topic Re: Minimum Amount Bank Will Finance in Auto Loans

Minimum Amount Bank Will Finance

Anonymous — Mon, 22 Aug 2011 20:58:06 GMT

So I had my 5 year credit plan worked out. I've taken the first step by getting 2 secured cards and started building credit. 1 year from now I was going to attempt to purchase a car to add that to my payment history. I'll be 21 years old so my insurance will be around $200/month so I was looking for say a 1999-2002 Mercedes/BMW (tired of driving little honda civics) for around 6-8k dollars. I was going to put 3-5k down and put the remaining balance on a 24 month lease to help build my credit. I'm hearing now that banks wont loan on such an old car or for such a small amount... The only reason I'm taking this route is because I want to build payment history while keeping the payments low since my insurance is as much as a car note in itself. Does anyone know if this is a possibliity or do I need to scrap the BMW idea and buy an 04 kia rio for 3k and finanance it?

Re: Minimum Amount Bank Will Finance

Cloudlb — Mon, 22 Aug 2011 21:29:03 GMT

"put 3-5k down and put the remaining balance on a 24 month lease"

I don't think you can do a "lease" on a used car, can you? Have you worked the numbers on a purchase with this much down?

Re: Minimum Amount Bank Will Finance

Creditaddict — Mon, 22 Aug 2011 21:45:18 GMT

1. Lease is usually for much newer vehicles

2. I think even a loan would be hard to come by for 3-5k 10+ year old car.

3. Do you know how much repair costs will go into a 10+ year old car especially a BMW or Mercedes!!

and really it's not very recommended by any finincial advisor to lease (they say if you can't afford to purchase, then you can't afford the car.

Re: Minimum Amount Bank Will Finance

Cloudlb — Tue, 23 Aug 2011 00:27:24 GMT

agree. I know two people with older/used BMWs and they are constantly in the shop, and very expensive shop visits, too! if it were me, I'd be checking out Consumer Reports' list of reliable used vehicles.

In the interim year, I think I'd try to develop a relationship with a credit union, possibly discussing your plans with a loan officer, and asking what the minimum they would finance, and how you could increase your success. Sometimes banks suggest a small secured loan beforehand, to improve your chances.

Re: Minimum Amount Bank Will Finance

Anonymous — Tue, 23 Aug 2011 00:29:18 GMT

Sorry idk why I said lease. I mean loan and I do realize the possibility of high repair bills.. I have a friend who has a 1989 E class which had something go wrong that cost him 700 to fix but its at 220k miles and no other problems.. I realize the risk involved but I only plan on using the car for 2 years until the note is paid and then buying a new car.. (my credit will hopefully be better and my insurance cheaper) I just don't know if it's possible.

Re: Minimum Amount Bank Will Finance

Anonymous — Tue, 23 Aug 2011 06:40:31 GMT

FYI; You can lease Used cars. It would be a bank lease and the rates are mostly terrible unless there are special/specific circumstances

Re: Minimum Amount Bank Will Finance

Anonymous — Tue, 23 Aug 2011 13:58:33 GMT

And @Cloudlb I'm currently a member of my local credit union.. I was actually planning on cancelling that account but maybe I should keep it open and see about getting a loan with them.

Re: Minimum Amount Bank Will Finance

Cloudlb — Tue, 23 Aug 2011 14:00:19 GMT

credit unions are good sources for car loans, tho

Re: Minimum Amount Bank Will Finance

Anonymous — Tue, 23 Aug 2011 16:03:21 GMT

I have a friend of mine who "kinda" drives a 1985 Ferrari. I say Kinda since he can never afford the upkeep and it barely runs so I end up picking him up. A lot.

At your age unless you are mechanically inclined and have a facility and tools for your own repairs, I think you are making a very poor car buying decision.

Yes banks and credit unions have minimum amounts they finance.

Do the math yourself on $4000 over 48 months @4.9% and see how much revenue they would generate...not enough to bother with the loan.

Also vehicle age and mileage is another big factor. Why? Well car loans are secured loan there is the expectation that if you do not pay the car note they come take the car and then sell it and recoup what they can. A 100K mile 1999 car or whatever has a much lower rate/possibility of recouping that.

Debt plans are awesome, but sometimes you need to see the big picture.

Re: Minimum Amount Bank Will Finance

Anonymous — Tue, 23 Aug 2011 16:08:51 GMT

Hmm I see what youre saying and yeah I know you're right but agh I can afford a 25-30k car but I'm trying to make a smarter financial decision (hence the short 48 month loan and building credit so later I can buy that 25-30k car and not have astronomical insurance bills) but I'm SOOOOOOOO tired of compact economical civics etc. I want leather seats and a bigger car!!!

Re: Minimum Amount Bank Will Finance

Cloudlb — Tue, 23 Aug 2011 16:32:33 GMT

"I'm SOOOOOOOO tired of compact economical civics etc. I want leather seats and a bigger car!!!"

This is your problem right here, if you are trying to make "smarter financial decision[s]". The smartest financial move you can make is to realize that "stuff" and "image" mean nothing.

Re: Minimum Amount Bank Will Finance

Anonymous — Tue, 23 Aug 2011 16:39:30 GMT

It's not about the image. It's I want something more comfortable and I make enough money to where I can afford it but i dont want to pull the trigger on a long term loan where my interest rates wont be the best and I'll be paying 300 a month on car insurance as well.

Re: Minimum Amount Bank Will Finance

Cloudlb — Tue, 23 Aug 2011 16:47:17 GMT

then you should look for something newer, safer, and cheaper to maintain, imo. Save the "nice" car purchase for next time.

Re: Minimum Amount Bank Will Finance

Anonymous — Tue, 23 Aug 2011 16:52:47 GMT

That's true.. I'm only 20 anyways idk if I'd know what to do with a beemer at my age.

Re: Minimum Amount Bank Will Finance

Anonymous — Tue, 23 Aug 2011 17:28:32 GMT

04-06 Volvo with under 100k miles? Or is that still wanting too much? Edmunds rates their reliability 5/5.

Re: Minimum Amount Bank Will Finance

cdtotten — Tue, 23 Aug 2011 18:47:45 GMT

Single, young males are the most expensive drivers to ensure. You will not see a decrease in your rates until a minimum of age 25, and/or you get married (married people are cheaper to ensure). So don't bank on insurance rates coming way down in the short term.

Buying an old BMW is not the smartest idea you could possibly have. I have 3 friends with late 90s BMWs and all of them will tell you what a horrible mistake it was. Repairs are consistent and expensive. The cars don't ride that well, and are not worth the money you paid for them.

Want to make a smart financial decision... by a used kia rio, get a decked out one if you really want, but getting a newer car, that is inexpensive (respectively) to repair, and cheaper to insure is a much better option. You are in no place in your life to be owning an expensive car, and buying a 15 year old car that used to be expensive is just as bad. It's a sense of entitlement that needs to be curbed. You are tired of driving little cars... you have only been driving for 6 years (at most). There are people that drive little cheap cars for 20 years because financially it makes more sense... those are the people that should be frustrated with it by now. Cars are a means of transportation - buy the one that fits your financial situation the best, not the one that makes you look cooler.

Re: Minimum Amount Bank Will Finance

Anonymous — Tue, 23 Aug 2011 19:01:24 GMT

@cdtotten wrote:
Single, "white" young males are the most expensive drivers to ensure. You will not see a decrease in your rates until a minimum of age 25, and/or you get married (married people are cheaper to ensure). So don't bank on insurance rates coming way down in the short term.

Buying an old BMW is not the smartest idea you could possibly have. I have 3 friends with late 90s BMWs and all of them will tell you what a horrible mistake it was. Repairs are consistent and expensive. The cars don't ride that well, and are not worth the money you paid for them.

Want to make a smart financial decision... by a used kia rio, get a decked out one if you really want, but getting a newer car, that is inexpensive (respectively) to repair, and cheaper to insure is a much better option. You are in no place in your life to be owning an expensive car, and buying a 15 year old car that used to be expensive is just as bad. It's a sense of entitlement that needs to be curbed. You are tired of driving little cars The OP is 20, I have underwear that is older then the OP has been driving. Tired is way too subjective a word in this case.... you have only been driving for 6 years (at most). There are people that drive little cheap cars for 20 years because financially it makes more sense... those are the people that should be frustrated with it by now. Cars are a means of transportation - buy the one that fits your financial situation the best, not the one that makes you look cooler.

I am still trying to wrap my mind around all the disconnects in this story, espcially that no one has that "good" a job at 20. Yeah Minimum wage or slightky better may be good when you are living with Mom and Dad, or 4 roommates in a 3 bedroom house, but very few if anyone is making great money at 20- I will even say most military personel, unless they are getting non taxed combat pay or a bonus.

Re: Minimum Amount Bank Will Finance

Anonymous — Tue, 23 Aug 2011 19:04:54 GMT

As for white, I'm filipino and as far as income, I'm an insurance agent and I make around 35k a year based on how i sell... Not great I know but enough to buy a better car.. I do appreciate the comments though.. Buying a nice car is just an impulse i'm having because all of my coworkers drive Infinites, BMW's and Mercedes... That being said theyve been doing it for 10+ years and make much more money than me.

Re: Minimum Amount Bank Will Finance

Cloudlb — Tue, 23 Aug 2011 19:38:13 GMT

I think you're smart enough to understand that this: "Buying a nice car is just an impulse i'm having because all of my coworkers drive Infinites, BMW's and Mercedes..."

is where people get into trouble. Fight this impulse. Fight it hard. Those cow orkers of yours are probably in debt to their eyeballs, or leasing a car they cannot truly afford in order to look cool.

FYI: I just took a look at CR's list of most and least reliable used cars -- for the 04-06 time period you mention-- every single one on the "best" list is a Toyota, or one of its lines.

Re: Minimum Amount Bank Will Finance

Anonymous — Tue, 23 Aug 2011 19:48:36 GMT

Hmm.. thanks i really appreciate you looking that up.. Toyota's are kind of expensive as well... Idk maybe a cheaper kia like was mentioned earlier... I know they have a "luxury" model in the amanti which is still kia priced... I can get an 06-07 for around 4-6k.. put 2-3 down and then finance the rest on a 24 month loan to build credit and payments are only going to be 80-100 a month and my insurance will be 150-200 but that's do-able.