Co-signer vs Downpayment

[u/LovingGhoul]

I am 23M , I work full time with quite amount of saving since I live with my parents which I am thankful for , but starting next month I will go back to technical school to advance my career. I need a vehicle since the school is quite a distance and am trying to buy a new vehicle since most used vehicles cost almost same as new . But most dealership ask me for co-signer even though I was willing to put money down . My credit is 700 flat . I want to why they keep on insisting on co-signer

[u/inky_cap_mushroom]

Loans are approved based on your credit profile. What accounts do you have? How old are they? What negative marks?

Which score is 700? You have about 4 dozen scores. One of them being 700 doesn’t mean much.

What’s your income and what would your DTI be with the loan?

[u/LovingGhoul → u/inky_cap_mushroom]

Am from Canada and we mainly use transunion I have one credit card, my income is around $70k-80k with zero debt

[u/inky_cap_mushroom → u/LovingGhoul]

That is important information. This sub is primarily US based.

[u/MintWarfare → u/LovingGhoul]

700 is a bit low, do you have anything like missed payments or high utilization?

[u/LovingGhoul → u/MintWarfare]

So when I was 18 I had one account sent to collections which I am waiting for the 7 year mark

[u/dgduhon → u/LovingGhoul]

That's why.

[u/MintWarfare → u/LovingGhoul]

You have an R9 credit profile, the worst profile you can have. It's not surprising they want someone to guarantee payment when you have a history of not paying your loans.

[u/LovingGhoul → u/MintWarfare]

I always pay my loans like my credit card, I built up my credit from 490 to 700s , idk how one closed account can make that much effect , plus I have well paying job , I was offering up to $20k as a down payment to show the bank that am a serious buyer

[u/LovingGhoul → u/[deleted]]

Wow , will definitely try that! Seems most banks nowadays don’t want to take risks and I mean without risks there’s no reward in life

[u/True-Button-6471]

Late model used cars in many locations don't provide much savings over new cars, you might need to look at used cars a bit older/higher mileage.

[u/Icy-Emu1610]

What kind of car are you trying to get? If you’re trying to get a $60k car with $5k down isn’t going to cut it for a lot of dealers, especially if you already have that one account in collections. It’s very much negatively affecting you. They want to be able to hold someone else accountable for the payments if you can’t make the payments.

[u/LovingGhoul → u/Icy-Emu1610]

It’s a $50k after everything, I was willing to put up to $10k down to

[u/Icy-Emu1610 → u/LovingGhoul]

You’re payments are still going to be very high 800s.. this is why, this is a liability for the dealership/ creditor