Is an APR of 21% high to buy a car if I don't have enough credit?

Question

The car I qualified for is 11k, and I'm going to put down 3k. My monthly payments are going to be about $350 a month for 3 years! I called him and he said that the APR is going to be 21% because its a program that they have to help customers rebuild their credit! And he was like everywhere you go is going to be the same. Is this true? The car is a 2008 G6 Pontiac(4 doors) and it has 77,000 miles. I don't have enough credit and the only person who could co-sign for me has a bad credit! So is this a fair price?! I've applied for credit at 2 other places and I was denied! Should I go head and do it or should I wait to have more money for a down payment? Thank you!!

Genuine Guidance · Accepted Answer

OH man!
You would do better to either take that 3k you were going to put down and find a decent used car that will get you from point A to point B, or keep saving until you can get a better car for cash.

You are about to be ripped off big time! First off, this is a 3 year old car with 77k on it? Who the heck was driving it! It should only have at most 36k on the engine! I can sense repairs around the corner on this car! Did you have a mechanic look at it and tell you what it might need fixed and whether it was a good buy? Probably not.

21% is horrible interest for a used car.  Is it horrible interest for someone who has a crappy credit rating? No, because, it is true, if your score is horrendous, you are going to be paying double digit interest on cars that have high mileage.

If I were you, I would keep saving until I had 5k. You can get a good transportation car for 5k.

This almost sounds like a buy here/pay here lot. Don't feel rushed or pushed into a purchase that you may very well regret. Remember, you have to carry full ride insurance on top of that $350 payment every month! These types of loans are designed to benefit the dealer, not the buyer. If you miss a payment, this car and your 3k will be gone!

I would pass.

motes · Answer

21% is freeway theft. If you fairly do not want the vehicle at the moment, do not purchase it. If you are hired a minimum of 12/18 months and over 21, get a secured bank card from a financial institution. Make certain they belong to the credit score bureau and use it for small models and pay the stability the next month. After 24 months of recreation, your will have to be among 660/749 that is a well rating.

Anonymous · Answer

21% is highway robbery. If you really don't need the car at this time, don't buy it. If you're employed at least 12/18 months and over 21, get a secured credit card from a bank. Make sure they belong to the credit bureau and use it for small items and pay the balance the following month. After 24 months of activity, your should be between 660/749 which is a good score.

bdancer222 · Answer

21% is a very high interest rate for a car loan.  If your credit is poor, you are considered a poor risk and that means high interest.  At least you are only financing for 3 years instead of dragging it out for 5+.

Make sure the car is in good condition before you sign the contract.  Take it to a mechanic or at least have someone who knows cars check it out.  Nothing worse than a high interest loan on a vehicle that dies on you.

It might be a better idea to wait and save more if you can hold off.  Maybe buy some cheap transportation  for cash in the mean  time.

amicus_dumtaxat · Answer

They probably get a commission for selling financing.   You should shop around and check sites like bankrate.com for average APR on things like mortgages or car loans so you know you're not getting the run around by salesmen.  There are decent rates on collateralized loans for people with bad credit or no credit.  It's a highly competitive field and you can find someone willing to lowball a rate if you do enough shopping. good luck

elston · Answer

21-Apr

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Is an APR of 21% high to buy a car if I don't have enough credit?

6 Answers