topic Re: Requirements for a LARGE auto loan? in Auto Loans

Requirements for a LARGE auto loan?

Anonymous — Thu, 22 Feb 2018 01:55:31 GMT

Good evening FicoForum members.

I just had a (semi) quick question. I was wondering what some of the expectations were for a large auto loan? I live in Orange County, CA and a lot of cars for people's daily drivers are brand new (and top end) Mercedes, BMW, Lexus, and the like.... These are all cars with 100k+ price tags.

What are some of the requirements for securing a large loan? My Fico8 score across the board is an average of 680. My Auto Fico Score 8 is 735 because most of my credit has been auto loans (5 of them), and I have never missed a payment on any account. I only have 1 auto loan open from 12/16 (45,000 purchase with 31,000 left).

I am 24 years old looking to purchase a $135,000 vehicle and have approximately $25,000 cash down. Probbaly more since I am still saving and not looking to jump into a loan that high Johnny on the spot. I make $130,000 salary ($10,000/mo) and have an extra $1,650 per month in additional income from a private client. Other than the $730/mo auto loan and my $3400 rent, I have no other debts to pay.

Hopefully someone has some insight on a purchase such as this. Do you know if banks still discriminate on age, or have computeres mitigated that prejudice?

Thanks guys!

Re: Requirements for a LARGE auto loan?

marty56 — Thu, 22 Feb 2018 10:39:19 GMT

IMHO banks can't discriminate on age beyond employment history and I would think income is more of a factor on a large auto loan. Some banks and CUs may have a limit on how much the auto loan can be regardless of your FICO score. I would first check with a local CU and ask them which may save you an INQ.

Re: Requirements for a LARGE auto loan?

Anonymous — Thu, 22 Feb 2018 14:13:07 GMT

Are you planning on keeping your current car also? If you are going to get rid of your current car for this one then you should not have a problem. Penfed is very good with auto loans this size so look them up. As @marty56 stated, CUs are great for auto loans.

Re: Requirements for a LARGE auto loan?

Creditaddict — Fri, 23 Feb 2018 15:20:14 GMT

Mercedes and BMW and others with the high end cars are use to financing them every day so they won't really blink and with down payment and good credit I don't think you will have any issues at all... Mercedes here in Van Nuys always talked about they got someone into an S class with a 580 credit score... Score plays into it less than you think sometimes.

Re: Requirements for a LARGE auto loan?

Anonymous — Sat, 24 Feb 2018 07:35:33 GMT

Creditaddict,

So seeing as how they see large loans all the time, my credit profile and income should be a walk in the park for Rolls Royce FInancial Services or BMW Financial Services?

Quick question, would I possibly in Tier 1 based off my Auto Fico 8? && Yes I do plan on trading my current open auto (2013 BMW 740LXi)

Re: Requirements for a LARGE auto loan?

Creditaddict — Sat, 24 Feb 2018 15:13:48 GMT

Easily tier 1

Re: Requirements for a LARGE auto loan?

Anonymous — Sat, 24 Feb 2018 18:25:26 GMT

I went through this fairly recently. For reference, my scores are around 800, my income is 200+, and my previous car loan was for 30k. What I learned is that banks want to see a history of larger loans. Credit union offered a max of 75k at their lowest Apr at the time. Manufacturer offered 130k, but their Apr was a bit higher. Credit union told me that I could finance through dealer, and then refinance after a year, as it would show that I am able to pay off a larger loan. I ended up going with my credit union since the Apr was lower. My credit union didn't ask, or even care about the type of car or down-payment during their approval process.

You have a lot more experience with auto loans than I do, so you may have a better experience with banks or credit unions.

Re: Requirements for a LARGE auto loan?

GuyInFlorida — Sat, 24 Feb 2018 18:41:07 GMT

From someone who’s had more than 10 loans from BMW Financial in the last decade — I can tell you that you won’t have a problem getting financed or leasing a $100k+ car if you use BMW or MB’s captive finance companies.

As much as everyone wants to tout PenFed and other Credit Unions, my experience has been much less positive.

$130k doesn’t put you in the price range for a Rolls, but it will get you a very nice 7 series or M5.
Lease them rather than buy, and you’ll never be upside down in a BMW. You can generally have them with little or no money down. If they hesitate to finance you — ask about the MSD program (multiple security deposit). You put 4-5 payments in security (figure $5-6k total) and you sign and drive at top tier rates. Trade the car at a year, get another BMW and your security deposit back.

BMW Financial is by far the best company I’ve ever dealt with. Once you’re in— you’re in. If you always pay them, you can have a new car any time, even if your other credit is garbage.

Enjoy the new car.

Re: Requirements for a LARGE auto loan?

Anonymous — Sun, 25 Feb 2018 06:28:43 GMT

Thanks so much guys! You all have helped immensely.

In response to GuyInFlorida, 1) thank you for spelling that out so clearly and I will definitely keep the MSD acronym in my back pocket. I just wanted to verify that I actually am picking up a Rolls Royce. The 2010-2012 model year Ghosts have bottomed out in terms of depreciation and the two I have my eye on are $118,000 and $136,000.

I have a customer loyalty cash offer (from a recall gone bad) through BMW where they are essentially giving me a check for $15,000 if I buy a new or CPO Rolls Royce, and $7,500 if I go into a new 7 series (on top of whatever else I negotiate with the dealership... the dealer never even has to know). I am taking the $15k and using it towards my down payment which is why I will have $25,000-$30,000 down in total.

I bank with USAA and Navy Federal but all their loans tend to cap out around $75k max and its true that they don't give 2 damns about which car you are picking up. You could be severely overpaying for a Nissan Sentra and they will still shell out $75k if you're approved for it.

I just never knew about how to get your foot in the door with manufacturer specific financing. I thought it was a much more exclusive club.

PS I am not that picky about APR's 1) because I haven't been blessed with anything under 5% in the past and 2) as long as it isn't egregious and double digits, then I don't mind paying. It's all a tax write off for me anyway.

UPDATED QUESTION: Do manufacturer lenders use Auto Fico 8, or Auto Fico 2? Both scores range from 300-850 but my Auto Fico 8 is around 735 whereas my Auto Fico 2 is closer to 800 (797). Why is that?

Re: Requirements for a LARGE auto loan?

GuyInFlorida — Sun, 25 Feb 2018 20:16:28 GMT

Zach

Two things:
The Ghost is largely based on the F01 body 7 series. The G12 750i is actually a nicer car. I actually drive a 2012 Ghost with regularity and I can tell you this — you should only own a German (or German pretending to be British) car while under warranty.

I’ve spent 15 years in the Fixed-ops dept of a BMW/Rolls dealer here in Miami. If you listen to nothing else, please listen to that part. The maintenance costs will be far more than your month payment.

With that being said — Get a 750, or M5, or
6 series Gran Coupe under warranty. You’ll absolutely love the car, and it will “fit” you better because you’re young and upwardly mobile ( not old money). They’re also considerably more fun to drive and easier to live with every day (try going anywhere incognito in a Rolls or parallel parking something the length of a Suburban).

Whatever you decide to do, I wish you the best. You couldn’t be interested in a better car or better bank.

Re: Requirements for a LARGE auto loan?

GuyInFlorida — Sun, 25 Feb 2018 20:17:38 GMT

One more thing— if memory serves, BMW Financial was using some variant of traditional Fico Score, not an Auto Enhanced.

Anything over a 640 is pretty much automatically approved.

Re: Requirements for a LARGE auto loan?

Anonymous — Sun, 25 Feb 2018 20:23:05 GMT

Thank you so much GuyInFlorida. I am not too unfamilliar with the service costs. My 1979 Silver Wraith II has given my wallet a nice beating over the years.

Fortunately the 2010-2011 Ghosts I am looking at are Provenance models, meaning they are CPO (just don't ever use the term CPO when you are shopping, or they will politely but firmly ask you to leave, haha). The warranty is top notch and even comes with ding/dent/scratch/rim/windshield insurance as well. I believe that is folded into the finance agreement. Smart move to protect the bank's investment. It also doesn't hurt that my best friend/only dad I know owns a mechanic shop, so warranties are typically useless to me.

I have always wanted one of these cars, and fortunately when I am done playing with it in 6 years when the loan is gone... I will have a nice chunk of change to sell for a downpayment on a house.

You guys have really opened my eyes in a positive way. I can't wait to get into the big-boy world of fincnaing and credit now that my identity theft has been mitigated (see my post regarding an FCRA lawsuit).

Re: Requirements for a LARGE auto loan?

GuyInFlorida — Sun, 25 Feb 2018 21:03:02 GMT

I totally get that you’ve always wanted a Rolls. I’m just saying... Just sit in an 8 year old ghost and then go sit in a brand new 7 series. The early Ghost feels like something from the Stone Age in comparison.

Take a new M550xi or 750i our for a spin. Or
Even an X5 M. You’ll leave with a BMW, not a Rolls.

Re: Requirements for a LARGE auto loan?

Anonymous — Mon, 26 Feb 2018 00:55:14 GMT

I almost pulled the trigger on a 2017 740Xi, but I am one more for old-man land yachts because I am obsessed with quiet and smooth suspension. My 2005 E320 comes pretty close because when I was 18 I tore it apart and added close to 200 pounds of sound proofing to every square inch of metal. Couple that with the air suspension and slightly larger tires, its a dream... but like you said before about the ghost... the E class is aging hard.

Fortunately Rolls Royce Orange County piggybacks off Irvine BMW so I will be able to compare the Ghost to the new M760i or Alpina B7.

Re: Requirements for a LARGE auto loan?

Anonymous — Mon, 05 Mar 2018 08:20:37 GMT

UPDATE:

Thank you all who replied and talked me through this daunting process! Now that I am in, I shouldn't have any issues doing it again in the future!!

APPROVING BANK: Rolls Royce FInancial Services (same as BMWFS)
BUREAU PULLED: All 3. Trans Union (used), Experian (blocked), Equifax (blocked)
CREDIT SCORE: 736 Real FICO 8 (not Auto Fico)
CUSTOMER STATE OF RESIDENCE: CA
NEW/USED: CPO Used
YEAR OF VEHICLE: 2011
MAKE: Rolls Royce
MODEL: Ghost
MILEAGE: 27,600
RETAIL/LEASE: Retail
AMOUNT OF LOAN: $148,000 (traded in '13 740LXi $14,000 upside down & rolled it over)
TERM CONTRACTED: 72 MO
APR/LEASE RATE: 2.9% Platinum Elite Tier
MONTHLY PAYMENT: $2,300
ANNUAL INCOME: $187K + $11K + $9K
DEBT TO INCOME RATIO: Very Low, Now 28% including 4k rent
MISCELLANEOUS COMMENTARY: 24 years old, put $20,000 cash down (courtesy of BMW USA for a recall gone wrong in my 5 series). Experian and Equifax were blocked for fraud and a pending FCRA lawsuit. The finance director for the dealer said "I am tired of dealing with kids and computers" and called the CEO of BMW Financial to get an approval on my loan. Apparently that's not uncommon for Rolls Royce deals. The blocks were preventing me from getting approved automatically because their computers want to compare all 3 reports and pick the highest score. Will be picking up next week, very happy!

Re: Requirements for a LARGE auto loan?

Anonymous — Wed, 14 Mar 2018 07:16:14 GMT

I purchased a $100k luxury SUV six months out of a Chapter 13 discharge. I didn't own a home at the time , if that matters although my yearly income before taxs was $135k. Having gone through my employer CU for financing, I arrived at the dealership on a Friday. The finance officer told me that my CU would never give me that amount of a loan due to the chapter 13 and recent discharge. Since the CU was closed by the time we made the deal, they wouldn't release the SUV without the check from the CU in hand, due to my recent chapter 13. On Wednesday, I made the 4 hr drive back to the dealership after squaring away all the finance details with my CU and the dealership. That same finance officer who said it wouldnt happen, handed me the keys to my 2016 Crystal White, Premium AWD Cadillac Escalade. I drove off like a Boss as I waived good bye to him! So yes it can happen. GL!

EDIT: FWIW, I used CK to gauge my score. IIRC my CU told me to use CK Equifax to check my score before purchase. CK Equifax score was 710 and there score was 705.