Your credit is fine. Although you would have better luck financing through an auto company while buying a brand new car (they can’t give them away fast enough) you should still have no problem qualifying for a loan with a credit report that has only one minor blemish. That $200 will not come back to haunt you in this situation, just explain what happened, if they ask, and point out that only Equifax has been dragging their feet removing the thing.
Where should I be shopping around for this? Are national banks preferrable to local ones? I currently use Wamu/Chase, and my local branches don’t do loans.
This is where it gets a bit tricky, since you are trying to buy from a private seller. Although you will save a ton of money buying this way, many banks won’t do business like this now days because they’re less likely to trust in the value of the car as collateral for the loan. You might have to jump through some hoops getting it inspected, sending them title (to prove it isn’t a junked vehicle, or a Katrina car or something similar), but if your seller isn’t spazzing out about the little extra time the extra couple hoops will cause then neither should you.
Your best bet might be to check out your local credit unions. These are much less likely to be affected by the economy the way Chase/Bank of America and such have been, and they are much more willing to give out money. Unfortunately you won’t know if they will fund a private car loan until you ask, and even if they do don’t be surprised if they want more than just the car for collateral. I’m not saying it will be a fantastic deal, but with your 700+ credit it damn well better be.
Also, there are private loans, but if you don’t know how to go about finding them it’s pretty difficult to explain in a forum post. One of the easiest ways is to go to a used car lot, ask them if they offer private loans and if they say yes ask for contact info, then go home and call them. These are generally loans from groups of small-time investors (not banks, not financial institutions) who will turn around and sell your loan for a small profit once everything is signed.
The biggest problem with these is that the loan can change hands a dozen times throughout the life of the loan. Another problem with these is that since they aren’t as strictly regulated as banks and such you might have to put up with some very akward methods of them trying to get thier money back if you miss a payment, and generally their terms are not nearly as nice as a genuine financial institution. I hope this doesn’t sound like I’m describing loan sharks, just small time investors that think it’s cool to call your work and family and bad-mouth you if your payment gets delayed in the mail for two days etc.
Am I better off just waiting until the end of the year when I have cash in hand? My current vehicle is on it’s last legs, and maintaining it is becoming cost-prohibitive.
I don’t know anything about your settlement, but there is a general rule when it comes to money owed in settlements, don’t believe it till you have deposited the check and it clears.
The deal may fall apart for any number of reasons before the settlement is final. And even if it has been finalized and both parties have signed, you still might end up having to sue them again to get them to pay the agreed amount or take them to collections etc. This might sound like I’m grasping as worst case scenarios, but it happens more than you think – especially since so many institutions and insurance companies are literally dying right now.
My suggestion is this, if you can’t buy the car with the money you have right now (including financing) don’t do it. Don’t put yourself in the position of oweing more money than you make because you’re waiting for a windfall that may or may not happen exactly how you expect. If you think you’ll be able to swing a monthly payment for the life of the loan, with or without the windfall settlement, go for it.
And do not, DO NOT, go to one of those places that will buy your sttlement or judgement from you before it has been finalized. Because guess what happens when the settlement falls apart after they have given you a check and you have given the check to the seller of the car? Bad things.
And finally, no honest institution will take your word about the settlement as a basis for providing the loan – so don’t bother trying to convince a lender that you’re going to have the money to pay it off ‘soon’, because the smart ones (the ones worth doing business with) will only believe in genuine verified income or monetary worth.
EDIT: Oh yea, one more thing – Since you plan to buy from a private seller, you better be paying attention to specifically what you think this vehicle is worth to you. I guarantee you, in fact I PROMISE you, that if you spend any amount of time dealing with private sellers you are going to find alot of people selling alot of cars they owe WAAAAAY too much money on. They will be selling the vehicle for much more than the thing is actually worth. They just might have done something crazy like trading in an old car to buy the one you are interested in, but they still owed $3000 on the old car so they just rolled it over into the loan for the one you want. Essentially they ended up financing that car you want to buy for $3000 more than it is worth, guess what happens when it’s time to sell that car and they still owe all this money? The price of the vehicle is adjusted to compensate.
Also if you are buying a newer vehicle some people will not want to sell you a car based on Kelly Blue Book private seller prices because they still owe dealership prices on that huge freaking loan they have outstanding on the thing. Do not be the fall guy for their bad decision.
I know a guy at work who bought some sort of Chevy truck. It was $19,000 or so new off the lot. But he was trading in a car he owed $9000 on. It was only worth half that because he had rolled a loan into it from the car before that. The dealership gave him squat for the trade-in and applied it towards the price of the truck and rolled the remaining balance into the truck loan. So, now he owed almost $30,000 on a $19k truck. Way to go bro. They saw him coming.
Well, he had that thing advertised for sale for six months before he couldn’t afford the payments anymore and gave the keys back. He still owes something like $10,000 on that truck because they could only sell it for what it was worth, and he doesn’t even own it any more! He would very happily have worked out a deal, ANY deal, with a buyer if they were simply interested in picking up the payments.
Please don’t fall for something like this. Buy it outright, get title. Do not over-pay for someone elses mistake. Don’t just take over payments, because it doesn’t matter who is writing the checks, it only matters who is on the title when the true owner of the vehicle gets sued or doesn’t forward the check you sent him.
