1st Time Car Loan Questiom

[Oakstir]

I have no credit. But I have a job that pays well. I just want to know what the requirements for the loan will be, and how much I can expect to pay per month on a $10,000 loan. And how much extra I can expect to pay on full coverage insurance as opposed to liability insurance. I am embarrassingly financially literate when it comes to this subject. So any and all input is welcome and greatly appreciated. thanks everyone!

[mystang52]

I can't answer your questions concerning requirements for getting a loan. But you can use this calculator to estimate your payments for a given interest rate:

Amortization Schedule Calculator

[brewer12345]

Easiest way to guess at full coverage vs. liability only is to call your insurer or an independent agent. Lots of variables affect this, so no easy way to cuff it.

Shop credit unions as well as banks for car loans. Sometimes the credit unions are a LOT cheaper.

[pb4uski]

Quote:

Originally Posted by Oakstir I have no credit. But I have a job that pays well. I just want to know what the requirements for the loan will be, and how much I can expect to pay per month on a $10,000 loan. And how much extra I can expect to pay on full coverage insurance as opposed to liability insurance. I am embarrassingly financially literate when it comes to this subject. So any and all input is welcome and greatly appreciated. thanks everyone!

Where you say you have no credit do you mean you have no credit history at al or a poor credit history? Either way your interest rate, and therefore you monthly payments, would be higher than normal to reflect the higher risk compared to someone with a good credit history.

Insurance varies a lot from place to place so the only way to find out is to price out a policy which can easily be done online. For my two cars, collision/comprehensive is about the same as liability coverage, so full coverage is about twice liability only.

If you have a credit union near you, go talk to them about establishing a credit history, getting a credit card (and pay to in full every month) and possibly an auto loan. DS had no credit history a year ago, got a low limit credit card secured by his savings account and now has a 710 FICO score after recently getting an unsecured credit card.

[aja8888]

If you finance a car, the lender will insist that you have collision and comprehensive coverage to cover their loss since they will have a lien on the car.

[ExFlyBoy5]

Well, interesting first post...welcome to the forum.

Out of curiosity, is there a particular reason you chose this forum (early retirement) to ask about a first time car loan?

Sent from my mobile device so please excuse grammatical errors.

[unno2002]

Before physically shopping for a car, consider going to your selected financial institutions and getting yourself pre-approved for a car loan amount… I personally would not want to try and arrange financing thru a dealer…

[MRG]

Your credit rating impacts your cost of insurance. I'm with the folks that think you should improve your credit score. Lower payments and lower insurance bills.

Sent from my SAMSUNG-SGH-I337 using Early Retirement Forum mobile app

[jerome len]

Start with a bank or credit union that you have done business with.......get a free credit score, someone else can help or just google, "free credit score" .....then compare your best deal with what the dealer can offer.....long at rate, length of loan, % of purchase price financed......then, if you don't have bad credit, take your best deal and if the rate is higher than 5 to 8% make your 1st few payments on time and take your payment book to your credit union.....they'll look at your record, give you their best deal and you'll be all set. Good Luck!

[Walt34]

Quote:

Originally Posted by unno2002 Before physically shopping for a car, consider going to your selected financial institutions and getting yourself pre-approved for a car loan amount… I personally would not want to try and arrange financing thru a dealer…

Agreed - the dealer will strive to get a loan for you to sell the car but they of course aren't making the payments so they don't care what the interest rate is. If it is 28% they don't care. But you should.

If you have the time to do so get a credit union or (if you must) a bank credit card and establish a history with that. Pay it off in full every month. You don't have to spend a lot, just buy a shirt or a pair of socks, lunch at McDonald's, fill your car with gas, anything you would have bought anyway. When you pay it off that establishes that you are a reliable borrower and thus are a good credit risk.