buying a car w/ no income

[adrenal_medulla]

Well, my wife just totaled our car (everybodys OK), but when we bought the car I had a job, so getting a loan wasn't a problem. Now we need to buy a car with no income. My wife's parents have agreed to co-sign if needed but our credit union has already told us that with no income we'd need someone to go into a joint ownership with us on a vehicle. We're definately not comfortable doing something like that.
Does anyone know of any med student friendly ways to finance a car? We don't have a trade-in, but we can put about $2k down. I don't want to wreck my credit by going from one institution to the next asking for a loan if they all have the same policy about the no income deal. My wife's a stay at home mom, so she doesn't have an income either. Any suggestions?

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[beriberi]

One thing you should know: if you inquire multiple times for the same type of credit (over a period of two weeks) this counts as only one inquiry. The credit reporting bureaus want you to be able to shop around. This is true for home loans and I believe all other types of credit--except credit card applications.

Also, car dealerships are much more generous with credit (their job is to get cars off of the lot). Many people who sell their cars privatly are willing to finance, especially given a reasonable down payment. They hold title until you finish making payments.

Good luck.

 

[Andrew_Doan]

Redirecting to the financial aid forum. Good luck with the car! 😉

 

[k's mom]

I can't believe I am going to suggest this, but as long as you are diligent about making payments, use a credit card. (I abhor credit cards, and we are working very, very hard to get our large balance paid off in the next 6 months, but they are sometimes a necessary evil) I'm not talking about putting a $30,000 car on seven or eight pieces of plastic, but you can get a reasonable used van or sedan for around $7,000.00. As a medical student (especially if you have joined any of the student/medical groups, such as AMSA or AMA, you may have credit card offers up the wazoo) We had a similar situation last year( only one car, $3,500.00 left on the loan, the engine blew) I had to put the remaining $3,500.00 in payments on our credit cards so that we could get the title and something out of a trade-in. I only realized then that my promotional rate on the credit card was 3% LOWER than the rate on my auto loan (We took out the original loan in 2000 when 7.0% was actually a GOOD rate )

Doing it this way, you will not need a cosignor, a credit check, or need to go through a dealer/bank for financing. You may also be motivated to pay off the car more quickly. having the title in hand is also very nice when/if you are able to trade up in the future.

I have also learned to always have at least two credit cards at all times with a fairly high credit line so that you can do balance transfers for 0%, no fee, every six months or so. I also call every five months or so and ask for a lower rate. I have ALWAYS been given one. Discover card and MBNA's Mastercard through AMSA have been especially good to me.

I'm not sure what year you are, but from the experience of my MS4 friends who matched in March, everyone offered them money the next day. Just buy something safe that will get you to match day, and as soon as you have your contract in hand, you can march onto a car lot and take your pick.

Good Luck!!!!!!!!!

 

[mpp]

Putting a car onto a credit card is a very dangerous idea unless you have some other way to pay it off in an emergency. Rates can zoom up without notice and your payment can double over night. See if your school offers institutional loans at a fixed rate (our school offers $10,000 at 5% each school year) which is a nice way to get some emergency cash. Otherwise, the joint ownership thing sounds pretty reasonable if someone is willing to do it for you.

 

[lealf-ye]

buying a used car will save you lots of money. 5k will buy you another 3-4 year of driving time.

 

[k's mom]

"Putting a car onto a credit card is a very dangerous idea unless you have some other way to pay it off in an emergency. Rates can zoom up without notice and your payment can double over night"

Sorry, but the reputable credit companies are out for your long-term business, not a quick buck, especially if you have established credit with major financial institutions (although Bank of America policies and customer service generally sucks). Unless you have a horrible credit record, or do something really stupid like open a credit card account with XYZ-Down-on-the-corner-VISA-in-a-hurry-Company, or are late on a payment, this simply will not happen, especially to doctors in training. Look at my original post...every time I have threatened to close down a credit account, the companies have bent over backwards to keep us as customers. Even when I get consolidation offers with a 3% transfer fee I have been able to talk them out of the transfer fee altogether. (Our first eight months of medical school we had @10,000 in credit card debt and paid a total of $22.00 in interest..for the ENTIRE EIGHT MONTHS)
Essentially, with no income you WILL GET SCREWED by a used auto dealer.
And, sorry, but even in a worst case scenario, your interest rate may double overnight (or triple), but your "payment" will not. If these people have no other income but financial aid, I can see a reasonably priced used car being paid off by next January (2+ financial aid checks away), not the 60+ ridiculous months a car dealer will try to sucker them into.

With that said, your school may have private loan/consumer loan options, often specifically for entering 3rd year students who need to purchase cars.
May be a good option if you don't already have a large, established credit line.

Good Luck!