Suggestions on New Order and Credit Usage?

[Papa_DoD]

Hello, I came to America in July. I got my SSN in October. So my credit history is still very new

I bought a Honda CRV in November. With 25% APR
Because it was my first vehicle purchase and I did not have a credit score. That's why I had to buy a car with a high APR to build credit history.

Since the day my SSN arrived, I have paid all my credit cards and car loans on time. My credit score shows differently in many programs. But I'm guessing between 670-710. and I now have a clean credit history of over 6 months.

I placed an order for MYLR on March 7th. I'm thinking of buying it by swapping with my car and using credit.

Now let's move on to my questions:

* In some places, I saw warnings that you can choose to pay in cash and change it to use credit after the VIN code is received. Could you give information about this subject? I couldn't find the details on the forum. When exactly do I need to replace it with credit usage?

* Since I do not have a long credit history, which loan firm do you think is the most suitable? I'm thinking of using Tesla Credit.

* I'm thinking of giving my car to Tesla and swapping it. But the question in my mind is this: If I sell the car to Tesla, they give a price between 21-24k. But if I sell it to another user, the vehicle has a selling price of 26-28k. The loan closing amount of the vehicle is 28k.

Will my chances of being approved for a loan increase when swapping vehicles? Or does that not matter at all?

* What would you suggest in this process?

Thank you very much in advance for your answers.

 

[jjrandorin]

* In some places, I saw warnings that you can choose to pay in cash and change it to use credit after the VIN code is received. Could you give information about this subject? I couldn't find the details on the forum. When exactly do I need to replace it with credit usage?

After you get a Vin assigned to you. When you get a VIN assigned, you message the person back and say "I have changed my mind, I would like to use credit"... although in your case you should probably get a better understanding on if you will get approved or not for the amount of credit you want.

* Since I do not have a long credit history, which loan firm do you think is the most suitable? I'm thinking of using Tesla Credit.

They are all going to have similar approval criteria. Tesla will be "easier" because its less hoops to jump through. You still need to know whether you will get approved for the amount you want, though, so you should also plan on applying for a loan for your desired amount from wherever you bank now (here in the US)

* I'm thinking of giving my car to Tesla and swapping it. But the question in my mind is this: If I sell the car to Tesla, they give a price between 21-24k. But if I sell it to another user, the vehicle has a selling price of 26-28k. The loan closing amount of the vehicle is 28k.

You mean, "planning on trading your car in". If you own this car free and clear, thats one thing. If you have an outstanding loan, thats another. It sounds like you have a loan on the car already of 28k, which means if you trade in to tesla you will have a large chunk of negative equity. "sell to another user" might not be real pricing either. In either case, you are looking at a large chunk of negative equity which is not a good place to be.

Will my chances of being approved for a loan increase when swapping vehicles? Or does that not matter at all?

Its going to matter in your case because the amount of the negative equity is also going to need to be paid. Its going to need to be added to the loan for your new desired purchase (or, since you wont be approved for that much most likely, its going to increase the amount of money you will need to put down on the tesla.

* What would you suggest in this process?

Either not do it at all (which would be the better financial choice by a long shot) or, alternatively, plan on putting like 20-30k down. At a minimum you are going to need to pay the negative equity on the other vehicle, (figure that as 7k) and Tax / title / License on the tesla, (figure another 6- 7k) so you are looking at 14-15k before you even start applying anything to the loan to reduce the loan amount.

Given your stated lack of credit history, you will likely be told you need to come up with 20-25k down and also have a pretty crappy interest rate.

TL : DR " What would you suggest in this process" = Dont do it. Get another year or so under your belt on the current car, or sell that car separately and eat the loss, and then see if you have money left over to think about putting down on the tesla.

 

[Papa_DoD]

After you get a Vin assigned to you. When you get a VIN assigned, you message the person back and say "I have changed my mind, I would like to use credit"... although in your case you should probably get a better understanding on if you will get approved or not for the amount of credit you want.

They are all going to have similar approval criteria. Tesla will be "easier" because its less hoops to jump through. You still need to know whether you will get approved for the amount you want, though, so you should also plan on applying for a loan for your desired amount from wherever you bank now (here in the US)

You mean, "planning on trading your car in". If you own this car free and clear, thats one thing. If you have an outstanding loan, thats another. It sounds like you have a loan on the car already of 28k, which means if you trade in to tesla you will have a large chunk of negative equity. "sell to another user" might not be real pricing either. In either case, you are looking at a large chunk of negative equity which is not a good place to be.

Its going to matter in your case because the amount of the negative equity is also going to need to be paid. Its going to need to be added to the loan for your new desired purchase (or, since you wont be approved for that much most likely, its going to increase the amount of money you will need to put down on the tesla.


Either not do it at all (which would be the better financial choice by a long shot) or, alternatively, plan on putting like 20-30k down. At a minimum you are going to need to pay the negative equity on the other vehicle, (figure that as 7k) and Tax / title / License on the tesla, (figure another 6- 7k) so you are looking at 14-15k before you even start applying anything to the loan to reduce the loan amount.

Given your stated lack of credit history, you will likely be told you need to come up with 20-25k down and also have a pretty crappy interest rate.

TL : DR " What would you suggest in this process" = Dont do it. Get another year or so under your belt on the current car, or sell that car separately and eat the loss, and then see if you have money left over to think about putting down on the tesla.

Thank you very much for your detailed answer.

My 30k credit was approved with high APR without any credit score.

I think I have 2 options. First off, I'm going to sell the car I currently own. Then I can try to buy a Tesla by waiting 2 months. In this way, I regulate my total credit limit.

The other option is to wait at least 6 more months, as you said, and to Refinance the current car I use during this time.

 

[jjrandorin]

Thank you very much for your detailed answer.

My 30k credit was approved with high APR without any credit score.

I think I have 2 options. First off, I'm going to sell the car I currently own. Then I can try to buy a Tesla by waiting 2 months. In this way, I regulate my total credit limit.

The other option is to wait at least 6 more months, as you said, and to Refinance the current car I use during this time.

The Tesla isnt a 30k Loan, its going to be about a 50k loan, before you figure in your negative equity. Thats a better path forward (either of those) rather than trying to trade it in with the negative equity wrapped into another loan.

 

[Papa_DoD]

The Tesla isnt a 30k Loan, its going to be about a 50k loan, before you figure in your negative equity. Thats a better path forward (either of those) rather than trying to trade it in with the negative equity wrapped into another loan.

What I actually wanted to say was this:
While I had no credit card and no credit score, 30k credits were approved and it had been 1 week since I received my SSN.

I now have points and a car loan that I pay off regularly. I thought maybe 70K would be approved. It was just an idea

I guess what I'm going to do is this:

I'll let Tesla run my credit. If I don't get a good offer, I will try to refinance my current car on the same day. I guess; The 25% APR rate will decrease to 15%.

 

[240vPlug]

Good advice here. The first thing I would do is get your FICO score. This is the score that the majority of lenders use and it helps to know you score to get a good idea of what your rate will be. A big part of your credit score is credit age. If you just purchased in November and depending on the year and mileage you could be significantly upside down on the CRV. With the credit climate today lenders are likely to require a large down payment to approve your loan assuming a credit score of 670.

My advice, before you apply and order find out the value of your trade along with your FICO score. Anything below 670 will be considered sub prime but even borrowers above this may be required to have a large down payment for approval. After checking your FICO and figuring out how much your CRV trade is worth if you still want to move forward you can check with various credit unions. Call them on the phone and inquire about the rates they give to folks in your FICO score range.

I don't know what year and mileage your CRV is but with that high of a rate and with it being so recent you may be significantly upside down on that vehicle making a new vehicle a bad financial decision.

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