How Did you bought you're Koup? Financing or Cash?

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anthony_evo08

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Hi guys! I am new here and i just want to ask you guys a couple of questions. I am 22 years old and im from Toronto Ontario. I just want to ask how did you guys bought you're koup. By cash or financing? I am planning to finance it. I will buy my forte koup SX next year. around Winter 2010.

first step im gonna do:

1).I applied for a credit card today and will probably get it next week ($500 Credit limit only). I did this because the sales lady from Kia scarboro said to me that it would be a more great chance for me to be approved from the bank if i have a credit. (Of course i must have a good credit rating to be approved).

2). The Sales lady from Kia also said that i should have a G2 licence so i could be insured as a driver for my car. Which is i will be going to a driving school this January 2010 to start and have a cheaper insurance.

3). As of now i am only working part time (but 8 hours a day) for 3months. Which i am planning to save money and put a good downpayment on it. like 15k and finance it for 3years.

The MAIN POINT i did this thread is to ask you guys how have you been qualified for financing? Even though i still have no full time job by next year can i still be qualified and As long as i have a good credit rating i could be approved by the bank? and How big does your'e bank's interest rate is? i saw the site from Kia.Ca their banks have 2.90% interest rate (3years) which is a good deal. I am planning to apply for a car loan at Canada trust. any idea how much interest will they charge you?

any Suggestions or tips would help me guys! I will read you're posts to this thread. thanks!
 
Hey Anthony,

I really think that you ought to speak to your bank first. When you finance a car, the financing still goes through a bank. Dealerships have agreements with certain banks (that is where you get the 1.9% or the 2.9% interest rates) Once you establish a credit, you are on your way.
Remember that you may not get financing if you dont have a job - ie: monthly payments...banks want to know that you have an income. Or you have to get a co-signer.

Anyways......goodluck.

The Koup Sx is a really cool ride.
 
blkkoup said:
Hey Anthony,

I really think that you ought to speak to your bank first. When you finance a car, the financing still goes through a bank. Dealerships have agreements with certain banks (that is where you get the 1.9% or the 2.9% interest rates) Once you establish a credit, you are on your way.
Remember that you may not get financing if you dont have a job - ie: monthly payments...banks want to know that you have an income. Or you have to get a co-signer.

Anyways......goodluck.

The Koup Sx is a really cool ride.
Click to expand...


Thanks blkoup!

Yeah! I have a job now but im only part time. (for now, but i am working 8 hours mon-fri). Hopefully by 2010 i am already full time. Yah! i am starting to build my credit now, my visa card will arrive next week. any ideas on how much the insurance of the koup will be even though i attended a MTO driving school?
 
Most banks dont give a good rate, they lend house and mortgages, not cars. My credit rating is 650 and I still couldnt get a rate of 9.99 from a credit union. I had to get 12.99% from Wachovia.

KIA has a rate of 3.9% only IF you qualify...and if you're a college grad or you will graduate in 6 months or less, $400 credit. But you need about 740 credit score to qualify.

I put down $15k and financed $5400 (20400 including tax, title, license, etc.). Below sticker but way above invoice. I didnt care, I needed a car THAT DAY, was $4400 to fix mine.

Payments are $123 a month, starting in January.

My credit is low because I didnt HAVE a credit score 6 years ago, I paid cash for everything. Credit is just dumb, it gets everyone in trouble.

Also, most car loans are NOT like house loans: if you pay them off early, you're STILL paying the interest. Some states charge you a penalty, which in my eyes is criminal.

My insurance at age 39 is $362 for 6 months from Geico (they were the cheapest at the moment). I assume someone half my age will pay twice as much, minimum. (Comments based on USA knowledge only)

EDIT: Dave Ramsey IS GOD (but he'd kick my ass for buying a new car). I think I can afford it, I make $30 an hour and have no other debt.
 
Rekoup said:
Most banks dont give a good rate, they lend house and mortgages, not cars. My credit rating is 650 and I still couldnt get a rate of 9.99 from a credit union. I had to get 12.99% from Wachovia.

KIA has a rate of 3.9% only IF you qualify...and if you're a college grad or you will graduate in 6 months or less, $400 credit. But you need about 740 credit score to qualify.

I put down $15k and financed $5400 (20400 including tax, title, license, etc.). Below sticker but way above invoice. I didnt care, I needed a car THAT DAY, was $4400 to fix mine.

Payments are $123 a month, starting in January.

My credit is low because I didnt HAVE a credit score 6 years ago, I paid cash for everything. Credit is just dumb, it gets everyone in trouble.

Also, most car loans are NOT like house loans: if you pay them off early, you're STILL paying the interest. Some states charge you a penalty, which in my eyes is criminal.

My insurance at age 39 is $362 for 6 months from Geico (they were the cheapest at the moment). I assume someone half my age will pay twice as much, minimum. (Comments based on USA knowledge only)

EDIT: Dave Ramsey IS GOD (but he'd kick my ass for buying a new car). I think I can afford it, I make $30 an hour and have no other debt.
Click to expand...

How do you get a high credit score? by just paying you're credit statements at time? I applied only for a minimum credit card. Maximum $500.for me able to get a high credit score like 740 is that i should just pay my credit statements at time? is that what you mean?

I am not a college grad. I am now working. why is you're payments 123$ a month? that is bloody cheap. i calculated my monthly payment with 15K down and 2.90% rate is 361 monthly including tax and destination fee.

you're insurance is cheap too!
 
anthony_evo08 said:
How do you get a high credit score? by just paying you're credit statements at time? I applied only for a minimum credit card. Maximum $500.for me able to get a high credit score like 740 is that i should just pay my credit statements at time? is that what you mean?

I am not a college grad. I am now working. why is you're payments 123$ a month? that is bloody cheap. i calculated my monthly payment with 15K down and 2.90% rate is 361 monthly including tax and destination fee.

you're insurance is cheap too!
Click to expand...

How many months did you put in? I think something is wrong with your math. You have to buy stuff with credit, make your payments on time and not have your balance maxed out to help your credit score. Interest rates suck right now. My credit score is around 760 and my wifes is around 840. Best rate I could get was 5.9!
 
Kenny C said:
How many months did you put in? I think something is wrong with your math. You have to buy stuff with credit, make your payments on time and not have your balance maxed out to help your credit score. Interest rates suck right now. My credit score is around 760 and my wifes is around 840. Best rate I could get was 5.9!
Click to expand...


Kenny this is based from the kia Website. for 36 months with a 2.90% interest rate from their bank dealers. I haven't bought a koup yet.

So you mean (Example) i have a $500 dollar credit limit and use only like around 350-400 monthly then pay it all of when the bill comes to get a good/high credit score?

Am i getting myself right here? Sorry for asking these kind of questions because i am only new into this credit stuff.

Tips and Hints will be very helpful for me guys!

Kia Canada website. I am From Toronto
 
anthony_evo08 said:
Thanks blkoup!

Yeah! I have a job now but im only part time. (for now, but i am working 8 hours mon-fri). Hopefully by 2010 i am already full time. Yah! i am starting to build my credit now, my visa card will arrive next week. any ideas on how much the insurance of the koup will be even though i attended a MTO driving school?
Click to expand...

Your a student right? Your credit will be important and if you qualify for 2-3% I honestly will be surprised. if the new CC you're getting is your first. Your credit score is not the only thing, only one part of a formula and honestly not the most important. Credit HISTORY is the key, you will have what is called limited credit with no prior loans. Your best bet is going to be keeping an eye out for a "first time buyer" program. Also, something to consider is your debt to income ratio. This is one of the factors that is less known to the general public, but shouldn't be surprising. It's your real life ability to pay your debts. They will consider ANY outstanding loans you have, including any student loans, BUT you can also include your student loan installments you are receiving/have received. All of this info is relevant to the US mainly, but shouldn't be much if any different in CA, just the laws governing credit will be different.

To give you my personal example, my FICO is in the mid to hi 600s and my debt to income ratio is exaclty 0%, I have no debt whatsoever, with an income that is adequate. I do have credit cards and use them but do not keep balances and after 5K down I got 10.49%, because I also have limited credit, just 2 fully paid off loans, another car and an unsecured cash loan.

If you pay off the entire balance of your credit card every single month you will basically accrue no credit. They(banks) generally do not bother to report $0 balances to the credit agencies, it's a waste of time. The amounts you charge isn't very important, regular use, then you get a bill, then pay it on time, but not completely off. let the balance cycle, a small amount so as not too accrue much interest, and the bank will report this activity to the various agencies. another VERY good idea is to take out small, $500-$1000, secured, like with cash, loans for maybe a six month term, then pay them off on the 2nd month. This will build loan history in your credit report to go with that CC.

@Rekoup, where the hell are you? If you pay your loan early you should not be charged for any interest that has yet to be accrued. You have the right to see an amoritization schedule for your loan. If you can picture it, an amoritized loan is when in which at the first of the loan you are paying mostly interest and less principal, there are 2 curves that are exact opposites, and at the end of the loan you are paying mostly principal and little interest. If you pay over your scheduled payment and have specified to the bank(get this in writing) that you want this to be applied to the principal, then they have no choice but to let you pay it early. If I had to guess you live in one of the more FUBAR states, maybe cali, florida, ohio, jersey, or wisconsin. each of these states has some bizarre lending laws that supersede federal laws, but do not contradict the FCRA(fair credit reporting act) and the TiLA(truth in lending act). If the bank you financed through has a federal license, which it must for FDIC, then it has to follow these. Credit unions get tricky though, they do have some unique rules of their own.

anyways, that's my three or four cents worth...

edit: I thought you were a student for some reason, never mind that first bit then.
 
Students almost ALWAYS get a credit card because:
1. The bank trusts you will have a better job than average
2. You are more organized, or learn organization in college
3. If you miss a payment, they call you up, scare you into getting you thrown out of college (a lie, but has been documented tens of thousands of times, I saw the congressional hearings on this on C-SPAN network) and you panic and call your parents for the money.

I never got any credit until I took one class at school, then POW I got 6 credit cards (This was 1988)

It generally takes about 8 to 18 month of 4 credit sources (cellphone, cable bill, utility, credit card...a car payment is worth two of these) to establish a credit score of 650-700 if you had no previous credit. Some lenders wont lend you anything even with a perfect credit history if it is under two years of records. Even if you make one late payment, that wont hurt too much and after a few months will mean almost nothing. Check your credit report, as many people (like me) often have medical bills or balances that are duplicate - bills you have paid after insurance pays most, but are billed again by mistake. I just had 40 items taken off my report by Experian.

https://www.quizzle.com/ is a FREE site that does a "soft" credit check on you (wont count against you like a credit inquiry) and you can dispute things right from their site by a click of the mouse (Disputing 50+ items took me 5 minutes, and 40 of them were invalid!). There are others but this one i think is the easiest, and it is owned by Quicken, so I trust them.

If you have a high debt to credit ratio, many credit companies will say you are a "high risk" even if you have never missed a payment...and they can and will raise your APR% to whatever they are allowed (Friend of mine called in to the Clark Howard show with this issue, a 5% card was raised to 29.98% even though his credit score was 700+ and never missed a payment).

My car purchase was for $20400 including tax, title, license, and a 5-year loan for $5400 (I put down $15000) at $122.44 or something (I forget, I'm at work right now) from Wachovia Dealer Services.

If I went with the paint care package (Xzymol or whatever its called) and the warranty with oil changes (Why would I want a warranty anyways? Isnt KIA's good enough?) my payments would have been $389 a month! The dealership REALLY makes a lot of money on this, and refused to stop pushing it on me until I said I wanted my money back for the car.

@Viz: They outlawed the "pre-payment penalty" in Wisconsin; they just have a different name for it. It works very much NOT like a home loan. I dont have time to find the exact statute in Wisconsin (im on lunch break at the moment) , but it may be here: http://nxt.legis.state.wi.us/nxt/gateway.dll?f=templates&fn=default.htm&d=stats&jd=ch.%20218
or here http://www.legis.state.wi.us/statutes/stat0425.pdf

anthony_evo08 said:
So you mean (Example) i have a $500 dollar credit limit and use only like around 350-400 monthly then pay it all of when the bill comes to get a good/high credit score?
Click to expand...

I'd rather say for you to use under $100 of the $500 limit and pay it off in full every month.

If you're getting close to your limit, that is very bad.

But, banks call people that pay off their debts every month "dead beats" haha!
 
@Viz: They outlawed the "pre-payment penalty" in Wisconsin; they just have a different name for it. It works very much NOT like a home loan. I dont have time to find the exact statute in Wisconsin (im on lunch break at the moment) , but it may be here: http://nxt.legis.state.wi.us/nxt/gateway...=ch.%20218
or here http://www.legis.state.wi.us/statutes/stat0425.pdf - rekoup


I assumed you were in one of those states, I'm sure there are a few others i don't remember or have created new laws since i got out of banking. luckily, i'm in texas and our consumer protection laws are some of the strongest. I do remember setting up auto loans or boat or rv or the like in some of those states and having to read those disclosures, the exact same stuff that most fail to read in the first place. like the quizzle site, i'll have to check it out, thanks.
 
@vizunary

Thanks for you're reply and i really appreciate the advices i am getting here. I am not a student anymore. I am working 8 hours a day from an agency. (which means i am part time). This is my first time i applied for a credit card. I searched for good tips on how to build a high credit score. The most important factors i saw is pay the whole amount i used in the balance in my credit card and don't exceed by 35% of my maximum credit limit (like for me my maximum limit is $500 then i should only use like around 150 monthly). and last but not the least, use my credit card about 2-3 times a month. And another question. Does the dealerships ask proof of income? like copy of you're pay stubs and cheques? or you're yearly job contract? because my Dad bought a bnew van (09 Dodge caravan) this year and they didn't asked from him any proof of income. The bank approved him fast because he pays his bills on time (even though he owes a lot on his credit card) and he has a good credit rating. (which i think is around 600) his interest rate was only 6%.

Hmmmm.. Fishy ey? I don't know about this but i have a good feeling even though i still have no stable job yet until next year as long as i have a source of income and a good credit score then it looks like i would be approved easily.

@Blkoup

what do you mean by dead beats? AYAYAYAYYAYAYA

oh! and i forgot. I am gonna put a good downpayment too. 15k
total price here for the kia koup SX included taxes and delivery and destinations (5-speed automatic) is $27500 (CANADIAN DOLLARS) I am from toronto. WHICH IS A RIP OFF!
 
I can't give you much advice on credit (a lot of it I think is crap) but I do think a very large factor in getting a good interest rate is a long history of paying debts on time. I needed a car as soon as possible so I didn't even get to check my credit before I bought my Koup, nor would have it mattered. I don't know what my score is but I do know I never miss a payment on any of my debts. Even my debt to income ratio is kind of high and I was given a 6% interest rate through a credit union.

As far as proof of income you can probably bet they will ask for that. The last three times I've bought a car they've asked for a previous pay stub. I can tell you never pay the MSRP or the ticket price on the car! Negotiate with them as much as you can to bring that price down. Show them that you're willing to walk away if it's not a good enough deal, they'll either chase after you and come down on the price or you might just have to walk away and take your business somewhere else.
 
I work as a manager at a financial institution here in Canada. I can provide some insight on how to build some credit for you college folk.
First, try to pull your credit report from equifax or transunion. If you have a score great! If not, then you are hooped. If you have no credit score, the best way to start to build credit is applying for a credit card. If you have no score, and your in college, you should be able to get some premuim cards with good rates because they all love college kids(they get themselves into debt!). If you do not have a score, you will not get approved from any sort of loan without a cosigner. If you have a low score, then there are some things you can do to improve it.
Generally lenders look at some general areas. Most look for these basic criterias; Credit score(Generally above 620+ unless you go with a financial institution in relation to a bank, then 550+), credit history(most look for 3 years history with 3 open tradelines(tradlines..loans, credit cards, lines of credit, retail cards)), tdsr(total debt service ration- amount you make compared to the amount you payout per month), workplace and residence history(longer you've worked/lived, better stability is shown). Most banks run depending on scores below 40% tdsr, and most financial institutions under 50-55%tdsr. Changing your credit score takes time. Seeing how it is not published anywhere that I can find, I can only suggest from experience some things that may improve your score. 1) Obviously keep your TDSR in line. 2) Credit cards/LOC/Retails cards, keep under 75% of maximum limit as when above looks bad. 3) Keep your payments on time, If 30days+ late it reflects on credit bureau.

4) Keep your inquiries(credit applications) to a minimum as they decrease score. Ive seen some people credit score drop by 100points from 2 inquiries, and I've seen others drop by 1 point. For example, when you go to a car dealership, and they try to get you financing, they submit your information to multiple institutions. Sometimes from a single visit to a dealership they can pull 5-10 bureaus, thus plummiting your score instantly. 5) The last thing I can say it make sure you have open tradelines, as if you have none, even though you've established credit in the past it will affect your score(how long, and how bad I don't know). Also it affects your score if you have too much available credit; for example if you have 2 LOC, and 3 credit cards with a total available funds at 35000$ banks will not lend you money because your tdsr will be in line at time of application, but if you rack all those up, you will not be able to afford to pay them all back. All of this is just what I've gained from experience, in no way is this 100% accurate or published. Hope I've given some help.

Oh, and I purchased my vehicle on a 60mo finance, 1.9%. My score is 764. I had to provide proof of income, and there were 3 inquiries on my credit bureau from KIA submitting it.
 
@subttlesyle

thank you for you're advice. Yeah you are right i am also probably sure they will ask me for a previous pay stub. The don't need to worry because i am working. But what i am worried is what if i still don't have a full time job by next year? I mean just like now. I am temporary (but working 8hours a day M-F). Hopefully they would approve me because at least i am working?! Yeah! you are also right! i will never pay for the MSRP. i will have to do some nice sweet talking with them so they could bite with my offer.

@rez

Thanks also for you're advice. I am not a college student, And yep! I have no credit so that's why i applied already for a TD VISA card. the GM credit card. I only got a $500 dollar credit limit. Hopefully next week it will arrive. Hmmmm, that's gonna be another factor for me to be approved in the financing agreement. because by next year i am planning to get my koup and my credit history is not even at 12 months yet! LMAO!! But i hope they will approve me even though my credit history is only like 10 months old as long as i have a good score and rating.
 
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