Looking to buy a used car under 10k and would like advice on wether it’s a good idea to do so.

Income: 2800 a month - net Credit score: credit karma says 703/705 but I checked IdentitiyIQ with 1$ trial and it’s actually 623-632.

I need the car cause I work full time and need to get to and from work everyday buses in Ct are terrible so I spend around 450-700 every month on Uber/lyft. So if I’m spending that amount on rides financing seem like a good option but with interest rates how they are and my credit score idk if it’s worth it.

I checked online and I could expect an APR of 10-17%

What would be my rates with my credit score? Thank you.

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Bad_DNA t1_ja5iq1f wrote on February 27, 2023 at 12:10 AM

#2,039,758

Always assume you'll end up with the high end of those online credit guesstimates. So a $10k car with a 48 month loan at 17% will run an extra $3850 of interest. Assume the purchase price is going to be another $1000-$1500 of dealer 'add-ons' and misc fees, so you could buy an $9000 car for roughly $290/mo. That's before you actually use the vehicle (gas, maint, insurance).

https://www.creditkarma.com/calculators/credit-cards/debt-repayment

But with a less desireable credit score, you can more likely expect usury pricing of 20-25% interest. Splitting the difference at 22.5% interest, you will pay $5254 interest on a 48mo $10k loan.

Anything you can do to raise your FICO (pay all bills on time in full, avoid debt) and/or save toward the vehicle and pay cash (saving 1/3 of the total cost!) is advisable.

fanofthings- OP t1_ja5j4dx wrote on February 27, 2023 at 12:13 AM

#2,039,828

Replying to Bad_DNA (#2,039,758)

Wow 25% percent interest is crazy if that’s the case then you’re right buying a car outright would be better

93195 t1_ja5jgix wrote on February 27, 2023 at 12:16 AM

#2,039,877

Nobody other than a lender can tell you an exact rate. Download the Experian app, and check your FICO 8 credit score there. Unclear if anything you’ve already checked is meaningful or not. That one is.

Regardless, your approval chances (and rate if you are approved) aren’t only about credit score, it’s also about income, debt to income ratio, your length of credit history and the specifics of the loan (length, age of vehicle, etc).

Bottom line - Pre-apply with your bank or credit union and find out. No one here can say.

burner46 t1_ja5jjk8 wrote on February 27, 2023 at 12:17 AM

#2,039,901

The older the car, typically, the higher the rate.

I agree with the other commenter, save up and buy a cheap car outright.

dag2001 t1_ja5n4vk wrote on February 27, 2023 at 12:44 AM

#2,040,582

A lot of banks will not write loans for under $10K.

TurtlesBeSlow t1_ja5npdu wrote on February 27, 2023 at 12:48 AM

#2,040,684

Replying to dag2001 (#2,040,582)

Or over 10 years of age.

Bad_DNA t1_ja5w854 wrote on February 27, 2023 at 1:54 AM

#2,042,405

Replying to fanofthings- (#2,039,828)

Even 17% is crazy. Who wants to end up paying 40% more for a car because of debt slavery? Yet people look at 17% or 10% interest and say... no problem. The same people who made fun of math nerds in school, usually.

BTCbob t1_ja60vf9 wrote on February 27, 2023 at 2:31 AM

#2,043,446

You cannot afford a car. How about a scooter? Electric bicycle? Can you move closer to work? Or within a better bus route?

I’m sorry but if there is a way to get there by bus (even if it’s 2 hours each way) then take the bus. $500/2800 for Uber is not an acceptable expense. Do you have an emergency fund saved up?