topic Re: Car Credit Issues in General Credit Topics

Car Credit Issues

Anonymous — Tue, 15 May 2007 22:03:17 GMT

Theres a young man on the forum that was speaking about getting a high interest rate on financing a vehicle. Im having a simular problem. I'm about 12 years his senior (33yrs), never really had to use credit and now am trying to purchase a vehicle that compliment my lifestyle and career and am having the hardest time getting financing. My score ranges btw 720-760 (all three bureaus); however, I have no car credit and it is making it impossible for me to obtain the amount I want. My shortest account history has been opened within the past year. I only have 4 accounts. The highest credit limit at 15k, but most are around that limit. I have a line of credit and 3 cards total. I'm trying to get a loan for about $78k. I make about 450k. Any suggestions? How can I get a decent approval to finance the vehicle that I need? And why do auto dealers have a problem with not having car credit", if you have everything else? Does the vehicle itself not serve as collateral??

Re: Car Credit Issues

Anonymous — Tue, 15 May 2007 22:17:05 GMT

That would be me... Anyway. I was reading on MSN a few weeks ago, that there are FICO Auto scores that are also looked at when purchasing a vehicle. Those may be low even though you have good credit. How much are you looking to put down on this vehicle? Just from my experience, there is always a way to get a vehicle financed, it just depends how much you want to put down upfront.

Message Edited by UnderEstimated on 05-15-2007 03:17 PM

Re: Car Credit Issues

Anonymous — Tue, 15 May 2007 22:13:03 GMT

geyoung wrote:
How can I get a decent approval to finance the vehicle that I need?

OK, you'll want to slap me for saying this, but why does a person *need* an $80,000 car? No, don't answer that.

The car finance companies are probably skittish because it's such a high amount to lend, and if you maxed out your cards you'd have another $60k in debt.

I know you don't want to hear this, but I'd set my sights a little lower. You make a good salary now, but there's no guarantee, etc. etc. Many people on this forum have had unexpected life events such as divorce, disability, death in the family, and of course job loss. Any one of these could send you into a tail spin, and the car companies would rather not take the chance that they have to send out the repo man to get your Mercedes back.

Re: Car Credit Issues

Anonymous — Tue, 15 May 2007 22:26:50 GMT

I'm a sports agent. i currently drive a $50k car, and deal with athletes that drive $100+ vehicles. I've been at my job for over 7 years and if i were to purchase a vehicle, what would you suggest I purchase?

My wife makes $175k and we currently have use of the company's car. The $78k would be our only vehicle that we would purchase in our name and we would like to drive it sometime (rather then purchasing a 30k vehicle and not drive it because our company has a better looking/driving car) - you understand? You might think its superficial, but in my line of business - superficiality is a norm. I won't want to waste money to purchase a vehicle that I would never drive just to build credit, because it would only be another debt that would be useless. If I am to purchase a car, it would have to be something I can use, not something that would be parked, that can be a tool or accessory to generate more income. Some of my guys think I should have a ferrari because other agents do, but we have been very conservative and have watched everything we have done in the past 5 years. We have the entire cost of the car, plus the other accounts in savings; but it would be no use to pay for it in cash - because I still would have NO (substantial) CAR CREDIT. Would providing access to bank account figures help obtain what we "need"?

Re: Car Credit Issues

Anonymous — Tue, 15 May 2007 22:28:51 GMT

We would not mind putting down $10-15,000.00 as long as it showed that the vehicle we are financing originally cost $78k and I have a feeling its not gonna do that.

Re: Car Credit Issues

Anonymous — Tue, 15 May 2007 22:32:25 GMT

Hey, like I said, no need to answer.

Why not pay more in cash and finance less? You might have an easier time getting a car loan for less than $80k.

Re: Car Credit Issues

Anonymous — Tue, 15 May 2007 22:48:59 GMT

mach....... wrote:

Hey, like I said, no need to answer.

Why not pay more in cash and finance less? You might have an easier time getting a car loan for less than $80k.

Our point was really not about paying for the car, it was about getting financing up that high? We could purchase the car out right, but the issue is the financing to build your credit to allow you to eventually obtain larger credit when needed? Do you understand my concern, about that?

We really could care less about the car, because we can afford it, and yet we do care because credit is more important than cash - as I've done everything with cash prior and now its hurting me when trying to build credit? We have 1 rover and 1 CL 500 that are both paid for by our company. What other vehicle would you suggest and lets say we paid $50,000.00 down, what would be the point of financing $28000.00? would it enable us to get a $250k loan the next time on lets say a Bentley GT? or would we be back on this forum wondering why after putting $50k down and financing (only) $28k why we cant get a $200+ loan?

What I'm trying to figure out is what will allow us (or anyone) to a get loan of the size above to reflect on the credit? If putting down a hefty amount allows the $78k to still show up and say "yes this is the cost and theyve paid xyz towards it and have a balance of $28k....." then I'm game, but if its only gonna reflect $28k as credit and payment towards that, then I think it defeats MY purpose - which again is really not the vehicle, but rather the credit building ("having substantial car credit"). Any suggestions?

Re: Car Credit Issues

Anonymous — Tue, 15 May 2007 23:10:18 GMT

You've got to start the credit building somewhere. Obviously, wouldn't a $30K loan in your past history help out down the road? Of course, especially considering you haven't had one. Put down $50K, get financed, have a low loan term. The point is, $78K is a lot for a lender to loan out when there hasn't been any proof that you can handle a $30K loan.

Message Edited by UnderEstimated on 05-15-2007 04:10 PM

Re: Car Credit Issues

smallfry — Tue, 15 May 2007 23:36:41 GMT

@Anonymous wrote:
You've got to start the credit building somewhere. Obviously, wouldn't a $30K loan in your past history help out down the road? Of course, especially considering you haven't had one. Put down $50K, get financed, have a low loan term. The point is, $78K is a lot for a lender to loan out when there hasn't been any proof that you can handle a $30K loan.

Message Edited by UnderEstimated on 05-15-2007 04:10 PM

Hey Mr. geyoung. You make half a mil the wifee makes nearly 200K? Most excellent. Have you ever heard of the Pile Theory? You got the world by the you know whats. Congrats. Don't worry about your FICO score. That's for us B students. Cheers.

Re: Car Credit Issues

Anonymous — Tue, 15 May 2007 23:55:52 GMT

Sounds like you're in quite a pickle [sure wish I was in that jar]. Anyway, I don't know if this makes any sense, but it seems logical to me...I would borrow the max that the dealer/bank will allow now to establish some type of auto credit history. Pay on the loan for a year, pay it off, then trade up. That way, you would have established some auto credit history and you shouldn't have the same problem in a year...

Re: Car Credit Issues

Anonymous — Wed, 16 May 2007 00:34:13 GMT

geyoung -- your post and mine crossed -- that is, I was writing my last post (about putting down more/borrowing less) before your last post posted. Anyway, I think you get everyone's drift ... buy whatever you can, and trade up as soon as you have *auto credit*. It won't take long if you play by their rules.

Re: Car Credit Issues

Anonymous — Wed, 16 May 2007 11:00:45 GMT

geyoung wrote:

You make the kind of money that you can purchase any car you want. You don't have to explain or justify to anyone (especially on this forum) why you are choosing to purchase an $80k vehicle. If I made the kind of money you do, I'd probably want a nice vehicle too and would not feel obligated in the least to explain my decisions to anyone (except maybe the banker, if he/she inquired). You earn the money and have the right to spend it any way you wish.

....hate the game not the player.

Re: Car Credit Issues

Tuscani — Wed, 16 May 2007 11:05:30 GMT

HouseHunter wrote:
geyoung wrote:
I'm a sports agent. i currently drive a $50k car, and deal with athletes that drive $100+ vehicles. I've been at my job for over 7 years and if i were to purchase a vehicle, what would you suggest I purchase?
You make the kind of money that you can purchase any car you want. You don't have to explain or justify to anyone (especially on this forum) why you are choosing to purchase an $80k vehicle. If I made the kind of money you do, I'd probably want a nice vehicle too and would not feel obligated in the least to explain my decisions to anyone (except maybe the banker, if he/she inquired). You earn the money and have the right to spend it any way you wish.
....hate the game not the player.

Well said.

OP: More info on auto scores: http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&message.id=1231

Re: Car Credit Issues

Anonymous — Wed, 16 May 2007 13:47:59 GMT

I don't know if this was addressed or not but are you having trouble getting financed through the dealership? and If so have you tried your bank? I would think that with your salary and your wife salary and I'm sure your accounts are the type of accounts that Banks dream of, why not finance through them?

Also as smallfry pointed out, with your and your wife's income, your Auto Fico is absolutly meaningless, he's right, FICO scores are for debt challenged.

Re: Car Credit Issues

Anonymous — Wed, 16 May 2007 14:22:33 GMT

I said (twice) that the OP didn't need to answer my question of why he needed an $80k car. I thought "don't answer that" was pretty clear.

Re: Car Credit Issues

Anonymous — Wed, 16 May 2007 14:34:55 GMT

your ballin man! Show them your income and see if they consider giving you an auto loan or not. If not, like somebody said above, try to get an auto loan thru your bank.

Re: Car Credit Issues

Anonymous — Thu, 17 May 2007 13:10:08 GMT

Boswd wrote:

Also as smallfry pointed out, with your and your wife's income, your Auto Fico is absolutly meaningless, he's right, FICO scores are for debt challenged.

I actually am having a hard time financing thru used car dealers, they are going thru banks and are pulling my bureau too many times. I actually havent gone directly to my bank and my bank might be the next step. I just hate that the dealer has pulled several inquiries on me to get financed and has not come up with a good deal.

I think that regardless of how much cash you make, you do really need credit. I found that in business ventures - like when you are going to purchase a home (in my income bracket) you still need credit because you're not gonna put $3 million down on a $3 million home, you have to finance it, etc. So at one point of another you need credit. I used to think I would never need credit (like you guys said), thats why I'm in this situation now and for me its frustrating because I'm used to just paying for what i want and getting it. Now, people are actually saying "I dont care how much money you have - you have no this or that type of credit."

Thanks however, I will try my bank and see. I have most of my cards with them - BOA. i heard they are not good for auto loans however.

Re: Car Credit Issues

Anonymous — Thu, 17 May 2007 15:28:26 GMT

geyoung wrote:

I think that regardless of how much cash you make, you do really need credit.

Correct. And it's completely counterintuitive -- just like you can't get a loan until you prove you don't need the money. But it looks like credit is here to stay, so we all have to learn to play the game. Who knows, you might decide to open your own sports agency and your state/city may require some type of business license or surety bond. In order to grant the license or bond, they may want to check ... your credit, of course.

One suggestion: when you go to your bank, bring your hard copies of reports and scores. Tell them to look them over (BEFORE they do their own hard pulls) and give you a good indication of whether you can expect to be approved. Explain that you don't want to add more inqs if you don't have to (even though auto loan inqs w/in a 14-day period count as a single inq). So good luck, and hang in there!

Re: Car Credit Issues

Anonymous — Thu, 17 May 2007 21:40:24 GMT

So now, dreaming of hitting the lottery isn't enough...still the FICO monkey on my back...

Please update this thread with any new details as I am officially addicted.

Staying tuned and popping popcorn.

Re: Car Credit Issues

reily28 — Thu, 17 May 2007 22:05:00 GMT

Man with that kind of money on deposit go to your main bank if they wount do it tell them your closing you acct. Take you cash and put it in a new bank with a big deposit in your acct they should be able to help!!!!!!!

Good Luck.

It sound like you got some!