How do I actually buy the car? I am 23 and have owned 4 cars, two of which were under $3000 and bought by my parents and the other two I purchased but my parents actually paid for it and I paid them back (interest free). I have gone through the bank on this one and was approved for the loan I need at a great rate through lendingtree.com. Here is where the problem comes in, the car I want is an S4 and is 3.5 hours away and I can only go there on weekends b/c of work. I would just go to the bank and talk to them about it but I work with the stock market and can't get off until 5:15 or later due to pricing funds etc... So assuming I go there on a Saturday, or Friday after work, the bank will not be open and I am not 100% sure I will actually buy the car, I need to drive it first and have it checked out by a mechanic. Will they give me the money even if I don't know if I am positively going to buy the car? If someone could explain to me how this whole process works I would appreciate it.

Also, If anyone knows of a shop that is open saturday's near Medina, OH (30 mins. south southwest of Cleveland) let me know.

Matt

 

well my first question is why didnt you just ask your parents..or more imporantly the bank how they do it as some may be different.. But have the bank cut you a check for the car.. thats your loan.. youre set. (or else just deposit funds into your account) youre loan doenst actually begin untill you access those funds or the check goes through. So have the funds ready..if you back out you back out and the check doesnt go through, no harm no foul.

just go to a dealer..they may be open..or by special appt at least.

 

^^^^

It's not quite that simple. What is described above is an unsecured loan. If you can get an unsecured loan for the amount you need, great. You can do what ever the hell you want with it, however, these rates are typically high (9%-15%) due to the high risk to the bank (they have no collateral). Also, the day you sign the loan documents is the day the interest starts accruing, you can't just bring back the check. You can pay down the loan if you don't use the funds but you will end up paying some interest. Your best bet is a car loan. The rates are lower (6%-10% for used cars) and the underwriting guidelines are more relaxed due to the fact that the bank will take your car if you don't pay[:@]. They will not just give you a check without the proper documentation either. They will approve you for an amount and then you go car shopping with that amount in mind. When you find the car you want, bring back all the info to the bank. The bank needs this info so they can do their due diligence such as making sure thier lien will make it on title, making sure the car isn't of higher value than the loan amount, etc. Then you sign the documents, they will give you a check either in the name of the dealership or in BOTH the buyer's and seller's name. Then you pay the loan off over time, the bank releases the lien and you live happily ever after with your title!

Things to think about when buying from private owner:

- Draw up a bill of sale
- Calculate state sales tax and county taxes that you will have to pay
- Make sure you can afford full insurance coverage (the bank requires it)

Also, things to avoid while car shopping when you will be utilizing a loan:

- Cars titled as salvaged, rebuilt, flood or lemon law - The collateral is no good in the banks eyes
- Cars that have really high mileage, usually 100,000+

I appologize for the length and also to the readers who already know this info. Any other questions PM me.

 

well quite honestly its what i did.. yes i have a car loan, and i pay interest at 4.75% Each bank is different and obviously some more leinent on others... I bought my car in florida...(i live in iowa) so i got a check before hand.. flew down, bought the car and went back. but youre right, you do need things like the vin so they can run their checks on it..etc. i suggest using a credit union..they will generally be more leinent and have better rates. I cant imagine that lending tree honestly got you a very good rate.


quick question though.... why would the bank care if the car was of more value than the loan amount?? you dont have to take out a loan for 100% of the car.

 

I just bought my 02S4 in the following manner, which was incredibly easy: (I'm 22)
I got a loan from capital one (I also have a credit card with them). They offer a "blank check" used auto loan. I applied for a used car loan (either dealer or private) and they approved me for a $22K loan @ 9.1% (not horrible for a 22 year old with minimal credit). In the mail the next day, I received a blank check that I had to make out to the dealer that I purcahsed my car from. I could write the loan out for any amount up to $22K. So, I purchased the car ($17K) and wrote them out the check. I signed my own name, put the vin number on the check (as capital one instructs to do), and wrote the dealership the check. The dealership then called capital one to verifty the amount and my loan started the next day at $17K. I got approved in 15minutes. And even if you dont know what car you want, the check is good for 30 days, and you can file an extension up to 60 more days if you want to. It's a great way to get a loan without being certain as to how much you want to spend and what exact car you are going to buy. Good Luck!
--Adam

ps - please note that you will get raped with a finance charge using this method from capital one.

 

Oh I see. I thought you meant they would just give you a check that you could do to whatever you want with it. I actually did a loan for my buddy that way. He flew to Texas for a Jag and drove it back to Illinois.

Other way around, my bad. They just want to make sure they are not under cottateralized if the deal goes bad. Although on newer cars most places will let you get a loan for over 100% of the loan amount. Usually 110% or so.

Agreed. CU's typically beat out banks on loan rates... I see it everyday!

 

The bottom line is talk to your lender. They will tell you exactly what to do.

Plus, a huge second to using a Credit Union. I got about a 1.5% lower interest rate going that route--and they are generally more friendly to boot.

 

agreed..talk to your bank..many do it their own way and will tell you how they want to do it... My suggestion is find a local credit union and become a member there.. heck.. i live in iowa currently and got mine through a credit union in mn to get the lower rate at 4.75 when most were about 6%.

9.1%... ouch. i wouldnt say thats not a bad deal even with minimum credit. could you get your parent to cosign with you on it? you could get a better rate that way.. i personally wouldve shopped around... (im 23 by the way... but i do have very good credit thanks to my parents.. had a credit card since i was 15 that i would use for things as i grew up that they paid off (no i didnt buy anythiing frivilous always with good intention and their knowledge)) i think its very helpful and encourage parents to do this with their kids as long as they can control their spending and are appreciative.

suberb...gotcha. yeah, some will give you up to about 110% based on your credit.

 

the interest rate I am approved for is 7.09% for 5 years through Key Bank, it's the best I have found by 1.5% and I have a hook up at a local bank that could only get me 8.7%. I just did a search for cincinnat credit unions and one, Kemba, has 6.24 as there advertised rate, I will definitely have to check it out. thanks for the help

 

yeah.. thats not a bad rate.. i think youd be hard pressed to find below 6 right now.. its been going up pretty consistently and doesnt look to go down anytime soon. But dont be afraid to expand outside cincinati as well... like i said, i did mine in a different state..in fact ive never even been to their credit union..did it all over the phone and fax.