I want a Honda Fit Sport can I afford?

  • Thread starter Thread starter Sara B
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Sara B

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I have a 2004 chevy cavalier and i hate it. It was a gift and I have about $10,000 saved up also. The exact car I want is $16730.00. I have done all the research and I have found the Honda fit sport is perfect. Not too expensive and safe. I only have one bill to pay (cell phone about 60 bucks). I'm in college(done in May) and I work at McDonalds and I make about $1200 a month which i mostly save. I also work at a nursing home when they need me so that's extra cash. My father will co-sign with me and he has almost perfect credit and I have little credit but I always pay everything in full on time. What kind of interest rate should i expect? and should i buy the car?I'm thinking of doing a $5000 down payment and i want to pay it off in 2 years...doable?
 
Try to get the car without your father co-signing a loan for you.

You will probably have to put more money down. Don't forget the Cavalier. While not a great car, it still has value. Probably not much as a trade-in esp. at a Honda dealership. you may consider selling it on your own to get more money.

If your TOTAL down payment is $10k (car and cash), then you are financing about $7000. Go for a 3 year loan and pay extra each month to reduce the principal amount quicker. So instead of 36 payments, you will have something like 30 payments or less depending on how much extra you pay a month. there are plenty of loan calculators on the internet.

Going with a longer loan will ge you approved easier and gives you lower payments in case anything unexpected happens. Use your father for these emergency situations instead of securing the loan. It looks like you should get approved on your own.
 
Have your dad apply for the loan with you as co-applicant. This is different than a co-signor. It's a better loan and better terms. That way it's his credit they will use but as co-applicant you'll build your credit rating and your credit report will benefit from the on time payment history.

The Fit is a great little car. I'd consider putting a little more down and extending the length of the loan to four years. Very few lenders will write a new car loan for only 2 years. You can always make extra payments and pay it off early with no penalty.

Just keep this in mnd. Your car payment should not be more than 20% of your take home pay. So if you only TAKE HOME $1200 a month your car payment should not be more than $240. That means your loan should be less than $12,000. With $6000 down you should be fine.

The good news is you are graduating soon and will be making substantially more than you have been at Mickey D's.
 
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