I'll start with my current financial situation:

In the beginning of December 2016 I applied for and got a $1,500 line of credit from Discover, in order to begin building credit. I've so far been way ahead of time with all payments, so my credit history is perfectly clean as of now. However, since my credit history is still so short, I still have no FICO score. NerdWallet shows me having a VantageScore of 717, presumably from having a long history of paying insurance and phone bills on time.

As of now, my only work is part time (recent college graduate), where I take home about $12,000 a year. I've worked there for 4 and half years, though, and the employment is perfectly stable.

My monthly expenses are nominal, I would be able to afford a loan of the amount I'm looking for (with a long enough term).

I'm in need of a new car, as my current one just broke down a couple weeks ago. I would really prefer to get a slightly higher quality car from a dealer. For example, one car I was looking at was a 2012 at $6,575, for an idea of the price range.

So far I have applied at my bank (M&T) and on an online car loan aggregator, and been declined (or told no options were on the table for the latter).

So, my question is what options are there for me for an auto loan at this point? Would a dealer be able to help me? Is it pointless until I have a FICO score tabulated? I will have at least my tax return (~$1,000) as a down payment, if that helps.

  • 1
    Is there anyone who would co-sign for you?
    – Nosrac
    Commented Jan 27, 2017 at 14:00
  • Not that I can think of. My mom's credit is in the tank from my dad's medical bills.
    – Tie-Guy
    Commented Jan 27, 2017 at 14:08
  • Do not use a cosigner.
    – Pete B.
    Commented Jan 27, 2017 at 21:54
  • May I ask why @PeteB.?
    – Tie-Guy
    Commented Jan 27, 2017 at 23:23
  • @Tie-Guy: One of the things I have lobbied for, unsuccessfully, is a "tale-of-woe" tag. If one existed you could search it for the woe that cosigning leads too. You may want to search the cosigning tag and see the myriad of problems people encounter. It rarely ends well.
    – Pete B.
    Commented Jan 30, 2017 at 12:43

1 Answer 1


Two words: Down payment.

When a car dealership is attempting to sell a car for 7K, then a bank knows if it repossesses that same car they will not be able to sell it for that much. They will only lend the full amount on very good credit risks. Of which you are not. Putting a significant amount of money down mitigates their risks and makes you a more likely loan candidate.

Back in the days before the almighty FICO a loan officer might ask you the following:

  • Where did the 1500 go that you borrowed? Why is it taking you so long to pay it back?
  • Why are you only working part time?
  • Why, if you could afford this payment, don't you have at least part of the down payment saved?
  • If worked part time and went to school, why don't you have at least two part time jobs? Why don't you have full time and part time job?

The last bullet point is key, but more on that later.

The dealer will be able to help you, but will charge you in the process. They would consider you a sub prime loan and expect to pay between 21% and 48% interest rate. Its a pretty dumb decision but many people choose this option.

In total you are proposing less than 8500 worth of debt. If you worked really hard how long would it take you for you to raise that money? Probably as little as four, and at most eight months. Why not do that and start off your life making smart money decisions?

  • 2
    @Tie-Guy The last two paragraphs of Pete's answer are crucial!
    – user45657
    Commented Jan 27, 2017 at 13:30
  • Thank you, but there was a small misunderstanding. My credit limit is $1,500. I am only using about 20% right now, and paying it off rather quickly. Otherwise, thanks for the well-formed answer!
    – Tie-Guy
    Commented Jan 27, 2017 at 13:50
  • I will point out that I certainly have been looking for other jobs, but after a year of looking I still haven't found anything. That in the job search is now harder without a car for transportation.
    – Tie-Guy
    Commented Jan 27, 2017 at 14:21
  • Perhaps some of your neighbors need some yard work or other chores done. The possibilities of exchanging your skills, talents, and strength for money are limitless.
    – Pete B.
    Commented Jan 27, 2017 at 18:36

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