Auto Loans

[x2rippx]

only on a lease? what about purchasing a used car? about 35k plus taxes and 20k down.. Will that get approved ? and how much would my apr be estimated?

[Epcot]

Assuming a lease is a little more difficult than leasing/purchasing a vehicle at the dealership where the finance manager can check your credit file and make it more 'presentable' before submitting it to BMWFS.

[MovingForward_2012]

It is the income that poses a problem mostly, and the credit as well. I was able to lease a Acura in Nov with a 724 auto enhanced score but my income is $96,000 and the car was $35,000. They typically take into consideration the full price of the vehicle against your income, not the monthly payment. The lower monthly payment is just a perk to being able to lease and not a way for people, who qualify to finance max a $17,000 car, to lease a $35,000 car. If your income was truly (not fraudulently) $30,000 and your debts were essentially zero, you might slide. But if your only verifiable income is $18K, I don't think it is a feasible option.

The other issue is your credit. You haven't had not one auto loan so your scores after auto enhancing are going to be lower than what you originally posted. When I applied to lease with Acura this past Nov, I had low utilization on my cards (about 17%) plus I had auto loan history of paying on time for 4 years, and I also had 2 other auto loans closed and in good standing prior to filing BK. the BKs were 8-9 years old when I applied. I received tier 1 approval. I had to put down the first month's payment minimum and I put $1,000 additional down to offset some of the additional costs rolled into the loan such as tinted windows, maintenance protection plan, stain mastered leather, mag chloride protectant, clear bra. Without the additional costs my monthly payment was $490 with zero down and $467 with $1,000 down. So I paid $1,000 + the first monthly payment and had the add'l costs rolled into the loan and my monthly payment is $536 a month. So I am wondering how your lease would cost so much less. I am paying over 36 months and the 30 month term you speak about isn't short enough to get your payments to $330 a month for a BMW.

Question, where did you hear the lease price would be $330-$400?

[SE7EN57]

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x2rippx wrote:

only on a lease? what about purchasing a used car? about 35k plus taxes and 20k down.. Will that get approved ? and how much would my apr be estimated?

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You might be be able to get  financed thru BMW with a 20k down payment on a 35k car but your apr will probably be thru the roof. The only sure way to know is to go down to the dealership and ask them.

[coterotie]

Here are a couple of hopefully helpful comments.

I was a bank VP a while back so I used to chat with the F and I guys when we looked at cars.

1. At one time both BMW and Mercedes had pure minimum annual income minimums.  Didn't matter credit down payment etc, unless you made a stated minimum amount they would not buy the paper.  So this is a question that can be asked of the F and I guy before he pulls credit or anything else.
2. I believe you stated you were taking over a lease not originating a lease.  If this is correct there are a couple of variables they will look at which have nothing to do with you, namely what kind of a deal did they make with the original lessor and what kind of a risk was he/she?  If you are not a better risk, you will be denied, particularly with this much time to go on the lease.
3. BMW has no charge maintenance, which is great until you hit 48,000 miles or 4 years.  Then it is a body slam.  Brake job at the stealership is $1,800 in my market, oil change $350 etc.  So be very aware of these little things when you look at your budget the last year of the lease. You can extend the maintenance/warranty, but a combo of the two was going to run me about $6K for 50,000 miles of coverage.
4. At the end of a lease, you have nothing for your payments.
5. Look around carefully, you can probably find a similar vehicle to purchase, put down a reasonable 20% and have similar payments and still have a reserve to pay for  the above mentioned maintenance etc.  You would have a longer repayment period, but by paying something extra each month as you can afford it, pay off early.
6. The captives (BMW finance), don't really have much better used car rates than you could obtain from Cap1 or a local CU.  So that should open your search up to more than just your BMW dealership.
7. If you're set on a BMW, unless you can get a good deal, look for a CPO, the warranty gets extended to 100,000 miles.  Here is the difference, we bought a 2008 X3 33K miles from an independent, it still had a small bit of waranty left and I was able to get it for $23,000 net.  The dealership had the identical vehicle with 60K miles and wanted $27.5K for a non-cpo.  A 2009 with CPO and 48K miles is running $31K.  So you can see the difference in price is really the cost of providing warranty for the next 4 years.
8. Compare the total cost of ownership between the scenarios presented and you will come to a smart (not an emotional) decision.

[MovingForward_2012]

Many people lease luxury cars so that they can drive the luxury car without the luxury payment. Leasing can be cheaper per month (not over the life of the loan) than financing a luxury vehicle. After my 36 mo lease is up, I have the option of buying out my lease by financing the residual value which was locked at time of lease signing to protect against inflation (closed-ended lease). I can finance the residual value over 36 mos and own the vehicle after 72 mos. Not sure what I will do yet. If I like the new model of my car a lot, I might re-lease until I find a car I really want to live with for longer than 3 years. This allows me to try out the latest models without having to sell a vehicle and have negative equity rolled into the loan.

[Elcid89]

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x2rippx wrote:

ok guys lets get back on topic, i can afford it. Lets get back to my question, how hard is it go get approved? have you guys seen other members get approved? with the same income and credit etc

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Based on your income, I would say no. They tend to be a conservative for an auto lender, and 22% of take home as a payment is a red flag. They will (rightly) be concerned with your ability to repay.

[x2rippx]

lThanks for the replies guys. Based on recent posts; lease is out of the option. What about buying a used car 35k not counting the taxes and other fees? I would think 15-20k down would get me approved but with a high IR. I heard people getting 18-21% thats crazy i thought with my credit history i would get between 8-12%. For future purpose which company should i apply for this type of loan? Has anyone delt with carmax, how are they?

[Elcid89]

a 42% buydown will get you approved for whatever you want and then some. It's exceedingly excessive.

You need to actually go into the dealership, talk to F&I and see what they can do for you. If their buyers come back conditioned or you don't like the rate, then offer the downpayment as a sweetener to get better terms.

[Elcid89]

Carmax has a nasty tendency to buy wrecked & repaired, then try to pass then off at flawless retail. Avoid them, or if you absolutely can't, pull the Carfax on whatever you are looking to buy. Chances are you'll find that it has been wrecked and repaired.