BMW financial?

[Anonymous]

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@awp317 wrote:

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Was at 4400 miles of my allotted 20k, Traded my Bentley continental GT that I bought new last April for a brand new Rolls Royce Wraith. No reason other than I like trading a lot, thankfully im in a position to do that. Payment went from 1574 a month on the GT to 2688 a month for the Wraith, as I ended up going for a higher spec Wraith, my 40k down payment covered negitive equitty (was given 140k for my car, buy out was 163k) 13,500 in taxes, first months payment, and 3000 refundable securitty deposit and various small fees from the dealer, not much really down on the new car which im ok with, got 40k off the rolls from the dealer and a 20k credit from BMW financial for using them which they applied to the capilized cost reduction. My loan documents say RR financial, but its technically underwritten by BMW financial since BMW owns Rolls Royce. Same thing with my BCGT loan, documents said Bentley financial but I wrote the payments to Porsche Leasing Ltd. For comparision I had a bmw 760LI lease that was 1049 a month back in 2013. Just the curse of being a car guy. Everybody has their priorites, I would much rather spend money on cars than travel. But someone else may just see a car as an appliance, and thats fine. Different strokes for different folks. 

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@awp317

Is it this?  Damnnnnnnnnnn...... My God.. I.. I... Words fail me. 

[awp317]

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@iced wrote:

My last BMWFS pull was against all 3 CUs.

My rule of thumb with cars is if you can't pay cash for the amount you're going to finance, you shouldn't finance it. Luxury or not, every mile you put on any car will eat away at its equity, as you well know already. I don't imagine they'll have a problem financing it - all they care about is if your DTI/income can handle the monthly payment (which I'm a little surprised at BMWFS on this as you have a pretty high DTI already) and that you're willing to sign a contract to pay them that much for a car.

I don't envy that curse one bit.

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Not trying to brag but I could very easily afford the car in cash. But I have no problem what so ever using other peoples money on a depreciating asset. So that I can use my money on appreciating assets.  also My DTI I think is well within the norm, Even including this payment and my mortgage and other car lease Im at under 30%. Plus you cant take it with you. Life is short. 

Happily the car was delivered to me tonight. Now I just need to build a bigger garage for my other cars haha. 

[Anonymous]

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@awp317 wrote:

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Not trying to brag but I could very easily afford the car in cash. But I have no problem what so ever using other peoples money on a depreciating asset. So that I can use my money on appreciating assets.  also My DTI I think is well within the norm, Even including this payment and my mortgage and other car lease Im at under 30%. Plus you cant take it with you. Life is short. 

Happily the car was delivered to me tonight. Now I just need to build a bigger garage for my other cars haha. 

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Well Sir,

I am happy to report I can be of service at no charge of course in case you are busy making that money and need someone to fill up your tank.  I am willing to serve if called upon for this important role..

[MauiMan85297]

Congrats on the RR as it was my mistake as I mis read the article thinking you came out of the RR and was burying negative equity.  Gorgeous in black as well

[MauiMan85297]

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@awp317 wrote:

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@DeeBee78 wrote:

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@awp317 wrote:

       So whats the scoop with them lately? Just applied yesterday with an out of state dealer (that I have purchased from before). What score are they going to use? they pulled all three. My TU is by far my strongest since it has the least inquries. All 750s, But highest auto enhanced score by over 30 points according to the MYFICO site is my TU 8 auto. Dealer called me today said he needed to call in and work with them on an approval so I guess I wasn't approved at first. I have had two previous leases through them never late all fully satisfied. Have almost 10 years of car loan history, however longest car loan or lease is about 19 months since I trade vehicles often.  No baddies other than an 18 month old 30 day late on a card, which frustrates me to no end, a card with 78 bucks on it did that much damage, but living with it. Hasn't come up on any car I have bought in the last year, hopefully not an issue today. Im at about 30-32% DTI including house, new car, other cars and reporting CC's, just varies depending on what the CCs report that month. 

  Biggest hold up I'm sure is It will be my highest payment on a car by far however so I'm sure that going to take some convincing. Told him I could put more down or pay off another car loan and he said DTI wasn't an issue. Quoted payment is 2280 a month for 48 months. 65k down. 25,668 negative equity, 13k sales tax, First months payment, 995 fee and the rest down on the new lease as a capitalized cost reduction. Highest car payment prior to was/is 1574 a month (trade in) So Who knows. I really want the car but there are worse things than getting denied for a luxury car when people are trying to get a car loan for basic transportation. But just curious if theres any scuttle butt on them. I know my stock projection looks fantastic right now as does my company future profits in this new economy. So hopefully BMWFS is also having positive outlooks is a bit more relaxed and lets me splurge a little. Any speculation is appreciated. 

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All that negative equity from trading in vehicles is catching up with you. Why not take that down payment and pay off your current vehicle, which according to you is less than two years old? 

And this is only a lease? You're crazy if you're putting that much down on a leased vehicle. 

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Dont know how it could be catching up with me, I always paid off negitive equitty in the deal before moving to the new one, like stated above. But yes its a lease, vehicle being traded is a lease as well, far better for me tax wise to lease than buy. Down payment is all but required, Its the minimum I can put down to get the specail. They are asking for 25k down not including TTL which comes out to about 38k total down before gettting to negittive equity so around 60k is whats needed to be put down to make the deal work, But where I am with the bank currently it sounds like I might not be ready for a vehicle of this caliber yet. Which im content with. Thanks! 

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What was the residual on that car? (48 months) It had to be at least 60% and that would be a great residual on a term of 48 months.

[iced]

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@awp317 wrote:

Not trying to brag but I could very easily afford the car in cash. But I have no problem what so ever using other peoples money on a depreciating asset. So that I can use my money on appreciating assets.  also My DTI I think is well within the norm, Even including this payment and my mortgage and other car lease Im at under 30%. Plus you cant take it with you. Life is short. 

Happily the car was delivered to me tonight. Now I just need to build a bigger garage for my other cars haha. 

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First thing's first. Enjoy the car! It sounds like you've done at least some planning and have a way to pay off the debt if necessary (without touching retirement I hope).

Now, that said...

You're not using other people's money on a depreciating asset. You're using other people's money on the depreciation of someone else's asset. When the dust settles, you'll have paid other people to have paid BMWFS in the neighborhood of $100,000 for permission to borrow their car for a few years. Of course, BMW will be happy to sell you the car they're lending to you at the end.

As income goes up, DTI should go down. There's two reasons for this:

1. Expenses, aside from the occasional case of someone going gung-ho with a house and/or car, are pretty static compared to income. Whether I made $100,000 or $1,000,000 last year, my house, car, and other expenses would be about the same.

2. As income goes up, the need to accrue personal debt should go down. Just becasuse someone has the ability to borrow $2,000,000 for something doesn't mean they should, and someone with money can pay cash for things rather than borrow.

A DTI of 30% for someone who makes $50k a year ($15,000/year in debt) is normal and reasonable, but a DTI of 30% on someone who makes $500k a year is high ($150,000/year in debt). At your income levels (guessing around $500k/year), I would absolutely want my DTI to be at 5% or less.

You are correct in that from a bank's perspective, 30% DTI is in the normal range, but they aren't in the business of looking out for your best interests. They're in the business of making money off of you. This is an unfortunate truth, and something that gets a lot of people into trouble in this country.

Fun fact: 12% of Americans will earn enough to qualify to be in the top 1% of earners at least one year in their lives, but only 0.6% will earn enough to make the top 1% for 10 consecutive years. (source: https://www.nytimes.com/2014/04/20/opinion/sunday/from-rags-to-riches-to-rags.html)

Why do I mention this?

You are affluent today. You may be affluent next year, and maybe even the year after that. But wealth is ephemeral, and very, very few hold on to it long-term. However, debt is not ephemeral. Most people obtain debt 5, 7, and even 30 years at a time. If something happens and your situation changes for the worse, $100,000 in debt is going to throat punch you much harder than $15,000 in debt.

Finally, the old "you can't take it with you" line is the battle cry of consumerism. It reminds me of this oldie but goodie: https://www.youtube.com/watch?v=r0HX4a5P8eE

[Anonymous]

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@iced wrote:

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@awp317 wrote:

Not trying to brag but I could very easily afford the car in cash. But I have no problem what so ever using other peoples money on a depreciating asset. So that I can use my money on appreciating assets.  also My DTI I think is well within the norm, Even including this payment and my mortgage and other car lease Im at under 30%. Plus you cant take it with you. Life is short. 

Happily the car was delivered to me tonight. Now I just need to build a bigger garage for my other cars haha. 

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First thing's first. Enjoy the car! It sounds like you've done at least some planning and have a way to pay off the debt if necessary (without touching retirement I hope).

Now, that said...

You're not using other people's money on a depreciating asset. You're using other people's money on the depreciation of someone else's asset. When the dust settles, you'll have paid other people to have paid BMWFS in the neighborhood of $100,000 for permission to borrow their car for a few years. Of course, BMW will be happy to sell you the car they're lending to you at the end.

As income goes up, DTI should go down. There's two reasons for this:

1. Expenses, aside from the occasional case of someone going gung-ho with a house and/or car, are pretty static compared to income. Whether I made $100,000 or $1,000,000 last year, my house, car, and other expenses would be about the same.

2. As income goes up, the need to accrue personal debt should go down. Just becasuse someone has the ability to borrow $2,000,000 for something doesn't mean they should, and someone with money can pay cash for things rather than borrow.

A DTI of 30% for someone who makes $50k a year ($15,000/year in debt) is normal and reasonable, but a DTI of 30% on someone who makes $500k a year is high ($150,000/year in debt). At your income levels (guessing around $500k/year), I would absolutely want my DTI to be at 5% or less.

You are correct in that from a bank's perspective, 30% DTI is in the normal range, but they aren't in the business of looking out for your best interests. They're in the business of making money off of you. This is an unfortunate truth, and something that gets a lot of people into trouble in this country.

Fun fact: 12% of Americans will earn enough to qualify to be in the top 1% of earners at least one year in their lives, but only 0.6% will earn enough to make the top 1% for 10 consecutive years. (source: https://www.nytimes.com/2014/04/20/opinion/sunday/from-rags-to-riches-to-rags.html)

Why do I mention this?

You are affluent today. You may be affluent next year, and maybe even the year after that. But wealth is ephemeral, and very, very few hold on to it long-term. However, debt is not ephemeral. Most people obtain debt 5, 7, and even 30 years at a time. If something happens and your situation changes for the worse, $100,000 in debt is going to throat punch you much harder than $15,000 in debt.

Finally, the old "you can't take it with you" line is the battle cry of consumerism. It reminds me of this oldie but goodie: https://www.youtube.com/watch?v=r0HX4a5P8eE

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Not sure the OP posted to get your opinon on how to spend his money.  I don't disagree with your analysis I just don't think its your place in a thread about leasing a car to lecture the OP or anyone else on how to use their assets.  My rule of thumb is the only time someone has a right to comment on how I spend money is when I am spending theirs, if it is my money their opinion is meaningless.  

[iced]

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@Anonymous wrote:

Not sure the OP posted to get your opinon on how to spend his money.  I don't disagree with your analysis I just don't think its your place in a thread about leasing a car to lecture the OP or anyone else on how to use their assets.  My rule of thumb is the only time someone has a right to comment on how I spend money is when I am spending theirs, if it is my money their opinion is meaningless.  

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I don't mean for it to come off as harsh, and my apologies if it came off as overly blunt. At no point did I tell the OP how to use his assets; I only pointed out the dangers/risks of how he used his assets.

Some people read these forums to better their own financial decision-making. If we as a community only ever pointed out problems and/or provided advice when solicited, a lot of valuable advice would be lost. Even worse, people may take away that a particular decision was good when in fact it wasn't. We as a community already look the other way too often when we see someone post that they got a new 0% BT card to postpone their crushing CC debt or when someone is so addicted to sign-up bonuses they start resorting to MS and/or go into debt they can't repay. Those are just two of the many scenarios, and they often don't ask for our opinions either.