and a leg in interest. Shop around, find a dealership that will do it's best to get you a good rate. You won't get an ideal rate because of your credit, but, if you can handle the payments and you're sure you won't miss any, then this is the only real way to build up your credit again. Also ask if you can refinance to a better rate if you prove that you're good for the payments after 6 months.

ChihuahuaMomma · May 1, 2011, 04:55 PM

Originally Posted by DoulaLC

You might want to check into what you could get for your car if you sell it on your own....on kelley blue book for example. In most cases you will be able to sell it for more than a dealer will give you on it as a trade. It can be a bit of a hassle, so you'll have to decide which way you want to go on it.

Instead of a "new" car, consider one that is maybe a couple of years old. It would still be under warranty, but you will pay less for it...considerably less.

Another option might be to contact your bank and inquire about getting pre-approved for a loan. That way you can go into a dealer and have a pre-approval in hand. It could be challenging however if your credit is in the process of being rebuilt.

You might find yourself in a situation where it is difficult to get a loan due to what your credit may be like, which then makes it a challenge to use a loan to boost your credit.

One more possibility is to check with some independent dealers....not big name companies. You can get some decent deals that way, but I would suggest, if you are not very car savvy, to take along someone who is to help check out cars. Sometimes they will allow you to take a car you are considering to your own mechanic to have it checked over as well.

I've actually already done the KBB. So I know that part. I can't get a loan from my bank, I've tried. I will look into some smaller dealers.

ChihuahuaMomma · May 1, 2011, 04:57 PM

Thanks for the advice, Alty.

excon · May 1, 2011, 05:03 PM

Hello M:

Try Car Hop in Portland.

excon

Alty · May 1, 2011, 05:06 PM

Originally Posted by ChihuahuaMomma

Thanks for the advice, Alty.

No problem. I hope it works out.

It was really stressful for us. We needed to replace our van. Personally, I've had two new vehicles, and I'll never buy new again. It's not worth it. I prefer a reliable used vehicle for 1/3 of the price as new. My van was bought new, in great condition for a 10 year old vehicle, only 65,000km on it (40,000 miles). We paid almost $40,000 for it new. We sold it for $2,000, and we had to beg to get that.

As soon as you drive that new car off the lost, it's worth 1/3 less then what you paid and depreciates quickly. You'll never ever see the money you put into it, and most times, by the time you finish paying it off, it's time to buy another.

If you're determined to get new, try looking into a lease. It's a bit more flexible then financing. The only problem is if you plan on purchasing it once the lease is done. If you haven't fixed your credit by then, you won't get the financing to buy out the vehicle.

When we got the Jeep (the one we just bought) we started with a cap of $250/month payment. Because of our credit, and the fact that we could only get one company to give us a half decent rate (we're still paying 12% interest) we're paying $116/week. Of course we can re-finance in 6 months, which we will do. Also, because of our one missed payment, we also had to get an extended warranty ($4000) so that the bank would finance us. They wanted to ensure that we wouldn't miss payments to fix any problems with the car. :(

It was all one big mess, and all because of one stupid missed payment of $150. :mad: