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What are my chances for being approved for auto financing?

I have been wanting to purchase a vehicle for sometime now. I paid all cash for my first car but for the car of my dreams, i'm going to need to finance. Now i'm not trying to buy an 07 Vette or something, were talking a '67 Mustang Coupe ($7000). If I tried saving up for it, it'd take me all year (don't plan on leaving my current job for awhile) and by then the car *might* be gone. This is not at a dealership. It's a used car lot where the owners sell the cars to prospective buyers through car sales people. So the owners sit back and relax at home till someones interested. I started my first credit card back in August of '05. Since then i've mostly paid my card on time (had two hiccups last year) and I usually pay more than the minimum. My only collatteral is my '86 Chevy Celebrity if that matters. I have a bank account and can easily save $1000 by the end of the next month (taxes). So what do you think my chances are of being approved? Should I pay off my credit card first?

Public Comments

1. The hiccups will certainly be against you on the financing front, I'd definately pay off the card first because that will have a higher rate of interest than the car loan and when they look at you for finance thats another liability they see. The Chevy probably won't help too much as collateral (though I would have thought you would sell it when you got the other car and most loans would use the new car as collateral on the loan so that if you default they take that. They will also look at whether you are full time permanent, part time permanent or casual. I had real problems getting a car loan when I was casual, but probably in your favor looking at getting a classic it will only become more valuable. Not sure how much this will help you since I'm talking from an Australian persective and from your current car I'm guessing you are from USA cos I've never heard of it
2. The lender is interested in the 3 C's. Character, capacity capital. Character is credit history, capacity is income and capital is your down or asset guaranteeing the loan. A car over 10 yrs old cannot usually be used as collateral because of low value. Alternatively, you can dig up 25% down, and with a good credit score and sufficient income, you can get decent financing. Even if your Bankrupt, there is always lenders who will lend you money but the costs and interest are nothing short of loan shark rates.
3. Pay off your credit card first. Car purchase can always wait.
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