Approx. down payment to get accepted?

[Anonymous]

I'm interested in purchasing a 2012 Nissan GT-R w/ a price of around $80-85K, was wondering if anyone could take an educated guess on how much of a down payment I would need? I was told 10% should be enough, but would like to get more educated opinions as that seems a bit low considering my lack of auto loan history.

My score is currently 690 TransUnion, but that was with 2 credit cards near their credit limit (I had an offer for no interest for a year and took advantage). I paid the balance in full and will check score again in 30 days when it updates.

- I am 45 and have no auto history (always paid cash, first time financing car).
- Income is 76K this year but will be 110K the following years.
- 2 credit cards w/ no balance, 45k remaining on mortgage, 10k remaining on equity loan
- Debt to income ratio is 11%
- No bankruptcy, only negative on credit report is a few 30-90 day late payments for equity loan over 2 years ago because I was out of state for a while and forgot, they never called me about it, just sent letters to the house which did me no good.

I do have sufficient funds to cover the car, but have thought it over and I've decided I would be more comfortable financing it for multiple reasons, mainly to build my credit.

[Anonymous]

First off excellent choice on car. I'm hoping to move on to a GTR once I get my wife into a new car and pay off my car(I owe 13k on it and 5k on a personal loan) I drive a turbocharged NSX so I guess I can get by driving that for the time being until the GTR becomes a reality.

I don't have a lot of knowledge on auto loans but I'll chip in what I can.

These are the 3 major concerns I see which I added a few comments for below:

What percent of the cars value will the bank be willing to finance, every bank is different.

What will your final monthly Debt to income be after adding your new car payment to your other monthly debt? If this is below 30% I can't see there being any problems.

What will your monthly car payment be compared to your monthly income?

I was able to get 100% financing through navy federal credit union for my NSX 2 years ago with a 650 credit score or so with no auto history either. This was a 20 year old car with almost 100k on it, interest rate was higher because it was older but you shouldn't have that problem. They said as long as the value is there(from Nada) then they have no problem financing. Not all banks will do this though so it would be best to just give them a call your bank and they might be able to answer a few of these questions without even pulling your credit. With the car being so new I wouldn't see a problem financing 90%, even more so if you can show the money in the bank. I'm not sure if they have unusual rules for used cars as expensive as the GTR, again something your bank might be able to answer quickly. If the miles are low enough the bank may even consider this a new car loan which would help.

The bank will only be able to use income you can prove so no future income. If your most recent pay stubs can only show 76k then you would have to use that for all your debt to income valuations. So base all your debt to income off what you can prove you are making currently. Financing 75k in addition to your other payments might fit in your monthly DTI but I think some banks don't like to see the car payment of over 15% of your monthly income. I'd imagine they would just request you put more money down in this car to meet their requirements and not just decline you all together.

If you don't mind letting go of the cash and really just want to see your credit improve just take an auto loan out for a lot less, 30-50k. I doubt having a higher loan amount will help increase your credit profile much faster if at all.

[Anonymous]

I agree with your decision to take on a loan as long as you receive an interest rate in the low digits, which having enough cash and a prime score should allow you to do. What you want to do is find a payment that fits EASILY into your budget, and negotiate a lower pricetag. You will probably have problems finding credit in the 80-85k range as from my understanding most lenders prefer to lend about 70% or lower of your yearly income, which currently at 76k puts you into an ideal loan of 56k or lower. 

I would negotiate two points in your visit to the dealer. First is the price or the car, and second is the interest rate. DO NOT discolse you can buy it up front, find out what they can offer without that, just tell them you have a resonable downpayment of 10k, which takes care of most lost equity from driving the car off the lot. Ask for a concrete offer in writing (stating price and interest rate), take that to another dealership and see if they can beat it. If you cannot get the interest below 5%, my advice is buy it in cash. Your bargaining chip is that you CAN buy it in cash, if they give you a GOOD offer, counteroffer the rate they gave you cut in half with an additional 20k down. See where they go with it, and move your downpayment accordingly.