I'm just turning 18 years old. I have had a couple revolving accounts, my FICO score is at 611, and i want to purchases a new/used vehicle. If i go to a lot how much money down do you think i should need, if any? What type of car do you think I could get or loan? Keep in mind my take-home pay is $1,000 a month.
Thanks for visiting Bills.com. I am glad that you are researching what you should expect when financing a vehicle for the first time.
Unfortunately, many young people find themselves blind sided by aggressive salesmen, who take advantage of the purchasers? naiveté regarding finance terms. However, do not expect to dictate the terms of your loan; given your age and credit score, your interest rate will likely be higher than you would like. You should probably expect to pay between 10% and 15% on a used car loan.
Because of your income level, it is unlikely that you can afford to purchase a new car. Assuming that you will purchase a used vehicle, you should go to the negotiating table with as much cash for a down payment as possible. The more money you have in hand, the more leverage you will have when negotiating the terms of your financing. If you plan to purchase a $10,000 vehicle, are able put $2,000 down, and finance the vehicle for 4 years at 14%, you can expect to pay about $220 per month, which sounds like it is within your means.
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