I'm almost 18 and I want to finance a brand new RX-8 but I have no credit. I would get my dad to co-sign, but he has no credit either. He is also "unemployed". Is there anything I can do to get an auto loan?

 

you're definitely not going to get a $30k auto loan with no credit. You'd be lucky to get a 20k auto loan with no credit, especially in these times.

Your only real option for an 8 would be to get about $2500 for a down payment, buy an 05/06 from a used car lot for like $12-13k, finance around $10k. With no credit, 10k finance is still going to run you around $300/month + $200/month insurance.

At 18, without parental support, can you afford $500/month for the next 5 years? Plus, if your dad is anything like mine was, you aren't going to get away with owning a car like that, not paying any bills while the family is struggling.

I bought a much cheaper car for my first finance, made most of my payments on time (DO NOT EVER MISS A PAYMENT). Once that was paid off, my credit was good enough to finance $20k.

Unfortunately, credit is earned, not given.

Good luck, I'd personally go with a cheap little gas sipper like a Civic for my first finance. Or if you save up around $2500-3000, go pay cash for a late 90s RX7. Then you get a fun car, with no payments!

 

By the time I'm going to buy the car I should have about $9000 saved up which should be in a couple of months. My parents are also going to pay $15000. I'll probably need about a $6000 loan or so.

I didn't mean jobless when I said unemployed if you didn't get the "unemployed". Sorry for not really clarifying that.

But other than that, is there anyway I can get like a $6000 or so loan? lol....

 

So he's not jobless but hes unemployed? huh?

 

This should be doable. I found the best loan programs through credit union if you can get an acct with one. Your APR might still be high for a first time buyer, but you should be able to get that kind of loan no problem, just as long as you can prove monthly income that can afford the payments.

 

if you don't have a credit union option, just goto the Mazda dealership or go onto their website.

WAIT until you're within 30 days of buying though b/c once they run your credit, you may have to have it run through multiple banks etc and you want it all to roll into the same inquiry.

 

His father probably doesn't have a steady state income - maybe a freelance type of job?

I have friends that are contract art directors for Fox and MTV, but they are contract workers and are not official employees of those companies.

 

Why not just buy a used one and invest the rest of the money somewhere where it can earn a return?

On any car you are going to lose money, but especially on a new car... On a used car you arent going to take as big of a hit, and you are going to spend less cash out of pocket. You could take the leftover money and invest it in a CD, in stocks, or in a plain old savings account that will earn a return, and this will also give you a buffer for any un-expected costs (repairs).

 

Agree 100%

You're going to take a loss on a new car almost always. You drive off the dealer lot and you lose $2-5k instantly.

Spend 12-15k on an 06/07, something with low miles but a warranty, drop some of that money into it to make it your own custom car and put the rest away.

At your age, you're almost 100% surely going to regret buying a brand new car within 2 or 3 years of buying it. Not to mention full coverage insurance on a brand new car for an 18 yr old will not be fun, possibly up to $300-400/month.

 

Hmm... I have been looking at some used cars lately and there are some I've been really interested in. What I'm kinda worried about is that some of these cars might have some kinda problems with them thus the reason for the owner selling it and in the end the maintenance and things of those sort will really kick me in the back.

 

Take them to a qualified rotary mechanic and have them looked over, spend a little up front to save a lot in the back end.

For the most part, aside from apex and side seals, these motors can take a thrashing. Either way, the money you would save from buying used would more than cover any repairs or maitenance that the vehicle may need. And worst case scenario, you could buy a warranty for 36 or 48 months as a piece of mind. Might cost you a few thousand, but would still keep money in your pocket as compared to buying a new vehicle.

 

Hmm. Thats true. I was wondering though, the 8 year 100,000 mile warranty that the cars have, do they come with every car? Is it free or is it being payed for? Are they transferable after being sold?

 

The 04-06's I can say yes for sure, up from there I want to say yes, but cannot say yes for sure.

Free. It was offered from Mazda as a result of a few issues of the motor that made it a little on the not-so-user friendly side. But some common sense can alleviate most of these problems...

They are transferable, and they cover some of the more common sense mishaps with the motor.

A few suggestions, since you are considering purchasing this vehicle, research some of the following topics related to the RX8:

Fuel economy
Ignition coils
Spark plugs
Flooding
Fuel economy (really, debate whether or not you can deal with this...)
Oil consumption
Milky stuff on the oil dipstick

The car has some quirks that you may not be used to with piston flavored engines. Research this stuff before you buy, I did not, I kind of wish I had, I am still more than happy with my car, but I was suprised as hell with the fuel economy at first. I was furious when I flooded my engine. I was shocked when I found out how much maitenance the ignition system required...

I guess the cliffs of this are, just make sure you know what you are getting into.

 

You are in an interesting position. You're saying that you have up to 24,000 dollars of cash to put towards a car.

Personally, I think the wisest financial move for you would be to not buy a sports car right now (in terms of maintenance, additional insurance) in favor of a more mundane car, for at least 2-3 years. Something that is well within your financial means so that you can make at least the monthly payment every month. The more you pay per month in addition to the monthly payment, the better your credit score will eventually be, and the sooner you will be to obtaining a loan for the car you really want. You need to establish a good credit history if you want to 1) be approved for the loans you want, 2) get the best interest rate offered.

In the interest of full disclosure, I am 23 and this is pretty much what I did, and now I have no problem whatsoever with obtaining financing for anything I want. I started with a 1992 Toyota Corolla in high school, moved to a 2002 Ford Ranger in College, and now I have an RX8 and Elise.

If you are dead set on getting an RX8 now though, I definitely want to stress that buying used (low mileage 8's can be found) would be a much better option. That way you've already taken some of the depreciation bite out of it and you have a large portion of the warranty left. I would also recommend setting up automatic payments so that you do not have to worry about making the payment.

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ALSO, IF AT ALL POSSIBLE, DO NOT GET A CO-SIGNER. Taking the note all by yourself is much better in terms of credit reporting.
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I bought my 07 RX8 used with 3000 miles on it, and it has been 100% trouble free. Then again, I don't really do anything crazy with it.

 

I'm doing research at the same moment I'm posting lol. Thanks for the heads up on everything I should do research on.

I've decided that buying a used 8 is the way to go from all the feedback I got on this thread, but I don't exactly want to pay more than $9000 or so at a time for it. I really don't think its fun having the IRS all up in my face. Would a dealer give someone that just recently turned 18 and has no credit a loan on a used car?

Also if I decide to buy from a private seller instead, is there anyway I could pay for it without getting the IRS on my back?

 

A dealer will likely be able to arrange financing for a vehicle, assuming the price is not too high. However, you need to expect that you will get reamed on the interest rate, at least until you get a bit of history on record. Then you'll probably refinance to lower the interest rate.

And never try to outsmart the IRS - the government WILL get it's money, one way or the other.

I've never bought from a private seller so take what I say here with a grain of salt, but from what I understand about the process, when you change the name on the title, you have to pay tax on the sale value of the car (from the bill of sale or market value whichever is higher).

 

don't do it. buy a dirt cheap used car for now or save up for and get a used 8 later. having car payment at your age sucks, especially for how much it'll be for a new 8, and especially for how cheap (or good a deal) used 8s are

 

I don't mean to try to outsmart the IRS and not pay the taxes for buying the car. I just worry that they would be like "where'd you get the money to buy the car?"

I am getting a used 8 and I have enough money to buy one without making payments at all, but I would rather make payments cause nowadays you can't buy anything and pay over 9000 at a time without the IRS getting all up in your face so I was wondering if the dealer would give me a loan even though I'm 18 with no credit and if there is anyway to get past the IRS checking up on me if I buy from a private seller.

 

Well, even if they did ask you that question, you got your money by saving up from work right? Unless work is some kind of illicit activity, you can spend your money how you want.

Your preoccupation with IRS activities is disturbing. There's something you're not explaining if their activities factor at all into the car buying process.

 

Wouldnt it have sent up the same flags if you were buying it new?

Anyways, if drug dealers can do it, I am sure you can too. I wouldnt worry.

 

Well I guess so. I'm just worried cause there are a lot of taxes that haven't been written in if you get my drift....

Yea lol. After all this feedback I've decided buying used is much better after all. I guess I shouldn't worry too much about that..


That still comes down to one question though. Would a dealer give me a loan knowing I have no credit history and that I just turned 18 if I didn't have a co-signer?

 

I bought my second RX8 from a private seller. When you register it in your home state with the Bill of Sale that is when they collect sales tax from you. I don't know if it's like this in your state, but in NY if the purchase price is LESS then the fair book value of the car they ask you to fill out another form just because of it. I had to do this because my RX8 cost me $12,500 but it was an 05 with only 24,000 miles, so the book value was closer to $17,000. I bought the car in New Hampshire and registered it in NY where they taxed me my sales tax of 8.375% of the $12,500.

I bought my first RX8 when I was 19 with very little credit history and got lucky with Capital One giving me a 9.5% interest rate. For the second RX8 (also 3 years later) my credit is now very healthy and I got a 4.74% interest rate from my credit union, albeit it for a smaller loan.

 

Hmm.. Thanks for the very helpful insight. I just hope I can get lucky enough to get a loan..lol. Also I don't understand why they would make you fill out a different form just because you bought it at a price less than the fairbook value. I live in NYC too.

 

Hmm trying to outsmart the IRS... sounds fishy
You can try going to the dealership for a loan but im pretty sure the 1st question they will ask you is if you have a cosigner

 

[EMBED][/EMBED] It all depends on your verifiable income.

If you can prove that you have more than enough income to make the payments, they most likely will give you the credit. You would be suprised how much banks will give someone with "no credit", everyone has to start somewhere, banks have to trust that you will pay it back. But screw it up, and they wont forget... And they all talk to each other.