Unless the actual subject of the post wants to make an account and engage, I think we’ve done all we can here.
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UPDATE:
Looking at brand new 2020 Kia Rios. $15k purchase price. $9k down.
Kia Financing - 11% APR
Capital One - 12% APR
Credit Union - still waiting
$15k purchase + $199 dealer fee + $1575 tax, title, tag = $16,774 - $9k down = $7,774 financed.
Total cost of car loan - $10,142
Total interest paid - $2,368
Monthly payments - 60 months @ $169 per
I think this is the best we can do all things considered. She has about $2k total in monthly expenses and takes home $3k per month (post tax). Full coverage insurance will cost an additional $55 per month and of course increased tags every year. BUT Brand new car, 10yr power-train warranty and builds her credit.
Shop around a couple more banks or CU
Refi once the credit has improved enough to get a lower rate.
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Any online banks you recommend?
Not off the top of my head… look thru the Credit Thread here to see if any lenders have been recommended
Not great but not bad. On the points in your last sentence, the only other brand to maybe consider is Mitsubishi since their base rates seem lower, their bumped rates might be too.
As @max_g said, see what credit unions she is eligible for and what the auto loan rates are. I would even check this before you sign on this Kia in case someone can beat it.
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Check out Loan Rates — Carolina Cooperative FCU. They seem to offer 9.99% for credit scores in the 600-639 range. If she ups her score to 640, her rate could drop to 5.99%.
It looks like the best way to join is by donating $20 to the North Carolina consumer council. No residency restrictions (I would recommend doing a Google search to confirm).
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What is her 3 bureau score at the moment? If it has not moved much, I would recommend waiting a few more months.
The good things about EV rebates is that the government does not check your credit score and your EV rebate down payment looks good to the lender, so … how about that Ioniq?
- Her only debt is defaulted student loans. No credit card debt.
Checked capitalone again for NEW Kia 8.92% is the best for 60 months. I think that is the best she can do right now.
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I don’t think she would qualify for a $32k MSRP car lease? Plus we are in MO so i’m sure the EV incentives are less? EDIT: No state incentive for EV in MO.
With 10k in savings, I would not recommend putting most of her money towards the down payment.
If she only puts $5k down, can she afford the payment at that interest rate?
That leaves her with $1k/month for gas, insurance, and emergency cash. Cutting it a little close, IMO.
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This has become a r/personalfinance discussion more than anything else. Really @endo1234 you shouldn’t be putting so much down payment. You need an emergency fund, esp in these times. Financing is fine, not a fan of it but you will survive. Put 2K down and finance the rest. When score improves, refinance
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I am no financial expert, but when it does not make financial sense, I tell it like it is.
Tell your girlfriend she needs to save some of her $10k savings. Here is my suggestion: Recommend that she put down only $5k towards the down payment, and offer to make her first two payments (Only say that if you can).
Does she like the Rio? Does she plan to keep it for at least 5 years?
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She actually has $17k in savings, just wanted to allocate $10k~ towards a car. Test drove the Rio today, she does not like it lol. Now she likes this 2015 Kia Optima for $12k. I’m thinking $6k down and finance $6k @ 10% for 60, pay it off around year 2, then get a better car.
KIA dealership was super pushy. Literally just said hi and they flop the credit app on the table.
Is that the advertised price or the negotiated price? How many miles? Are the remaining years on the warranty being transferred to the new owner?
Good for her. I still recommend saving her cash. What will the interest be for say a 36 or 48 month loan?
She and you will forever pay the price for this. Student loans do not discharge easily, even in bankruptcy. I think you have bigger worries than which car to get? Mortgages will be impacted down the road…
Back to car, I think a lease may be too much. Used, well maintained car from a private party may be the best bet.
If these are federal student loans she should look at rehabbing them.
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