car loan

[Henry17]

I didn't read OP's situation as an opportunity cost question. I believe OP's motivation for the car loan is to improve his credit score.

[DrSues02]

I'm in the exact same situation...have had a credit card for hte past 5 years and have paid it off in full every month. However, my credit score was only 720 or so and I couldn't qualify for the best rates...although I did manage 9%.

The only way to build up that credit score is to have varying types of credit including a car loan. Although it sucks, im basically forced to pay the interest in order to build up the credit for future purchases.

I'm planning on paying the loan off in 2 years anyways.

[soko]

[ QUOTE ]
I'm in the exact same situation...have had a credit card for hte past 5 years and have paid it off in full every month. However, my credit score was only 720 or so and I couldn't qualify for the best rates...although I did manage 9%.

[/ QUOTE ]

I think this is very misleading. Owning one credit card is not a very good idea to build credit. If you want to build credit you should have at least 3 or 4 cards. I've never had a car loan and have 760 credit score. Combined I doubt if I've charged more than a dozen things in my life, I still have $50,000 in available credit.

Anyways, for what it's worth to get the best interest rate on a home 680 credit score is good enough as long as you can meet the other requirements, money down, etc.