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Check with a credit union, they can get you in a car at a higher interest rate. Also if you can come up with a bigger deposit, this will help also.
When you go to your bank, make sure to bring your pay stub and your overtime pay stub if you have it and go to your HR and have them type a Letter of Employment that shows you have a job with them.
Fred
When you go to your bank, make sure to bring your pay stub and your overtime pay stub if you have it and go to your HR and have them type a Letter of Employment that shows you have a job with them.
Fred
srs5694
Active Member
Another option may be to put off the purchase for a while and save up some money. Even if you can't save enough to buy the car outright, having a bigger down-payment means you'll be financing less, which will make it easier to get approved -- and the negative effect of the higher interest rate because of poor credit will be less. What's more, if you wait a few months and are diligent about paying your bills, your credit score should improve.
Of course, all of this assumes that you can wait. If your current car is on its last legs, you might not have that luxury -- but even then, buying a used car as temporary transportation might make sense.
Of course, all of this assumes that you can wait. If your current car is on its last legs, you might not have that luxury -- but even then, buying a used car as temporary transportation might make sense.
Put a large down payment, and be prepared to pay much higher interest rates than those who have good credit. You put a large enough down payment* on something, people will finance you regardless of your credit score. Dont expect to get a lease, or a minimum down payment loan with a low credit score**.
*"large down payment* meaning 30%+ down.
** no idea what your idea of "low credit score" is.. the advice above will work for credit scores down to the low 600s. Below that, plan on waiting or paying cash.
Also, and this may not be a popular opinion, but your statements above dont go together. Ususally the statement "I have bad credit" means you do not do the best job at knowing "what you can afford". What you make per year does not detail what you can afford.
There are many reasons to have bad credit that may not be specifically someones fault, but in almost all of those cases, one is better served in reducing debt and getting their credit score up, not buying a brand new car and taking on debt that will cost a lot of extra money in interest that one would not have to pay with a higher score.
EDIT: also, the OPs post is a classic car forum first post / troll post to get people talking about exactly what I just posted above.. so its likely I just got taken.
Don't do it. Wait until your salary gets higher.
If you can save up $20,000 or more, it may be an option.
There are other things in life more important than a Tesla.
Bad credit just means that you have already shown that you can't pay for what you already have
If you can save up $20,000 or more, it may be an option.
There are other things in life more important than a Tesla.
Bad credit just means that you have already shown that you can't pay for what you already have
Perhaps consider posting to Personal Finance (but they'd want a lot more details in order to make suggestions).
Treat buying a Model 3 as your goal, and figure out the best way to get there. Don't find any possible way to get it right now, because it is almost certainly possible but could be financially a very poor decision.
You're allegedly in Long Beach, CA which by a quick Google is an expensive place to live so $88k/year already isn't getting you as far as it would in other places. I won't pry for more details, so apologies if any of my next assumptions are off.
I'm unclear on why you said you can afford it, but you need financing. If you have enough saved to buy the car outright, simply go somewhere to get a loan for perhaps 20% of the car's value. Even if this was at a high interest rate, it should be easy for you to pay off either right away or over the course of a year. That way you get the car and help out your credit score!
If what you meant is that you can afford the payments without a down payment, let me stop you right there. What exactly can you afford?
I'll start with the simple fact that a 7 year loan at 3.5% will require about $625/month, and a 12.0% loan will require about $825/month. Without knowing what rate you'll actually get, you have no way of knowing if you can afford it. If you've been basing what you can afford on Tesla's website, that's not what your reality will actually be since that's reserved for people with good credit. If you get a criminally high interest loan of 30% (they exist) you're actually looking at $1336/month. Insane.
An SR+ with no other options costs $41,190 before tax, apparently $46,741 after taxes and fees (I found a calculator on some site, this seems low to me). Let's say you somehow qualified for a 12% loan somewhere (this is ridiculously high, but could certainly be much higher). The cost of borrowing (interest) that amount over 7 years (usual maximum auto loan length) is about $22,568. That's halfway to another Model 3! Suddenly that Model 3 you're considering "only" costs $42k now costs you nearly $70k. And it's a depreciating asset to boot. You will have very little to show for that $70k 10 years later.
I don't know your motivations for getting a Tesla specifically, but if it's an EV you're after then I'd recommend the used market (all EVs, not just Tesla). I've seen a used Chevy Bolt or two start popping up even in my local area, which TBH isn't a bad EV if you can tolerate the seats. If you're looking for a quick car like a Model 3 and don't care about electric, look for a used BMW 3-series or something similar (as long as you can stomach the maintenance costs).
Advice: Save. Build up a decent down payment. Consider alternative vehicles until you can afford the Tesla, because it might take a couple years to build up the down payment and credit to do so.
Treat buying a Model 3 as your goal, and figure out the best way to get there. Don't find any possible way to get it right now, because it is almost certainly possible but could be financially a very poor decision.
You're allegedly in Long Beach, CA which by a quick Google is an expensive place to live so $88k/year already isn't getting you as far as it would in other places. I won't pry for more details, so apologies if any of my next assumptions are off.
I'm unclear on why you said you can afford it, but you need financing. If you have enough saved to buy the car outright, simply go somewhere to get a loan for perhaps 20% of the car's value. Even if this was at a high interest rate, it should be easy for you to pay off either right away or over the course of a year. That way you get the car and help out your credit score!
If what you meant is that you can afford the payments without a down payment, let me stop you right there. What exactly can you afford?
I'll start with the simple fact that a 7 year loan at 3.5% will require about $625/month, and a 12.0% loan will require about $825/month. Without knowing what rate you'll actually get, you have no way of knowing if you can afford it. If you've been basing what you can afford on Tesla's website, that's not what your reality will actually be since that's reserved for people with good credit. If you get a criminally high interest loan of 30% (they exist) you're actually looking at $1336/month. Insane.
An SR+ with no other options costs $41,190 before tax, apparently $46,741 after taxes and fees (I found a calculator on some site, this seems low to me). Let's say you somehow qualified for a 12% loan somewhere (this is ridiculously high, but could certainly be much higher). The cost of borrowing (interest) that amount over 7 years (usual maximum auto loan length) is about $22,568. That's halfway to another Model 3! Suddenly that Model 3 you're considering "only" costs $42k now costs you nearly $70k. And it's a depreciating asset to boot. You will have very little to show for that $70k 10 years later.
I don't know your motivations for getting a Tesla specifically, but if it's an EV you're after then I'd recommend the used market (all EVs, not just Tesla). I've seen a used Chevy Bolt or two start popping up even in my local area, which TBH isn't a bad EV if you can tolerate the seats. If you're looking for a quick car like a Model 3 and don't care about electric, look for a used BMW 3-series or something similar (as long as you can stomach the maintenance costs).
Advice: Save. Build up a decent down payment. Consider alternative vehicles until you can afford the Tesla, because it might take a couple years to build up the down payment and credit to do so.
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Thanks for the advice. To clarify I was planning to put $10k down, I have bad credit because life happened. Now that I am in a better financial situation, I believe that I can afford financing M3. I was thinking of getting the M3 if I get approved then after a year, refinance it for a lower rate.
Don't let love get in the way of financial decisions. (love for car)
Take a breath, clear the credit up. If something else happens, you are going to be out of at least the $10,000 with depreciation. Can you afford it?
Don't back yourself into a corner because of a stupid car.
How much are you putting into retirement?
Take a breath, clear the credit up. If something else happens, you are going to be out of at least the $10,000 with depreciation. Can you afford it?
Don't back yourself into a corner because of a stupid car.
How much are you putting into retirement?
C141medic
Active Member
My advice, if you want financial advice, speak with a financial advisor rather than posting on a car forum. Or perhaps use some common sense and speak with a bank or credit union.
10k isnt enough "down payment" for someone with self described "bad credit" to buy a model 3 unless you are talking about the base model 3 at 35.5k or so. that price does not include destination charges, so its really 37.7k . Just taxes on that will be 3,865. First months payment + registration will push that number up over 4k. I would estimate that it would end up as around 4,700 or so. None of that is "down payment" (which reduces the price of the loan).
If you have bad credit as you say, you would need to plan to have around 15k "down" which will turn into roughly 10k in actual down payment. 10k "down" on a 35k car is close to the 30% amount I figure you would need to get approved on a loan with bad credit.
If you want to follow through on this, you need to plan for 30% down and that number should be 30% of the total amount of the cost of the car (include taxes, registration and first months payment)
Last thing from me on this topic. As I mentioned before, there are plenty of reasons why someone has bad credit. As you say "life happens". We need to own cars in southern california. People not from here may not understand how poor the public transportation system is here compared to some other places... even to northern california, which has pretty awesome public transportation. While we need a car, a brand new car in this price range is a luxury item, not a need. If you continue through with this plan, you will have short term gratification of getting your car, but set yourself up very likely for "life" to "continue to happen" from a financial perspective.
I am saying this as a person who used to have a high 500s low 600s credit score in my younger days, even though I felt I was pretty diligent with my money etc. I lost a job, etc.. life happened. My credit score now is between 830-840, give or take, as credit scores fluctuate month to month. So, I understand what having a low credit score actually does to you, and I also understand that people with low credit scores dont need to be "degenerate" people.
Anyway, enough lecturing from me on this topic. Good luck with your decisions.
jrweiss98020
Tessa's Tesla
What happens when "life happens" again? Do you have 6 months living expenses saved up? Is your 401k at a level of 15% of your lifetime earnings to date? Is your [Roth] IRA maxed out? Can you continue to pay into the retirement accounts while making car & insurance payments? If any of those answers is "No", get your financial house in order before you buy an expensive car.
If you're not sure you can get financing, or if you will have to pay an exorbitant interest rate to get financing, you CANNOT afford it!
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Lasttoy
Active Member
Taking a loan from a retirement fund to buy a luxury car sounds like a great #lifehack
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