New Car buying

[scrapgal123]

Due to my car being declared a total loss, I need to find my self a new car. I was also looking for a car for my daughter. Anyone know how difficult it will be to obtain 2 car loans or leases? Should I obtain 1 and wait a few months for a 2nd?

TIA

 

[thehowells]

there are far more factors taken into account than you have provided in questions
price of car, credit rating, down payment, length of term, co-signer. etc

will both cars be in your name or one in your daughters?

 

[BridgetBordeaux]

Ironically, it may be easier to get both loans at the same time.

If you get the first one and then wait a month or two...........that first one eats into your debt to income ratio and may cause you to be overextended in the eyes of the credit company.

If you pull the trigger on both on about the same day, you may be able to get both because the system is not really set up to deal with 2 loans simultaneously.

There are several variables that can work for and against you.............your credit score, your monthly income, your exisitng loans.

When you shop for cars and fill out a credit app, the dealer will run a credit check---and it is not unusual for a customer to have 3, 4, 5 inquiries while shopping. The FICO model is set up to basically ignore these as it knows it is traditional for multiple reports to be pulled.

Here is my biggest warning..............make sure your loan(s) have all the work finalized before you pull the car off the lot. Do not take the car home if they offer to let you have it as a courtesy because they "are confident that the deal will go through". This is an area where dealers and customers have had problems in the past. If you have a trade in this is even more important as your trade may be wholesaled the next day and a few days later the loan for your new car comes back declined..............Oops!

I have not been involved directly in this side of the business for many years, so I hope someone from the credit industry chimes in. The industry may be a little quicker than it was a few years ago.

 

[QVCshopper]

I know at least two families who have purchased two cars at the same time twice... if that makes sense. So, I think it's done quite often and can possibly save you a little since you're buying two cars at once. Don't know much about the loans; but maybe look into what companies are offering. I know Honda is doing .9 and 1.9% financing right now on certain vehicles (just bought an Odyssey!). I did pretty well negotiating online with a few different dealers.

 

[bdcp]

It's really a function of your income and credit scores. We've had two new car loans and co-signed for our son all within about 1 year. Son's car and mine are both paid off (early) and we have one loan left to finish paying off. Because our scores and income are so good, it wasn't an issue at all.

As for "pulling the trigger at the same time", the credit reports will show all inquiries and the reality is, if you don't have the credit scores and income to support both loans, you won't get them or you could end up with much higher interest rates than you think you're getting. I would say trying to "trick" the system is completely unethical especially if you know you wouldn't qualify for both loans otherwise. If you do qualify, then it doesn't matter if you get two loans close together.

 

[BridgetBordeaux]

When sharing my thoughts, I did make a few assumptions. One of them is that the borrower could actually afford the 2 notes. Sometimes, however, a credit company may feel otherwise and not even offer the second loan at a higher rate....even with a larger downpayment. Clearly it is not good for any of us to have an overextended customer, but credit has been a bit tight lately and people that can actually afford some loans are being turned down.

I was thinking more along the lines of a situation that occurs when buying a house and a new car. The guidance has always been to get the house first and then get the car..........as getting the car first eats up part of your ratios and then you either can't afford the house (according to the mortgage company), or you have to get a smaller loan- and therefore less house). When if they had just done it with "proper" timing, the customer gets the house and the car.

Maybe the compromise is to get the more expensive car first and then duke it out over the terms for the less expensive one.

OP-I suggest you go ahead and get your free credit report and I suggest you pay the 20 dollar fee for your FICO score. This will help you know where you might stand if the situation is a close call. It can also be used to negotiate a lower rate in case the lender is trying to "puff it up" in order maximize their profit. Good luck and I am sorry you lost your car. I also hope that nobody was seriously hurt.

 

[BridgetBordeaux]

I talked to a relative today that works for a national automotive finance company. They confirmed that if you want to avoid prolonged discussions and extra scrutiny, buy both cars within no more than a few weeks from each other and use different credit sources. For example: get a first car from a Honda dealer using their finance scompany, and buy the second car from a Ford dealer and use their finance company. The credit report might take as long as 30-45 days to reflect car number one as an active loan.

Getting 2 cars near the same time through the same finance company will cause the finance companyto more closely scrutinize the deals and they may demand a larger down payment.

I am not encouraging you to get in over your head, but if you have to get 2 cars soon, knowing the rules of engagment may help you navigate through the 2 processes more smoothly.

Now.......as Clark Howard suggests---buy, do not lease the cars. Then, you need to keep them in good shape and drive them for many years. Leasing is the most expensive way to go.

Good luck!