Can someone help a kid understand bank auto loans?

Re: Can someone help a kid understand bank auto loans? (Natty)

First off, here is a payment calculator: http://www.bankrate.com/brm/auto-loan-calculator.asp?nav=autos&page=calc_home
If you have no credit, your best (and probably only hope) is to get your parents to cosign. If you don't, you will end up paying interest about 20%.
If the car is $9K and you have $5K in the bank typically what will happen is that you will take out a loan for $4K and the bank will give you a check to pay the balance. Then you get your car and 30 days later, you have your first payment due.
Most loans can be paid off early to save on interest. Just be sure there are no pre-payment penalties.
My advice to you is to talk to you bank and to your parents. Your parents probably have lots of experience, knowledge and advice for you.

Re: Can someone help a kid understand bank auto loans? (VeeDubDriver)

I'll second that, as a FORMER car salesman let me tell you, question everything. You're viewed as a juicy lamb walking into a lions den, then the next thing you know, WHACK!!! you get clubed like a baby seal. Please be careful when dealing with car salesman. Also when talking interest rates, your loan will get bought by a company for a certain rate, this is called the buy rate. The nice guy in the finance office will usually tack on a few extra points for good measure (I told you he was a nice guy!) typically it's 2 maybe 3 points he'll add. But if he senses that you're a push over, he'll club you, too. Maybe add 5 to 10 points if he think you'll bite.
Good luck, http://****************.com/smile/emthup.gif

Re: Can someone help a kid understand bank auto loans? (Qball)

Independent used car dealers usually stock cars that have made the rounds at auctions and the high mileage junk that the new car dealers don't want to stock. New car dealers have a rep. to maintain whereas independents don't care and will close up and change names and locations then reopen. Hopefully you'll find a car at a reputable dealership; a trade in or possibly a program car. For a $9k car w tax & lic. tour looking at $10k. With half (or more but maybe not less) down any body will finance you as long as you have a job and a phone. If you want to do this on your own, go to a bank first, apply, see if things are reasonable and if so, save your P's the worry. though you do sound responsible and with a cosigned loan with your P's you'll qualify for what they qualify for. You'll still build your own credit history either way. DON'T go through a finance co. PERIOD. Or a (reputable) dealership finance dept. without your dad or uncle or someone like that with you. Best of luck!