Trying to get a 65k auto loan

[Anonymous]

What's your income and why are you spending that much on a depreciating asset at your age? Putting away that much money is your reitrement...done.

[Strogen]

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@Anonymous wrote:

Here's some backstory:

I'm 23 trying to get an auto loan for 65k. I had 10,000 to put down but i decided to put 5k towards debt to lower my utilization from 100% to about 48%.

It hasn't hit my credit reports yet, they're still showing between 80 & 100%. MyFICO is showing a score of 669 for EQ and around 630 for TU and EX. 

I have $32,000 in student loans and they are in forebarance for 6 months with a monthly payment of $364 after that. 

With the $5,000 paid of my CC debt, my monthly payment isn't any more than $150 per month. I'm paying 0 for rent right now. The only problem is I have one derogatory mark on my CR from verizon for a bill ($365) (which is currently in dispute) from a few months ago.

Let's say my monthly gross income is around $3500 from salary and $1500 from freelancing (online, car related stuff - which is why i'd like to buy a 65k car so I could use it to help my freelancing work grow - since more expensive cars are more appealing).

What would be my best bet of getting approved for an auto loan for that price range? I'm willing to do about $5,000 down but 0-$3000 down would be preferred. I can also save more if necessary. 

Can anyone recommend some credit unions that would be most likely to approve me with this information?

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Wow..... 

I highly doubt youll be approved. Bad idea and you cant bank on an idea that "it will help my appearance/business". 

Those scores are simply too low. If you manged to get approved somehow, the interest rate would be 10%+.....

Im 23 as well and im telling you this is STUPID. 

Like others have said, maybe santander will take you on at an extreme risk with an appropriate interest rate....

You could also go on carvanas website and see what they would be willing to do just as a starting point (loan wise) to see where you stand as far as sub prime lenders are concerned. 

I cannot fathom how bad the insurance will be, you cant get in any wrecks or get any tickets as it will skyrocket if it isnt already. Better get GAP insurance too if the bank doesnt make you. 

 What if you suddenly have to pay rent? What if business drys up for a spell? You dont make nearly enough to take on this kind of risk and I bet the bank agrees. What happens in 3 years when you arnt living with mom and have to pay rent, electric, internet, cell phone bill, food... etc....? 

Good luck bringing in all those paypal statements trying to convince a loan officer that you arnt making possibly the worst decision of your life. 

[Anonymous]

I recently turn 50.  Spent my whole life waiting to be in a position to buy my dream car.  If I had to do it all over again I would have gone all in on that car when I was young, had no obligations or family and would have enjoyed the experience for a few years before all of the obligations start to pile up.  Now at 50 I am finally going to get a great car (BMW M2).  I think the essential thing to consider is if you can really afford the payments, if your willing to sacrafice the freedom that you will give up because of this obligation and then make sure you don't get in too deep.  Having said that none of our opinions on what to do matter here really, it's your money.  Live a little for today but don't give up your future for short term fun.  Striking that balance is key.

[sccredit]

OP - what car is it?That may help assess whether there is a captive finance option.

[6speed8]

I too have done my fair share of cars in my lifetime.Just to name two,  $28,000 on a 2001 VW Passat that within 6 months, I added $10,000+ in wheels,suspension, Porsche brakes,HIDs,etc, to trading it for a $40,000 2003 Passat 6 speed - one of ony 424 ever imported. All the other 2002-2004 W8's were automatics. $6000 worth of BBS wheels/tires on that,etc. So on one side of the coin, yeah enjoy your youth. On the still a car guy but now 50 years old and being a little pragmatic side lol, put your money towards something more. How about a house ? Condo ? Property ? An appreciating asset vs a depreciating one. With that kind of income at your age, you can set yourself up nicely. THEN you can do what you please. House/property will give you a lot of equity.

Mind you, things change on the fly. Property values drop. Business slows down. In my own case, I went from $100G a year, to unemployed for 2 years to battling cancer, to bankruptcy. All it takes is ONE variable for things to fall apart.

Sure you'll find someone to finance you, but I'd say it might be 15% or more. Even at 3% for 6 years, that's $1000 a month on a car. Also, any underwriter worth their experience is still going factor in your $364 student loan payment into your obligations, 6 month deferrment or not.

I don't know where you live, but here in the Dallas / Ft Worth area, a $1000 mortgage payment gets you something that would cost 3 times that in the NJ / NYC area where I'm from originally. Also, think how "cool" you'd be lol. 23 years old with a HOUSE vs just another dumb 23 year old with a nice car

[C7LT1]

What type of car you looking at buying?

To answer your question: The key is going to be get the best interest rate possible. I would pay off my credit balances. Then save up the $10,000 downpayment and finance $55k. You will shouldn't need GAP insurance on a used $65k car with $10k down. Also I would pay for tax, title, and fees out of pocket. Only finance the cost of the car minus your downpayment. If you put only put $5k down and finance $60k plus TTL you will most likely by upside down for the few years. (BAD NEWS if for whatever reason you want or need to dump the car) Do it the way I am suggesting and you have to worry about being upside down. 

Keep in mind that your bottom can fall out from under you at any time. I am not saying that it will but if it do you will need to free up some cash fast. Meaning you will have to dump the car and at least break even. 

The reason I am not jumping all over you is because in 2013 (27yrs) I wanted to make the same type of purchase. $65k for a brand new car. My credit scores at the time were 700ish across the board and my household income was about $75k. For giggles I apped at NFCU and was approved for $65k no downpayment. 

I did not take out that loan and I still dont have that car. Why? Well I was renting a house at the time and I decided to should buy a house so that I could own the garage that I parked my nice car in. Bought a house in 2014.

Then I decided I should be debt free (coming in 2017) minus the house before I buy such a nice vehicle. I always knew I should be saving 20% of my income for retirement and have at least 4 months of living expenses but I decided to make that a reality before I buy a $65k car.

So, it will be 2018 before I get this car that I have wanted since 2013. I will still be a younger guy but I want to make sure that I am able to not just make the payments but truely enjoy the car.

I am not going to tell you to buy or not to buy. I wish you the best of luck on your future. If you can I would get with NFCU. Such a big auto loan with your credit file is going to be a big risk on a lender. Do youself a favor and pay down those CC's. to improve your score and show the lenders that you know how to use credit. Putting a big down payment takes some of the risk off the lender.  Remember is you are underside down they are even more upside down if they have to repo it. This is part of there decision making process. Good luck!

[Anonymous]

OP, I know yo uare not asking for our opinions but that is what you get here when you ask questions. Most of us on here are opinionated and give our opinion even when not asked for or wanted as we are here trying to help.

I get that you want to have this really nice car, I have been the same way since I was 20 and have bought 9 cars in the last 10 years, most of which were considered extravagant. Trust me, I know how nice it is to be driving around feeling pretty special as my most rescent car purchase was a Maserati. The issue with what yo are wanting to do, based on my opinion and what I beleive others are trying to say are as follows:

1. Your utilization - This needs to be around 9% or less for optimized results. If this means you need to wait to buy the car, then wait it will be better for you.

2. Your scores - For a purchase this big, your scores really need to be quite a bit higher to receive a better APR.

3. Income - Based on the provable income, not the freelance stuff as there are no paystubs to verify it, is a little light. When you look at what your monthly payments will be, it will roughly be 30% or higher which is not what most lenders want to see.

Do what you want but I beleive it might not be the best idea to purchase the car. In addition, as others have asked, what year and model is the car? There are other factors to take into consideration as well: Maintenance etc......

[TitaniumCash]

Any way you can pay off your debt first before adventuring on getting a new car? Consider all the other costs as well and always try to prepare for the worse case scenario: if you lost your job, would you have enough money to continue paying the monthly auto loan for a few months or even more? Maintenance fees? What you're doing is risky, but if you find worth and value in it, then go ahead but make plans for when things don't go smoothly as planned. 

[Anonymous]

Wait wait wait....it's $65k USED?  That probably means you're buying something that was probably knocking on the $100k door if not over.  Sorry to say, but it will not "hold it's value".  Unless you're talking about vintage Ferrari's or air-cooled Porsche's, it's going to depreciate.  The only thing that DOESN'T depreciate is maintenance/service.  Parts, service, etc will STILL be at "$100k car" levels.

Car nut myself....I've been there and done that.  At 25 years old I ordered a brand-new-from-the-factory BMW M3.  Did I love it?  HELL YEAH I loved it?  Was it worth it?  At the time...it seemed like it.  If I could go back, would I do it again?  Nope...it was money down the drain.  

tl;dr: Pay off your credit cards and student loans first.

[heyitsyeh]

If there's anything to take away from this it is to never base your car buying on presumed or projected income. There is no guarantee that such a nice car will 'enable' you to earn more income to pay the difference, so please don't make that mistake. You say you are not going into this blind and you are 100% on what you're getting yourself into but the fact of the matter is, there is no way of knowing for sure.

If anything you have the thread next door (about the guy who wanted to buy a Tesla on $70k income) to learn from.