Car loans

What kind of setup do I need to pull together a loan for maybe $5,000 to $6,000? Ideally, I’d love to do this without needing a co-signer...

I’ve been working for about five months now, but my situation isn't exactly permanent yet. Right now, I'm finishing up a three-month contract, and the way it works at my company is that you have to cycle through four of these three-month stints before they actually bring you on full-time.

So, is it actually possible to land a loan if I don't have a permanent position right this second? I heard somewhere that banks might just look for something like three consecutive paystubs or something similar to prove income.

thanks

Hey? Does anyone know? Is it actually possible to land a loan at a bank, or do they strictly require you to have a permanent, full-time job?

Honestly, it doesn't matter which bank you pick. They’re always going to favor people on permanent, full-time contracts, but I don't think they'll flat-out reject you. If your credit score isn't exactly where it needs to be, they might just play it safe and demand a co-signer or some kind of guarantor to cover their backs.

But seriously, why jump straight into an auto loan? You've barely even started "enjoying" the perks of having a steady career!

The simplest approach is to just walk into a few local banks and ask them directly. Terms and conditions are constantly shifting based on various underlying factors. I'd suggest starting with the bank where you already have your primary checking account for your direct deposits...

...there is one thing I am curious about...
Here is the situation: they are going to start deducting my monthly car loan payment directly from my paycheck. However, I want to know what happens if I get laid off or decide to quit in a year or two, assuming I have enough savings to keep up with the payments. What is the actual procedure then? Since the bank won't be able to pull the funds directly from my salary once that income stops, how exactly do I handle the ongoing payments?

So you'll just be making monthly trips to the bank with piles of cash then.
They're perfectly fine with that arrangement.🙂

As long as you keep paying up on time, they couldn't care less about anything else...

Actually, my preference was to pay upfront; I’d much rather handle it myself than have it deducted from my paycheck. However, the guy over at the Ford dealership told me that wasn't an option (no idea why), insisting they’d just take it out of my wages instead...
anyway, thanks.

They’re essentially just trying to guarantee they get their loan repayment back.
From their perspective—and let's be honest, it's purely a numbers game—it's much safer to just pull the funds directly from your account rather than sitting around waiting for you to actually send the payment...
For some people, having that direct access is even a prerequisite just to get approved for the loan in the first place.

It’s actually quite straightforward: they just pull the funds directly from your checking account every single month. You can simply deposit whatever amount you want into your account, and they’ll keep drawing from it as long as there's a balance available. And hey, if things get a little tight? You can even let it dip into an authorized overdraft!

wanderingscout13 said:It’s actually quite straightforward: they just pull the funds directly from your checking account every single month. You can simply deposit whatever amount you want into your account, and they’ll keep drawing from it as long as there's a balance available. And hey, if things get a little tight? You can even let it dip into an authorized overdraft!

Look, nobody can just reach into your account and grab money unless you’ve specifically given them power of attorney or authorized it!

You have the option to set up a recurring ACH transfer so a specific amount hits a certain account on a set date... but since you're the one who authorized that standing order, you're also the one who can shut it down whenever you feel like it.

What boldeagle3 was getting at is that this way is much safer for them. An administrative hold or block can only be lifted by the party that issued it—in this case, the dealership or whichever bank they're partnered with. If you try to change the deal halfway through? Good luck trying to negotiate that with them directly.

Hey everyone.
I’ve been seeing some debate lately about whether it’s smarter to finance a car through a standard loan versus opting for a lease. I'm curious if you all agree with the sentiment that loans are the better move. Also, I read somewhere that if you lease through a business, you can write off the sales tax—I’m pretty new to this, so if anyone could break down how that actually works, I’d appreciate it.
The car I’m looking at is roughly $145,000 $0.00, and the first monthly payment would be around $80 $0.00
Thanks in advance.🙂

So, does anyone actually have a clue?😕 😕

Your accountant will be the one to walk you through all the details...

Deducting sales tax has absolutely nothing to do with leasing

Look, I didn't clarify earlier that I don't actually own a business—which is a fancy way of saying I don't. I'm just trying to figure out if it's smarter to go with a lease or a standard loan. I've heard some chatter about how leasing works for corporations regarding tax deductions and VAT.
If nobody has an answer, we might as well lock this thread.

...Look, let's just cut to the chase here. People in this country don't seem to grasp the basic concept that if you have a company car, it’s strictly for business hours. Period. Anything outside of that isn't "company business"—it's a personal trip. $50000 So, if you were to buy a vehicle outright with cash and use it for personal stuff—basically treating it as fringe benefits—the company would be on the hook for a monthly tax of 1% based on the purchase price ($500). Now, if you're leasing, say, you're paying maybe $400 a month, whereas that 1% tax would only be about $3.50—which is a hell of a lot less than $500. Of course, people around here love to play fast and loose with the rules, driving those company rigs everywhere they go, even though theoretically, they're asking for trouble. Honestly, it all just comes down to how much the IRS actually decides to care about it...
If anyone thinks I'm wrong, speak up now or just shut up forever.

rowdybadger3 said:...Look, let's just cut to the chase here. People in this country don't seem to grasp the basic concept that if you have a company car, it’s strictly for business hours. Period. Anything outside of that isn't "company business"—it's a personal trip. $50000 So, if you were to buy a vehicle outright with cash and use it for personal stuff—basically treating it as fringe benefits—the company would be on the hook for a monthly tax of 1% based on the purchase price ($500). Now, if you're leasing, say, you're paying maybe $400 a month, whereas that 1% tax would only be about $3.50—which is a hell of a lot less than $500. Of course, people around here love to play fast and loose with the rules, driving those company rigs everywhere they go, even though theoretically, they're asking for trouble. Honestly, it all just comes down to how much the IRS actually decides to care about it...
If anyone thinks I'm wrong, speak up now or just shut up forever.

You might be right, but there isn't anyone competent enough around here to confirm it, or maybe they just don't want to.😉

rowdybadger3 said:...Look, let's just cut to the chase here. People in this country don't seem to grasp the basic concept that if you have a company car, it’s strictly for business hours. Period. Anything outside of that isn't "company business"—it's a personal trip. $50000 So, if you were to buy a vehicle outright with cash and use it for personal stuff—basically treating it as fringe benefits—the company would be on the hook for a monthly tax of 1% based on the purchase price ($500). Now, if you're leasing, say, you're paying maybe $400 a month, whereas that 1% tax would only be about $3.50—which is a hell of a lot less than $500. Of course, people around here love to play fast and loose with the rules, driving those company rigs everywhere they go, even though theoretically, they're asking for trouble. Honestly, it all just comes down to how much the IRS actually decides to care about it...
If anyone thinks I'm wrong, speak up now or just shut up forever.

However, there is such a thing as being "on call," which is formally established through a couple of lines in any standard corporate policy handbook.

Beyond that, this outdated notion of dividing life into "eight hours of work, eight hours of personal enrichment, and eight hours of sleep" is a relic from the 19th century and is largely obsolete in the modern era. 😁

rowdybadger3 said:...Look, let's just cut to the chase here. People in this country don't seem to grasp the basic concept that if you have a company car, it’s strictly for business hours. Period. Anything outside of that isn't "company business"—it's a personal trip. $50000 So, if you were to buy a vehicle outright with cash and use it for personal stuff—basically treating it as fringe benefits—the company would be on the hook for a monthly tax of 1% based on the purchase price ($500). Now, if you're leasing, say, you're paying maybe $400 a month, whereas that 1% tax would only be about $3.50—which is a hell of a lot less than $500. Of course, people around here love to play fast and loose with the rules, driving those company rigs everywhere they go, even though theoretically, they're asking for trouble. Honestly, it all just comes down to how much the IRS actually decides to care about it...
If anyone thinks I'm wrong, speak up now or just shut up forever.

partially true

The thing is, you've only laid out one specific way to handle using a company car for personal trips, whereas the actual regulations allow for three distinct methods

One is what you mentioned, where you pay that 1% monthly fee based on the value. The second option is keeping a strict logbook of actual usage—basically tracking every single mile driven for personal reasons and getting reimbursed at a set rate, which is essentially the reverse of when you use your own car for work. Then there's the third way: once the workday ends, every single company vehicle gets parked in the lot and stays there, untouched for personal use. If everyone actually followed that, nobody would have to deal with the 1% tax or the mileage logs
.
But, just like you pointed out, almost everyone follows that third "option"—except they don't track miles, they don't pay the 1%, and yet, miraculously, those cars are never sitting in the parking lot after 5 PM🙂.

If the Treasury Department actually realized what was happening, they'd have a massive windfall to pad the federal budget🙂

In Germany, by the way, using a company car is treated as part of your total compensation package, so a certain percentage (maybe that 1% you mentioned or something higher, who knows) is rolled into your gross salary and taxed properly. That's why you see most German executives driving Audis or Skodas; they offer the same level of comfort and status at a lower price point (it's a practical move... or at least that's what a buddy told me when asking why a guy drives an Audi instead of a Mercedes or a BMW—apparently, it just costs him less in the long run)