My first post was about my experience being terminated for the first time by my employer. When I was called into the conference room to meet with my supervisor and the firm’s Executive Director, one of the first things raised as an “issue” was my personal use of a rental car obtained through the firm. To make a couple things clear: (1) the cost of the rental car was not being paid by the firm – it was charged to my personal account that I was responsible for paying, (2) when I expressed interest in renting a car, I was directed to an individual in the accounting department who handled car rentals – she made my rental car reservation and assured me I was following procedure and that this was permitted; (3) I was able to get an excellent monthly rate due to the firm’s volume of business.
I started my job one month before I started my credit repair. It was challenging getting rides to work and coordinating schedules with other people when I was working two jobs myself. I knew I needed to buy a car; I also knew with a 494 credit score, no finance company was going to give me a loan and if, by chance, I was able to secure financing, it would require a huge down payment with the remaining amount financed at an outrageous interest rate. It was pointless to even look at cars at that point – all that would come out of it would be disappointment and a bunch of inquiries hitting my credit reports. I knew, though, that if I could get a few things cleaned up on my credit reports and get my score up, I could get an auto loan. It was just going to take me a little time to do so.
They looked at me like I was shady and up to something when they asked me about the rental car. ‘Why would you rent a car for a month?’ they asked. Well, I needed to get a couple things cleared up on my credit files to get financing – I did not have $5,000 to spend on a down payment at the moment nor did I want a loan at 26% interest. Today, one of my former co-workers told me that people “talked” about me renting a car – again, as if I was doing something sketchy.
Let’s say I chose not to be “sketchy” and wanted to buy a car that was $20,000. Assuming I got lucky and only had to put down $5,000 (25%), I would be financing $15,000. The best I could expect would be 48 months on the loan. At an interest rate of 21%, my monthly payment would be $470. And remember, that was with $5,000 down.
Well, because I was shady and rented a car for a month (which cost $675 by the way), I was able to get my credit score up. I applied with VW Financial Services for a new Jetta. I was approved for a fully-loaded TDI with a sticker price of just under $30,000 with $0 down. My monthly payment is $414 per month and to a lender who will benefit me credit-wise both short- and long-term. Renting a car and being patient cost me $675 out of pocket and I got a brand new car – a car $10,000 more than the other scenario. And I saved myself $5,000 cash and almost $60 per month for 48 months – almost $3,000 there too.
So judge me all you want.
Roots, Credit & Life 