Current economic condition - How has this changed financing/leasing?

[100500]

So if I were in the market to buy or lease a car today, how has the current economic situation changed things from say, one year ago? Is it significantly more difficult to get approved for a loan or lease?

I remember if you had 700+ credit, paid at least 20% down, and made enough to afford the monthlies, you were pretty much approved. Does this still fly?

[D.J@RichmondBMW]

I don't see why not.

[Imola.ZHP]

I was approved for $925/month leasing a 2008 M3 Sedan.

No money down, but they were taking a chunk off of MSRP, not 20% though, and not anywhere near 20% when they were adding my negative equity back into the price.

Credit score was 725? something just over 700 3 years ago, so I have no idea how high it is now. No reason it should have dropped, lots of reasons it should have gone up...

[LeaseCompare]

No issues here at LeaseCompare.com. I will tell you that our sources are looking closer at revolving debt.

[anklgrbr]

Believe it or not,

I actually had to co-sign for my daughter for her to buy a e92 335.

She's 28, has a credit score averaging in the 760s, and makes 64k a year and was putting 25k down.

Was only good enough to qualify for something like 20k loan at 5.9 % apr.

Seems like banks don't want to lend to first time car buyers.

[roots]

Believe it or not,

I actually had to co-sign for my daughter for her to buy a e92 335.

She's 28, has a credit score averaging in the 760s, and makes 64k a year and was putting 25k down.

Was only good enough to qualify for something like 20k loan at 5.9 % apr.

Seems like banks don't want to lend to first time car buyers.

Wow... is this through BMW FS or other bank?

[anklgrbr]

Correct,

This was checked at the dealer through BMWFS.

[Orient330iNYC]

Believe it or not,

I actually had to co-sign for my daughter for her to buy a e92 335.

She's 28, has a credit score averaging in the 760s, and makes 64k a year and was putting 25k down.

Was only good enough to qualify for something like 20k loan at 5.9 % apr.

Seems like banks don't want to lend to first time car buyers.


depending on how equipped that E92 was, it was likely 50-55K. i suspect making 64K a year gave them a raised eyebrow.

[Bimmerlearner]

High credit sore isnt the be all and end all; previous use of credit is also important.

[pilotman]

Believe it or not,

I actually had to co-sign for my daughter for her to buy a e92 335.

She's 28, has a credit score averaging in the 760s, and makes 64k a year and was putting 25k down.

Was only good enough to qualify for something like 20k loan at 5.9 % apr.

Seems like banks don't want to lend to first time car buyers.

i normally don't like to pass judgment on other people, but this situation sounds fiscally irresponsible and borderline scary.

Your daughter's gross income, before taxes and all expenses, is $64k a year, and the MSRP for her first car is what, 80% of her gross income?

Further, she is putting down $25,000 on a car loan?

I hope she is married, has a boyfriend etc or other source of income.

Is she on her own financially, or is she combining income with a significant other/husband etc? (must not be since you are co-signing for her)

Wow. Just wow.

I thought most people learned by now, but I guess not.

I am sure there are many other facts here, but why is she buying a $50k car when she only makes $64k a year? Why is she putting so much money down? She should wait a few weeks, all that interest may become deductible under proposed new federal legislation....

am I the only one who is concerned by this? :dunno:

[Imola.ZHP]

^ lol, I don't make that much and I was about to buy a $67000 (MSRP) M3...

and was approved for $925/mo. payment.

As I'm back in school now (started in January) full time and working full time, I didn't think it was a smart financial decision.

$25k down on a car is ridiculous though, $25k will buy a nice e46cic, or most of one if she really has to have a vert.

Still, its her decision. Maybe her house is paid for, maybe she rents from a family member for $100/month. My bills are VERY cheap, one reason I could afford the M3, but in the end its better that I didn't, yet...

[DaFool]

This thread got me curious...what do y'all think a good % is? I remember reading somewhere that the "experts" recommend no more than 36% of your gross income on all debt - including mortgage, etc.

Also, with the $25k, i'd recommend putting it into an online savings account, or some other liquid account, and using it to pay off your note every month rather than putting it down.

Just wanted to get thoughts. My gross income is considerably more than 67k...closer to triple that, but I'm still driving an 03 Mazda...for now! I'll probably buy an M3 in a month or so...and no, I won't be putting down $25k...though I have thought about buying it outright.

[dianuh]

i normally don't like to pass judgment on other people, but this situation sounds fiscally irresponsible and borderline scary.

Your daughter's gross income, before taxes and all expenses, is $64k a year, and the MSRP for her first car is what, 80% of her gross income?

Further, she is putting down $25,000 on a car loan?

I hope she is married, has a boyfriend etc or other source of income.

Is she on her own financially, or is she combining income with a significant other/husband etc? (must not be since you are co-signing for her)

Wow. Just wow.

I thought most people learned by now, but I guess not.

I am sure there are many other facts here, but why is she buying a $50k car when she only makes $64k a year? Why is she putting so much money down? She should wait a few weeks, all that interest may become deductible under proposed new federal legislation....

am I the only one who is concerned by this? :dunno:

eh..look at our economy...if you can't answer your own question by now, "wow. just wow"

anyways, you know nothing about her or how much she has saved. in case you didn't know, but obviously you don't cause you don't seem sophisticated enough, your "salary" does not mean your income. so why don't you lay off the dad's back and mind your own business?

[Bimmerlearner]

25k car (after 25k down) on 64k a year and maybe living at home? not exactly scary if you ask me... but thats not the point of this thread. I earn a lot more but im sure the girl on 64k has a lot more disposable income as I have a house and 3 car payments.

[kyfdx]

If she has $25K in free cash, I don't think she is doing too bad....

Unless, or until, I lose my job, this economy just means I'm paying less for things than I did last year.. For 90% of the country, I'd guess it's the same way...

[pilotman]

look, my point is that $60k BMW convertible as a first car is really extravagant.

If this guy's daughter has NO DEBT, and has a fully funded retirement, and at least 6 months cash saved up in case she loses her $64k a year job, then good for her.

But I can guarantee she is not in that position, she probably has nothing to fall back on, so when she loses her $64k a year job she WON'T be able to afford her BMW.

That is the point, you shouldn't buy things unless you can REALLY afford them, i.e. if you lost your job tomorrow could support yourself for a year, and continue to afford all the things you have (i.e. BMW convertible) :dunno:

If not, then you are living beyond your means, plan and simple.

If she has $100k in a 401k, emergency fund sufficient to sustain herself, no debt etc. then by all means I approve, but of course she doesn't beause she had to get a co-signer.

[kyfdx]

look, my point is that $60k BMW convertible as a first car is really extravagant.

If this guy's daughter has NO DEBT, and has a fully funded retirement, and at least 6 months cash saved up in case she loses her $64k a year job, then good for her.

But I can guarantee she is not in that position, she probably has nothing to fall back on, so when she loses her $64k a year job she WON'T be able to afford her BMW.

That is the point, you shouldn't buy things unless you can REALLY afford them, i.e. if you lost your job tomorrow could support yourself for a year, and continue to afford all the things you have (i.e. BMW convertible) :dunno:

If not, then you are living beyond your means, plan and simple.

If she has $100k in a 401k, emergency fund sufficient to sustain herself, no debt etc. then by all means I approve, but of course she doesn't beause she had to get a co-signer.

Well... I think a $60K car is a needless extravagance for a young person in their 20s, as well... but, it's not my money..

A lot of things are bought on credit... If you can make the payments, then you can afford it.. If everyone is required to have the cash on hand to back up every purchase, then the economy will really be in the crapper..

So here is my point: If she put $25K down on the car, then she can sell it if she loses her job.. It isn't as though she will be upside down on it... If she lives at home with Mommy and Daddy, then what does she have to worry about?

Fully funded retirement? You have to have this in your 20s, before you splurge on anything else?

In reality, it's us poor saps who denied ourselves pleasures in our youth, so we could build up massive 401Ks, only to watch them go in the crapper... Now, in our 50s, if we lose our jobs, we are really screwed.... who will pay us what we make now?

I'll take being in my 20s, with marketable skills.... and no family to worry about.... THAT would be the life! lol...

[alen]

How hypocritical can you be? You know nothing about her but you wanna judge her? What are you trying to prove? You're more financially smart/wise on an Internet board? Good job!

[Imola.ZHP]

look, my point is that $60k BMW convertible as a first car is really extravagant.

If this guy's daughter has NO DEBT, and has a fully funded retirement, and at least 6 months cash saved up in case she loses her $64k a year job, then good for her.

But I can guarantee she is not in that position, she probably has nothing to fall back on, so when she loses her $64k a year job she WON'T be able to afford her BMW.

That is the point, you shouldn't buy things unless you can REALLY afford them, i.e. if you lost your job tomorrow could support yourself for a year, and continue to afford all the things you have (i.e. BMW convertible) :dunno:

If not, then you are living beyond your means, plan and simple.

If she has $100k in a 401k, emergency fund sufficient to sustain herself, no debt etc. then by all means I approve, but of course she doesn't beause she had to get a co-signer.

lol

You should be running finances for the government!

Tangible items have a resale value should one need to "resale" them.

I agree with another poster, and can relate first hand. I have a Roth IRA account that I have contributed roughly $10,000 too (I'm only 27, I also have money in a 401k), its worth about $6500 right now. Sure, in 2-3 years we can hope that its worth much more, but I'm less than $10,000 away from having all of the cash to pay off my ZHP. So one could argue that I would have been better off paying off my car as opposed to investing in my IRA. With no car payment, I could buy lots of cheap shares right now. Instead, I still have a car payment and a lot of cash in shares that are only worth 65% of what I've got in them. But I couldn't predict the market was going to do what it did, so like everyone else working hard for their money, my money is worth less than it was at one point.

While I agree that the world would be a better place if everyone (including our government) followed your thoughts on finances, I'm going to enjoy some luxuries while I'm young. If I wait until I get older, I might not be able to enjoy them so much...

[dianuh]

"i normally don't pass judgment on people"
"But I can guarantee she is not in that position, she probably has nothing to fall back on, so when she loses her $64k a year job she WON'T be able to afford her BMW."

for christ's sake, are you serious? you act like she is your own daughter and you do her taxes. sigh