Financial Question... Need Some Help Please

Ok I just need a little understanding. I have always purchased vehicles through dealerships where I worked with them to set up financing.

I have never tried to get financing for a used vehicle being purchased through an individual.

Everywhere I check for financing (bank, etc) has no problem lending me money because my credit is excellent, but they will only loan what the vehicle is worth (which is always way less than everyone asks for their modded vehicle).

If that's the case how does everyone go about financing these vehicles? Get the max loan amount and pay the difference with cash? Is there not a way to get loan to cover the whole amount?

I mean I get it. If they have to repo or take back the vehicle they will have to sell it and don't want to lose money. And I know perfect case scenario is I just pay cash, but I don't have that much cash laying around.

Any help here is appreciated.

 

Yeah they'll only loan up to the loan value. If you put a couple thousand down that 1. Covers the difference and 2. Is less risk to the bank and 3. Shows good faith

 

Unless your banks can give you 1% interest rate, you can always negotiate with the dealership to give you a lower APR. With excellent credit, you should get 2.5% or 2.9% easily through Toyota.

 

Own a home?.. You can do a home equity line of credit/loan
.. They are usually lower interest rates

 

Yeah I have no problem at the dealership.

I'm just referring to if I want to get a loan to purchase a built used truck from an individual.

I never thought about a home equity loan...

 

Just be careful because a lot of people get themselves into trouble, or negative equity situations with their homes

 

The problem is when buying a built truck from an individual it's always so much more than the truck is technically worth. Because they don't include the value of the mods within the loan value of the vehicle.

 

Ah, sorry I missed that part about buying used.

 

You'll just have to find something that books out high enough to get enough of a loan. But if it's over loan value I might recommend waiting until you have money to put down. You don't want to be flipped in it and then get into an accident and not be able to cover the payoff

 

Yeah I definitely don't want to be upside down. But most places have age limits of vehicle, mileage limitations, etc.

I can't find anyone to give more than what black book says. I couldn't get flipped into one if I wanted.

 

Also, interest on home equity loan is tax-deductable.

 

If you take out 100% of loan value and finance it for 60+ months and make minimum payments, you'll be flipped for probably 4 years

 

Just buy a used stocker then mod it....

 

Aftermarket parts on any vehicle DO NOT raise the value of the vehicle. The vehicle is worth what it is worth. If you're looking at a truck and the person is asking more than the kbb and wont budge on the price, then move on to another vehicle. It's not worth being upside down on a vehicle over aftermarket parts. Theres a reason banks don't lend more then the value of the vehicle.

 

Well, you could set it up the way you want and know things were done up to snuff. If he is worried about financing and money I would finance what I could get and have fun modding my own truck along the way as money becomes avail.

 

This.

Most mods are a waste as they only value is to the owner. They should expect to never recoop any of that money.

It's like adding a swimming pool to a house in Alaska.

 

If youre willing to pay extra for aftermarket parts, that your mistake. They do not add value.

 

Yeah, but not to banks or insurance so just make sure you don't put yourself in a bad spot

 

It's a bad financial decision. If you pay more for the vehicle, then total it you'll be out the difference because insurance won't cover above the actual value of the vehicle. Personal feelings about mods does not increase the financial value.

 

Of course a person can ask a higher price for their vehicle. They can ask whatever they want, even if nothing is done to it. It's still a bad financial decision to spend extra money on it. Why not buy the vehicle at what it's worth, then do the mods. That's what I did, and the worth or my vehicle is still more than I owe, because I didn't go upside down on it.