by "MasterMario - Keeper of the V8s" (mastermario)
Published 06/09/2017 at 16:59
by "MasterMario - Keeper of the V8s" (mastermario)
Published 06/09/2017 at 16:59
Tags: Trucks
STARS: 0
So I’ve been looking at trucks recently aiming to upgrade my daily/tow vehicle. I’ve been looking at some gas but mostly diesels and trying to stay under $20k, which means looking at either higher mileage or older trucks. I’ve been looking at dealers exclusively because I knew I’d need a loan, but what I had no idea about was that banks get really particular about loans for used vehicles that are older or have high miles even if from a dealer (and even if a diesel is just getting broken in at that mileage). My wife and I both liked a truck and started looking into purchasing it, well the only loan we could get was for a short term at high interest meaning payments per month were much more than we were comfortable with.
It makes sense since it is a higher risk loan. But then it doesn’t make sense at the same time to me. I mean, I could go buy a brand new truck off the lot with a higher payment per month and I’d be able to get a loan no problem. Oh well, guess we’ll wait a little longer, there’s always another truck.
Have a long and low square body for your time
"shop-teacher" (shop-teacher)
06/09/2017 at 17:12, STARS: 1
Mmmmm ... Squarebody
Sorry about the setback.
"Nothing" (nothingatalluseful)
06/09/2017 at 17:19, STARS: 1
I remember looking at used car rates on USAA a few weeks ago. Something like 2009 and older were 8.25%, I didn’t even look what the term was. So now, if people are financing (for example) a 2008 Tacoma, which is probably still close to $20k...yikes, that’s over $600 on a three year note!
"Chariotoflove" (chariotoflove)
06/09/2017 at 17:26, STARS: 1
My last three new cars were bought new with 0%. My first new car, I struggled to get 3%. Loans for used, especially older used, are a whole different ball game. Twice, I sat in the finance office at a dealer and told them, “Nope, not gonna pay that rate; let’s do better.” to get to where I was comfortable.
"ITA97, now with more Jag @ opposite-lock.com" (ita97)
06/09/2017 at 18:09, STARS: 1
While it the exact specifics vary from lender to lender, in general financing a used car with more than 100-150k maybe a no go, and terms of more than 60 months are also likely to be a no go. On stuff not more than a few model years old, they might go out further. Interest rates are also going to be higher, and the older the vehicle is, the higher the rate will be. I also know that many a bank can be hesitant to loan more than around 80% LTV on a used car. Community banks and credit unions tend to be more willing to consider older cars at better terms than big lenders.
As far a big lenders go, State Farm Bank has always been surprisingly willing to lend on older vehicles at not unreasonable interest rates. As long as it has less than 150K and you’re not looking for more than 80% LTV, they don’t seem to care all that much about age. The process is also handed through local agent’s offices, so it makes it pretty quick and easy. In the past, I’ve called up my agent and applied over the phone, gotten an their loan offer over the phone during that same initial call, and then gone in and signed the paperwork at my agent’s office that same afternoon and walked out with a bank draft payable to the seller.
As an FYI, there may not be a reason to limit your used car shopping to a dealer. I’ve financed used cars bought from a private party with no problem, and I’ve also been on the other side of that transaction selling a used car that they buyer financed. The transaction usually works along the lines of drawing up a simple contact (a few sentences hand written will suffice) and placing a deposit to hold the vehicle (for me, we always agreed on a few hundred dollars) for a specific amount of time (say 3-4 days) while financing is procured. You do the loan with your bank the same as any other, and they make the check payable to the seller (or their lien holder). There really isn’t a downside for the seller (worst case, they get a couple hundred bucks for hanging onto their car for a couple of extra days), and there is little at risk for you (worst case, you’re out a couple of hundred bucks).
"itranthelasttimeiparkedit" (itranthelasttimeiparkedit)
06/09/2017 at 18:46, STARS: 0
I just got a loan I never thought would happen. We have decent credit, highish income. 2007 tahoe with 160k miles. Got 2% for 3 years...
"MasterMario - Keeper of the V8s" (mastermario)
06/09/2017 at 21:07, STARS: 0
Hmm. I was under the impression it was next to impossible to get a loan for a private party sale. The truck we tried to get a loan for had over 200k but was a diesel. The mileage was an issue to most of the banks and credit unions we talked to and the one that did say yes came back with a 3 year 10% loan. I was planning on doing 5 years for our monthly budget and the 10% seemed a tad much.
"MasterMario - Keeper of the V8s" (mastermario)
06/09/2017 at 21:09, STARS: 1
No worries. I’m a patient man, I’ll find another truck when the time’s right
"MasterMario - Keeper of the V8s" (mastermario)
06/09/2017 at 21:21, STARS: 0
Yea, we were planning on 5 years for a $20k truck but they would only do 3 and at 10%!
"shop-teacher" (shop-teacher)
06/09/2017 at 21:44, STARS: 0
Yep, there’s always another one!
"ITA97, now with more Jag @ opposite-lock.com" (ita97)
06/10/2017 at 00:31, STARS: 0
200k was probably the stumbling block. If you can find something in your price range with under 15ok, it will probably be easier to finance. 10% seems a bit high. I’ve bought a couple of older cars where I took out a loan to purchase them and then paid it off in fairly short order after selling the car I already had. I recall interest rates being in the 6-8% range on older cars.
"MasterMario - Keeper of the V8s" (mastermario)
06/10/2017 at 08:54, STARS: 0
Yea the 200k was the issue with this vehicle. It’s hard to find a clean diesel truck under $20k and under 150k miles with the options we are looking for. But I’ll keep looking until I do find one. I just wasn’t aware that mileage or age could be such an issue.