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Established Contributor
FloridaState12
Posts: 614
Registered: ‎08-24-2011
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Anyone have experience with recent grad programs?

Hey all...

 

Well I was originally going to try and get a car after a few months of working but I'm starting to get antsy and I REALLY want to dump my 1997 Exploder as soon as I can. Not only for functionality reasons, but social ones as well. I just got a very good job with a Fortune 500 company; as a young professional, I feel as if I don't look the part with my fossil of a car. Plus I think I'd be unfairly judged as well based on the vehicle I drive.

 

Anyway, I see Lexus has a recent grad program that gives you $1000 cash back and supposedly some deals on financing. It says you only have to have a job OFFER that starts within the next 120 days. I start this job mid-March, so well within the 120 days. It also requires no down payment and no payments for 90 days. I have my offer and everything in hand, already signed; my salary is $45,000/year and my credit is spotless, albeit I have some inquiries. 

 

So, basically, what are my chances? I just graduated last year, don't have any baddies, etc. so it appears as if I meet the criteria. A few recently opened accounts/inquiries worries me a bit, but at last check my TU FICO via Walmart was 750. 

 

I'm looking at financing a Lexus IS, either 250 or 350. I've looked at Edmunds and others and their market values are pretty low, below invoice in most cases. I suspect this is because the IS has not been redesigned in some time, and the fact that the new model is coming out this summer...all these lead me to believe I could get a nice deal on one. I think I'd get approved, but I also don't want to be crushed with APR. I'd like for my payment to be under $600, but I can go over if needed.

 

Thanks for your help!

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BlueHusky
Posts: 193
Registered: ‎04-01-2012
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Re: Anyone have experience with recent grad programs?

Congrats on the job! Here's my advice, which obviously is up to you:

 

If your credit is spotless and you have a long credit history (ie: you got a CC at 18) you should be okay score wise. Pull a FICO (or at least a FAKO from Creditkarma.com or creditsesame.com) and get an idea of where you stand. If above 720ish, just wait until you start your job and then apply for a normal credit union or bank loan. I'm a recent college grad and just started a job about 1 month ago. I applied online at Bank of America and was instantly approved online for their best rate of 2.09% for 72 months for the full amount I requested. Any "special" program such as one that allows you to secure a loan before you even start a job will likely come with higher interest rates - that's the "bonus" the lender recieves for taking a risk on a special situation.

 

Also, make sure you do the budgeting to see if you're getting in over your head. I know after driving your first car all during college when you had no money, as soon as you have an income it's tempting to just go all out and get a luxury car. I did the exact same thing, and was set on a mercedes. People would tell me on forums when I asked for advice "go used" blah blah, it's too expensive. While I did refuse to go used, I did do a little more research and realized that I could get a cheaper, but still top of the line new vehicle with just as many features (in my case the new redeisgned 2014 Mazda 6 - look it up, very sexy). While 45,000 seems like a lot, after taxes it will only be about 31,000 or so per year, which is only about $2,580 per month. With a Lexus, you'll be looking at insurance of about $200+ per month so with a $600 payment that's $800 per month, or almost 1/3 of your take home pay, on your car before you even factor in maintenance and gas...and all because you want to impress other people? The road is full of middle class people trying to "prove" they can buy a luxury car, and it's honestly not as impressive as you think when someone pulls up in their new BMW - they're a dime a dozen these days. At the very least get a few free online insurance quotes using the car you plan to buy to see how much you are going to have to pay per month for that as well.

 

So my advice: You're literally just starting out. In the world of corporations, you will go up the ladder pretty quickly and within 2-3 years you will likely be able to afford a brand new lexus much easier. At 45K, though, it's a little much - that's less than many schoolteachers and nurses make, and they typically aren't driving luxury cars. Don't overextend yourself now - try doing a short term 36 month lease on something a little cheaper and once the lease is over you can likely buy your lexus no problem.

 

One more thing to think about: is it wise to buy a vehicle based on a job you haven't even started? What if you end up absolutely hating it and want to quit and find something else? You can't if you have $800+ worth of car/insurance payments to make..




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NewbieReed
Posts: 443
Registered: ‎12-05-2012
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Re: Anyone have experience with recent grad programs?

+1

And I'm another recent grad :-)
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Established Contributor
Simply827
Posts: 735
Registered: ‎10-15-2012
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Re: Anyone have experience with recent grad programs?


BlueHusky wrote:

Congrats on the job! Here's my advice, which obviously is up to you:

 

If your credit is spotless and you have a long credit history (ie: you got a CC at 18) you should be okay score wise. Pull a FICO (or at least a FAKO from Creditkarma.com or creditsesame.com) and get an idea of where you stand. If above 720ish, just wait until you start your job and then apply for a normal credit union or bank loan. I'm a recent college grad and just started a job about 1 month ago. I applied online at Bank of America and was instantly approved online for their best rate of 2.09% for 72 months for the full amount I requested. Any "special" program such as one that allows you to secure a loan before you even start a job will likely come with higher interest rates - that's the "bonus" the lender recieves for taking a risk on a special situation.

 

Also, make sure you do the budgeting to see if you're getting in over your head. I know after driving your first car all during college when you had no money, as soon as you have an income it's tempting to just go all out and get a luxury car. I did the exact same thing, and was set on a mercedes. People would tell me on forums when I asked for advice "go used" blah blah, it's too expensive. While I did refuse to go used, I did do a little more research and realized that I could get a cheaper, but still top of the line new vehicle with just as many features (in my case the new redeisgned 2014 Mazda 6 - look it up, very sexy). While 45,000 seems like a lot, after taxes it will only be about 31,000 or so per year, which is only about $2,580 per month. With a Lexus, you'll be looking at insurance of about $200+ per month so with a $600 payment that's $800 per month, or almost 1/3 of your take home pay, on your car before you even factor in maintenance and gas...and all because you want to impress other people? The road is full of middle class people trying to "prove" they can buy a luxury car, and it's honestly not as impressive as you think when someone pulls up in their new BMW - they're a dime a dozen these days. At the very least get a few free online insurance quotes using the car you plan to buy to see how much you are going to have to pay per month for that as well.

 

So my advice: You're literally just starting out. In the world of corporations, you will go up the ladder pretty quickly and within 2-3 years you will likely be able to afford a brand new lexus much easier. At 45K, though, it's a little much - that's less than many schoolteachers and nurses make, and they typically aren't driving luxury cars. Don't overextend yourself now - try doing a short term 36 month lease on something a little cheaper and once the lease is over you can likely buy your lexus no problem.

 

One more thing to think about: is it wise to buy a vehicle based on a job you haven't even started? What if you end up absolutely hating it and want to quit and find something else? You can't if you have $800+ worth of car/insurance payments to make..


+100000

 

 

OP you didn't mention if you had student loans or anything. If not, you're extremely lucky. If so, you should definitely start out with something cheaper. You could funnel that money into savings and retirement. The earlier you save, the better.

 

Addressing your question, you typically have to meet a myriad of criteria to even qualify for a first time buyer program. One of the main ones is that you can't finance above a certain percentage of your income (usually 50%). Your score is really good so you should be able to qualify for top tier financing at most places. Check various places to see what you could qualify for.


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Established Contributor
FloridaState12
Posts: 614
Registered: ‎08-24-2011
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Re: Anyone have experience with recent grad programs?

Well I kinda wish I had seen these replies before I bought...I ended up going with Hyundai. They had an option for recent grads similar to Toytoa. 

 

I ended up getting a Genesis Coupe, 3.8 Grand Touring. Unfortunately, I overpaid by about $4,000, making my payments $600 for 72 months at 4.55% APR. I'm actually kind of pleased on the APR, but not the fact that I got ripped off. I basically got sucked in...fell in love with the car, and skimmed over everything else. 

 

$2000 went for an extended warranty, which I believe I can cancel and I will be doing so ASAP. But I still ended up paying a little less than $2000 over the market price accoridng to Edmunds and others. You live and learn, I suppose. 

 

The payments are high, but I'm likely going to get the refund for the warranty, apply it to the principle then hopefully refiance soon with my CU and cut my payments down to $500-ish. 

 

I do love the car, though. It's sporty, fast, handles great and look awesome. I am pissed I overpaid, but I guess that's a life lesson for me: never trust the dealer. 

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BlueHusky
Posts: 193
Registered: ‎04-01-2012
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Re: Anyone have experience with recent grad programs?

Well, it happens. Don't ever buy a warranty from the dealer...they typically double the price on those and they are a huge profit for them.

 

Did you pay $2,000 over MSRP? That's insane if so...I would only buy a vehicle at invoice. If you were 2,000 over invoice, that's not as bad.




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Established Contributor
FloridaState12
Posts: 614
Registered: ‎08-24-2011
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Re: Anyone have experience with recent grad programs?


BlueHusky wrote:

Well, it happens. Don't ever buy a warranty from the dealer...they typically double the price on those and they are a huge profit for them.

 

Did you pay $2,000 over MSRP? That's insane if so...I would only buy a vehicle at invoice. If you were 2,000 over invoice, that's not as bad.


Oh goodness no; I paid $2000 over the "market value" according to third party sites. I actually paid almost exactly MSRP once you deduct taxes, warranty and everything from the loan, I think it's like $100 difference from the actual sticker price. 

 

I tried to cancel the warranty today and the finance guy told me I couldn't, which is complete horses**t. I'm going to call the GM tomorrow and tell him that he has two options: give me my money back or show me where it says that I CAN'T cancel the warranty, or I'll see you in small claims court. I may even consider calling the police, not that it would do any good because I'm pretty sure this is a civil matter.

 

I know the extended warranties are worthless and a huge money-maker for the dealer (I would have never signed the papers had I saw it snuck in there), and that's exactly why the finance guy told me I couldn't cancel it. I just know I'm going to have to fight tooth and nail to get this.

 

It's dealers like this who give car salesmen such a bad name. They are the epitome of that slimy, screw-you-at-every-chance car dealership. It makes me sick that they would take advantage of me like that; I don't know how they sleep at night, I really don't. 

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Established Contributor
FloridaState12
Posts: 614
Registered: ‎08-24-2011
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Re: Anyone have experience with recent grad programs?

To focus on the positives, I absolutely LOVE my new car even if I did pay too much. :smileytongue:

 

She's purrrrdy, and loaded with all the options:

 

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3f899c0a-1d73-4025-b233-15b5301b0bd2_zps72cc26c1.jpg

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coreyb80
Posts: 107
Registered: ‎07-26-2012
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Re: Anyone have experience with recent grad programs?

Nice vehicle!


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