Need recommendations for auto loan for younger buyer

[StartingOver10]

From OP's original post, he is making $75k per gross and the rest belongs to his GF, that's where he gets to the $110k. They are getting married, that's why he doesn't want to put any money down on a $73k vehicle purchase. It just is not a wise move to run out and buy an expensive vehicle at the same time he is adding on all of these other expenses that he hasn't had to date. I too am assuming he has only recently graduated.

He is 23 y/o. I bet his insurance would be much higher than $100-$200/mth with a vehicle in that range + his age. He won't see his insurance rates come down until he is over 25 y/o at a minimum.

It is easy to imagine wanting to own a vehicle like that when you are 23 y/o. After all, dreams keep us going. But the reality is this: it not only isn't a wise move, it would cripple the OP financially for years to come even if everything in his purchase was perfect. Hopefully the OP will see that we are not raining on his parade so much as introducing reality so he doesn't ruin his finances so early in life.

[Remember0]

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@StartingOver10 wrote:

From OP's original post, he is making $75k per gross and the rest belongs to his GF, that's where he gets to the $110k.

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It's been a long week for me, but I reread OP's post thrice. I don't see where he says he makes 75k and GF the rest. He just says "My fiance and I are filing joint applicants with an income of about $110000" and that's that...I could of course be missing the obvious.

And OP, cure our curiosity, what car we talking about? I'm guessing M3, C63 AMG, or Corvette...

[Jake16]

This is the op. I am not completely sure why it matters, I am curious to know, but I make about 60k and she makes about 50k. We have no bills other than a 1200 dear a month rent payment. Insurance will be 200 dollars and we own her car and my motorcycle outright. The only debt we have is 8k on my current car which will go away if I get this car and give me an extra 6k. I'm not sure why with no debt 110-120k income next year and a perfect credit history including a smaller auto loan pay off that this is so unrealistic. Btw the dealer is looking for financing for me now but I may have to put some money down. My question now is if they find me financing for an interest rate that is High can I take it, make payments for a few months and refinance with a better rate then? The only thing that my credit union said was that I have the income, the credit history and debt to income ratio but just haven't had a loan this big before. So can I finance with whichever bank will finance me and then get a better rate after 6 months? Or is that not long enough. Also if the value of the car drops when I drive it off the lot would that make a refinance impossible?

[StartingOver10]

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@Remember0 wrote:

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@StartingOver10 wrote:

From OP's original post, he is making $75k per gross and the rest belongs to his GF, that's where he gets to the $110k.

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It's been a long week for me, but I reread OP's post thrice. I don't see where he says he makes 75k and GF the rest. He just says "My fiance and I are filing joint applicants with an income of about $110000" and that's that...I could of course be missing the obvious.

And OP, cure our curiosity, what car we talking about? I'm guessing M3, C63 AMG, or Corvette...

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I just went back and re-read the original post and you are right...I am the one that scr**ed up. Boy, it has been a long week. Thanks for pointing it out. In any event, $110k is not as much as it sounds like ....

Yes, you can refi after six months or so depending upon the value of the car at the time. Naturally there will be a huge amount of depreciation the moment you drive it off the lot.  Ask the CU what the max LTV would be for you on the vehicle you are looking at now. It really isn't wise to get it with a high interest rate.... 

The down payment reduces the risk of the lender, for a purchase that size without a prior history of similar purchases, a down payment is probable (as discussed before).

[notfancy]

Generally I think that most places like to see you have the loan a year before you can refinance.

To answer your other question, it depends on what you're buying. If your car depreciates a lot right after you drive it home, then your loan might be considered terribly upside down. In other words if your car is "worth" 75k now and that is what you pay for it, and you make payments on it for a year to bring the amount owed to 60k ('m just pulling numbers out of the air) but your car is determined to only be worth 50k when you go to refinance, you may have to pay an additional 10k to get the refi approved, as some places won't offer a loan for much over what the car is considered worth

[Jake16]

It is a Porsche Cayman S btw

[StartingOver10]

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@Jake16 wrote:
It is a Porsche Cayman S btw

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Lol....a Porsche helped caused a divorce for me years ago....(not blaming the Porsche). Be careful...

[Remember0]

1) Income breakdown doesn't matter for approval. But for affordability it does a little. Essentially a even split means neither of you can really afford to get laid off or quit working for personal reasons. Not a big deal, just something to keep in mind.

2) The other members weren't saying it's unrealistic per se. I think they were more concerned for your and your soon-to-be wife's financial stability. They are just afraid such a large purchase will make things financially tighter for you guys hypothetically for the next 5-6 years.

3) You can refi. But it's not guaranteed that a bank will approve just like it isn't guaranteed a bank will approve now. A lot of things come into play like the loan principal at that time, the value4)  of the car, your income, DTI, FICO, etc...

-Typically, yes, people refi after 6-12 months of payments. But it's not a given that a lender will approve even after 6-12 months. Indeed some people are stuck with their original loan until they pay it in full. Just be prepared to have to pay off the original loan. That's the best way to approach it. If your refi gets approved, awesome, but don't count on a refi.

4) No, the value dropping does not make it impossible to refi. It's just that most lenders require your refi loan to be under the car's value at the time of refi. If you are underwater, you'll have to bring enough cash to the deal such that you aren't underwater on the car anymore.

[Remember0]

OP, just realized 1 more thing for you to consider since you'll have this loan for 5-6 yrs. I think it's worth a quick discussion with your GF...

So to be honest not sure if it's my place to bring this up, but whatever I'll throw it out there. Because of your incomes, you need both (or someone needs to get a 2x raise) to support the car loan. As  such, you want to make sure that there aren't any plans to have kids or something fir the next 5-6 years imo unless you are expecting your salary individually to drastically increase.

Just a heads up because a lot of people who get married DO plan kids before 5-6 yrs. after marriage.

[notfancy]

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@Jake16 wrote:
It is a Porsche Cayman S btw

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Okay I don't know how accurate this is, but: http://www.motortrend.com/cars/2014/porsche/cayman/s_coupe/1256/cost_of_ownership/

Looks like the car will depreciate 12.5k in the first year and nearly 35k by the end of a 5 year loan. So.. if you get a price close to what motortrend shows as 63.8k you need to pay it down to about 51k before you refi.