Approval Odds

[Damianc54]

Hello, let me start with an overview. I am 19 years old, I have 1 year of tax returns, I am self employed and made just over $100k in 2020. I am a college student and all my college is paid for via scholarships, so my monthly expenses are under $1k. My credit score ranges from high 680-720, My history consists of 3 credit cards, $7500 in total limits, never missed a payment and utilization is under 5%. I only have 1 year of history though. I want a new car or 2/3 year old car. Something like an m440, AMG c63, Audi RS5, something like that. I have a 10-12k trade in and I can put like another 5-10k down if needed. I want to finance, not lease. Will I get approved? I can more than afford the monthly payments just wondering if they'll approve me with a year of history and only year of proof of income (before I was 18 my parents filed my income under their names) 

thank you!!

[Brian_Earl_Spilner]

Anyone can get financed for anything. Question is if you'll be happy with the terms.

[Damianc54]

Do you think i can get a decent rate? like 7% or less

[nycsimone]

You're in college...why do you want to pi$$ away so much money on a $60-80k car? I get it that it's all about status in college but why not get a most affordable car and put the rest of the cash to work?

If you invest $20,000 today at 19, earn an average of 7% yearly interest...by the time you're 65 you'll have 1/2 a million sitting in the bank.

The reality is that if you're willing to put down 30% on a car you can get almost anyone to finance it.

[Loquat]

The OP ask a question and I'd like to kindly request that we stick the topic of the discussion or don't reply.  We all go about our finances in a way that works for us and none of us need to justify our financial decisions to anyone on this here forum. 

Thanks in advance for your understanding. 

[Damianc54]

Because I have always loved cars and I want to upgrade from my Audi A4. I've been into reselling since I was 13 and stocks since 16. I have over 120k invested into long term stocks and I actively invest more each month, most of my income comes from day trading and swing trades. I also purchased a rental property under my parents name 3 months ago, it's a duplex, I have a family member living in one unit and the other has a tenant. In the next few months I will move into the family unit and essentially live for free as my tenant pays my mortgage. I wouldn't mind paying 700-1000 for a nice car when I'd be spending more on rent had I not bought the rental. In a year I will cash our refinance and buy another. So don't worry, I've always made sure to invest my money first haha. 

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@nycsimone wrote:

You're in college...why do you want to pi$$ away so much money on a $60-80k car? I get it that it's all about status in college but why not get a most affordable car and put the rest of the cash to work?

If you invest $20,000 today at 19, earn an average of 7% yearly interest...by the time you're 65 you'll have 1/2 a million sitting in the bank.

The reality is that if you're willing to put down 30% on a car you can get almost anyone to finance it.

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[Brian_Earl_Spilner]

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@Damianc54 wrote:

Do you think i can get a decent rate? like 7% or less

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I think it's possible, but will depend on if it's used or new. You should try cap1 auto navigator. It will give you a rough estimate of where you stand.

[dunn2500]

your killing it @ 19 bro, dont even want to know where i spent my late teens and 20s at.....you can get financed its just the terms like someone stated.....try cap 1 it will give you decent starting point without bunch HP......i bought a 50k truck with no credit score whatsoever in 2019 so am sure youll be fine

[Anonymous]

I believe the biggest detriment to your approval would be the lack of installment loan history and, more specifically, lack of auto loan history. WIth ~20k down you are sitting in a decent DTI scenario. However, the rate may not be favorable. You can try CapOne's Auto Navigator prequalification, however, I am not sure how accurate it will be in your specific situation.

What I believe will help you the most is going to a dealership and getting the F&I manager to work on getting an approval at the highest tier they can bump you to. If you finance through one of the captive lenders (BMW Financial, Audi Financial, etc.) the dealer is going to have more influence over the interest rate than your limit credit history is going to get you. I know you said you want to finance, but leases are typically easier to get approved for first time buyers and might be a good way for you to establish a relationship with a lender if you intend to buy more cars from that brand in the future. You could go for a no money down lease and after a year of on time payments you will score out at the top tier with that lender in the future.

[Sandman771]

To piggyback off what was just stated you could single pay a 2 year lease with your trade -in and some cash so basically that you cap reduction cost downpayment and all 24 or 36 paymentsBut captive lenders tend to buy deep especially BMW with CPO cars, so that may be a good way to go.