What's up with car loans??

I want to buy this car, it is immaculate with low miles. The only fault is that it is 10 years old. It is next to impossible to get a loan on this frickin’ car! My bank will not do an auto loan on a car more than 6 years old, and they will not do personal loans either. My roommate has a car that is even older he got a loan on through his credit union, but I can’t join unless I am a family member(not) or I work for a company they are affiliated with(I don’t). So after searching all my options for the last few days I am left with getting a personal loan at outrageous interest and then getting a second job with a company affiliated with the credit union to weasel a checking account out of them, and then get it re-financed through them.:rolleyes: Why does it have to be this hard! I hate the banking industry, they are such bastards!:confused:

You found my weakness, kuwatto. Call me a bastard and I’ll be much more willing to answer your questions. :wally

Now, on with the show. You do not give nearly enough information to answer the question with any degree of accuracy, but here are some general tips:

I doubt that this statement is true. I know of no bank which has an arbitrary “age of vehicle” after which they will not make a car loan. The trade in classic cars would be most hindered by this practice, doncha think? Having said that, it IS more difficult to get a loan on an older vehicle. Why? Because the bank wants something called “collateral” for it’s money. That means the car must be valued for at least the amount you want to borrow (in reality, the car should be worth at least 20% more than the amount borrowed. 100% vehicle financing is rare). Once a car reaches 5 or 6 years of service, in most cases, the vast majority of the value is gone. The standard for setting loan values on vehicles in the banking industry is the NADA Used Car Pricing Guide. The Kelley Blue Book, among others, will also give you an idea of loan value. You failed to mention the make, model, asking price and loan amount of the car in question so I can’t look to see if you numbers are in line. Go to http://www.kbb.com/ and check it out yourself.

Some other very important factors:

  • Your credit history. Do you have one? Is it good? I doubt that your assertion that “they (the bank) will not do personal loans either” is true. It may be true that they will not do a personal loan for you based on your credit history or lack thereof (or any number of reasons - I’m not trying to impugn your credit worthiness.)
    -“My roommate has a car that is even older (and) he got a loan” has absolutely zero to do with your case. His car may have been worth more, he may have borrowed less relative to the car value, or he may have better credit. Each loan, in general, must stand on it’s own merits.

I bet to differ with Dr. Jackson. The credit union I tend to use for car loans will not finance a vehicle greater than 6 or 7 years old - I don’t remember which, but this came into play when I was looking for a used car. As I wanted to get a loan, I had to look for a car less than X years old.

I had the same experience too. I think 6 was the magic number with me. You are going to have to get a personal loan more than likely to purchase it. Here is a little trick an aquaintence of mine did that was in the same situation as you at one time too. It may/may not apply though.

He got a cash advance on his credit card for something like $5K to buy his car. His card was of course a pretty high intrest rate though. The next month he took advantage of one of those “get one of our cards and transfer your balance and get (super low rate) until its paid off” or something like that. He actually ended up with a lower rate on his car through his credit card than through the bank. I didn’t get the specifics from him, but it sounded plausible to me.


Athena - I beg to differ with your difference. If you went to that same bank and asked to borrow $5,000 with a 1956 Ford Thunderbird as collateral I’ll bet they’ll be more than happy to oblige. That’s an extreme case, no doubt, since a '56 Thunderbird is worth about $50,000, but it makes the point. So long as the bank can comfortably cover it’s risk with collateral they will make the loan. The vast majority of 6+ year old cars do not meet that criteria. I did say that it is more difficult to get a loan on an older car, but exceptions are made.

Doctor Jackson FWIW, I’m sure your parents were married:wally

Seriously, my bank is completely inflexiblve about this. They will not issue any loans on a car older than 6 years. And they also do not do personal loans. So IMHO it is the same as telling me, their valuable customer(ha!), to shove off.

I do not have bad credit. I have had a cash reserve of $1000 on my checking account for several years, and a couple credit cards that I have never had a late payment on. No bankruptcy, no bounced checks for several years, but still they don’t trust me.

Oh well, I checked with the company that I am eyeing a personal loan from and I can pay it off early without penalty, so most likely I will do that and see if I can weasel my way into a decent credit union to get it re-financed.

Maybe my OP should have asked: Why is it so frickin’ hard to get into a credit union? I mean if I work at a place affilliated with one for two weeks I can show them a pay stub and get an account presto, if I quit that job the very next day I still have the credit union account for the rest of my life if I like. WTF? That makes no sense