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Auto Loan Approval Chances

New Member

Auto Loan Approval Chances

Hello myFICO Community,

 

I am new to this forum; I have been reading around and have only seen positive attitude to helping others! 

 

I am in the market for a used car within the next 6-8 months, a relatively new "credit" user; and wanted to understand more. 

 

Credit Score: Estimating 750+

 

Income: 66K Gross

Lenght of Employment:  Current Position, Less than 1 year | Government Position

Previous Loan Experience: None

Debt-to-Income (DTI): 0%

Year of Car: 2016

Miles: 10,000-20,000

Price: $100,000

Purchase/Refinance:   Purchase CPO, from dealer

Requested loan term (XX Months): 60-72

Down payment amount: $15,000 | Seperate from Sales Tax, Doc Fees, ETC

 

Other: As previously stated, I am a relatively new credit user. I have had the luxury of being an authorized user for more than 7 credit cards since a young age. The accounts are tenured (0-6 years old) and have low credit utilization, and 0 dereogatory remarks. My combined credit limit including authorized accounts is about 125K. Although, practically none of it "personal". 

 

I am also lucky enough to live in family owned real-estate. 

 

I expect my DTI to max out at 30% for the duration of the loan as no other debts need to be incurred. No mortgage, no dependents. 

 

Simple math figures approximately $1,200-1,600 depending on term an interest. 

---

 

Yes, this car is worth 140% of my gross income. But with DTI solely accumulated by this car loan at approximately 23%-30% depending on term, this is lower than most of America. 

 

Are there any lenders out there that can achieve something of such unruly porportions? 

 

Any advice is greatly appreciated! As a rock is in comparison to a snowflake, I am the former; give it to me! 

 

Thanks again in advance!

 

Sincere Regards,

Credit_Adventurer

Message 1 of 13
12 REPLIES
Regular Contributor

Re: Auto Loan Approval Chances

Just don't.

But if you must then do yourelf a favor and for a minimum of 5 months put that $1,500 a month payment (estimated 6% 72 months 90K Loan) into a savings account.  If you can do that for 3 months and never think of touching that money then it's a good start.

 

But seriously who are you trying to impress with a $100K car?

 

What are your short/long term goals?

 

Are you looking to get married, buy a house, go on nice vacations?

 

I am 50 and a car guy and just bought a CPO Audi A3 for well under $30K 13K Miles 4 years unlimited miles warranty.  No it's not the Z06 Convertible that I want but I am being realistic.  That car will come in 3.5 years if I still want it when I am done with alimony, done paying college tuition for my daughter and her car is paid off.

 

The biggest mistake I have made in life was car after car after car.  Had I been smart I would have bought a small condo then upgraded and upgraded and been living in a **bleep** nice house now.

 

Just because you can get away with it doesn't mean you should.

Message 2 of 13
Regular Contributor

Re: Auto Loan Approval Chances

What car is this? Just curious...over $100,000 for a 2016 when you're quite literally just starting out in life and have not had to manage credit on your own is risky.  This is of course the mother, life, and credit experience in me talking.  

 

You are basing your figures, again risky to push yourself that far, on a house of cards.  You've had your current position of employment for a year, that's hardly enough time to max out your income on a car payment, because as many of us here know, no employment is guaranteed especially if you're "new."  Secondly, with an expensive car comes expensive repairs.  I own an expensive car, an oil change is $500 and a transmission flush is $1200...tires, brakes, insurance...you must include these things in your monthly auto expenses to care for this vehicle.  Thirdly, the need to make a 70 month loan for this price tag is a clear sign that the stars have not yet quite aligned for this purchase.  

 

Lastly, please consider the unexpected.  "Family real estate" is wonderful, but that is at the mercy of someone else's circumstances...you could also, unfortunately, be unexpectedly injured rendering you unable to work...etc. etc. etc. 

 

My suggestion to you, and of course this is your life haha, would be to focus on using and building your OWN credit.  Give that a shot, establish your new position of employment, build a savings with the payments as Cobra said.  You're in a great position to START your credit and life journey...too many times has something as "simple" as a dream vehicle taking all that away in an instant for someone. 

Present Day...Equifax: 692, TransUnion: 710, Experian: 714
Sept. 2016...Equifax: 652, TransUnion: 608, Experian: 597
PenFed CLOC: $500
Message 3 of 13
New Member

Re: Auto Loan Approval Chances

Hello SaraJo and NjCobra,

 

I wanted to sincerely thank you for your reponses, you spent the time for someone and shared your knowledge!

---

NjCobra,

 

Not with the intention of buying a car but when I started working a couple of years ago full time-hourly, only spent close to $120 dollars a month of what I made; no extravagant purchases, just the occasionial bite to eat and movie. I have a substantial amount of assets in a Stock Trust that has nearly doubled (and which I won't be touching for this purchase). In addition to multiple additional accounts. 

 

In the short term, I plan to move up within my job. As soon as I am eligible I will transfer over to a position (in 3 years) that makes $100,000. 

 

In the long term (think 7 years), I plan to invest 50/50 in a franchise with my parents. Keep in mind that even though the car expentiture will be in the $1,700s monthly (figure insurance, gas, wear items), I will still be saving more than 1,500 monthly and living conservatively.

 

No plans for marrige in the next (10-12 years), not until after I am fully settled with my job and investments. I am not one to vacation and the field is not very family friendly. 

---

Sarah, 

 

The car was tentatatively going to be the Mercedes S600X, should I not be beaten into submission prior (only in good humor Smiley Very Happy

 

---

Even though I am re-thinking things; is something like this even possible with a lender? Will I even stand a chance to be approved by anyone considering income, DTI and previous expirience? Even if I am, should I expect ridiculous interest rates? 

 

Thank You Again!

 

Sincere Regards,

Credit_Adventurer

Message 4 of 13
Regular Contributor

Re: Auto Loan Approval Chances


@Credit_Adventurer wrote:

Hello SaraJo and NjCobra,

 

I wanted to sincerely thank you for your reponses, you spent the time for someone and shared your knowledge!

---

NjCobra,

 

Not with the intention of buying a car but when I started working a couple of years ago full time-hourly, only spent close to $120 dollars a month of what I made; no extravagant purchases, just the occasionial bite to eat and movie. I have a substantial amount of assets in a Stock Trust that has nearly doubled (and which I won't be touching for this purchase). In addition to multiple additional accounts. 

 

In the short term, I plan to move up within my job. As soon as I am eligible I will transfer over to a position (in 3 years) that makes $100,000. 

 

In the long term (think 7 years), I plan to invest 50/50 in a franchise with my parents. Keep in mind that even though the car expentiture will be in the $1,700s monthly (figure insurance, gas, wear items), I will still be saving more than 1,500 monthly and living conservatively.

 

No plans for marrige in the next (10-12 years), not until after I am fully settled with my job and investments. I am not one to vacation and the field is not very family friendly. 

---

Sarah, 

 

The car was tentatatively going to be the Mercedes S600X, should I not be beaten into submission prior (only in good humor Smiley Very Happy

 

---

Even though I am re-thinking things; is something like this even possible with a lender? Will I even stand a chance to be approved by anyone considering income, DTI and previous expirience? Even if I am, should I expect ridiculous interest rates? 

 

Thank You Again!

 

Sincere Regards,

Credit_Adventurer


Haha! A mother's words ay!? You're so sweet, why do I feel like I'm watching the plot of a Hallmark Christmas movie where the fellow has no intention of getting married and then BAM! There she is, THE ONE! 

 

That vehicle is a gem, do you have a chaffeur or will you just be driving yourself around? I was at the NYC Auto Show the first year the Maybach came out, quite the tank! The door umbrella is completely underrated (not being snarky, I wish I had one).

 

So, back to business, you "estimate your score is 750's," what's your "non-estimated" score?  Also, you're making 66K GROSS, and I'm assuming a "single male" status, have you filed taxes with your current position yet and included that with your mathematics?  I'm assuming not since your employment term has been less than a year.  I'm not meaning to rain on your parade, but sweetie dahling I would wait until you sneeze your annual income on a monthly basis and then by all means, make her yours. 

 

 

 

Present Day...Equifax: 692, TransUnion: 710, Experian: 714
Sept. 2016...Equifax: 652, TransUnion: 608, Experian: 597
PenFed CLOC: $500
Message 5 of 13
New Member

Re: Auto Loan Approval Chances

Hello Miss SarahJo,

 

Haha, the only payment my chaffeur will be getting (and which I will be affording with the payment) is the luxury to drive such a vehicle (good thing the guy I have in mind is my-self).  

 

Call me a loner or a loaner in this case (more bad jokes)  I seriously don't want to stick my neck out to get tangled in the concertina wire to which a modern relationship can be. The last thing I will want is to be choked by fiances finances when I do find the right person. 

 

My credit score for TU is 748, I am sure the others will be higher as TU has been known to be stingy. I will be making 45K post-taxes, the city pays my pension and has amazing health benefits. 

 

It unfourtunately is the case that I will never be making 66K per month, unless I magically become the CEO of a hospital: https://transparentcalifornia.com/salaries/2017/washington-hospital-heathcare-system/nancy-farber/

 

If (but for the purposes of this forum, never) one would hypotheically walk into a finance office, with the same hypotheical numbers. Is it reasonable for that hypotheical person to expect to be approved for financing? 

 

Message 6 of 13
Frequent Contributor

Re: Auto Loan Approval Chances

I think you will have a hard time getting approved for a few reason's listed below:

 

1) Although your DTI will look fine, lender's do not soley rely on DTI...PTI in many cases can be much more important. Most of your lender's will typically have PTI Limits set anywhere between 12-18% (most limit it at 15%, some bank's like US Bank will go up to 18% for tier 2+ credit)

 

Your PTI will be (at best) somewhere around 23-25% which is too high per most lender's underwriting guidelines.

 

2) Another issue you will encounter is you have no comparable credit, you've never borrowed that kind of money, especially on a depreciating asset. It also seem's from your posts, that most of your credit is in the form of AU accounts. I have seen people who make 100k+ a year with 700+ scores get declined for a 35k auto loan because they don't have any comparable installment credit.

 

 

My advice would be reach out to a local bank or credit union and build a relationship with them. Your large captive lender's aren't concerned with your story, back ground, education, and although you sound like you have your stuff together, they're buying deal's based on the paper (Credit bureau, LTV, PTI, DTI, etc) not your story. This is where a "relationship" lender such as a local bank or CU will come in handy, because the underwriter will take more thing's into consideration than just the hard facts.

 

Good luck to you, and I hope all work's out for you!

AMEX BCE ($39,500) CITI AAdvantage ($20,500) Region's Platinum Card ($14,400) Discover IT ($23,000) Macy's ($7,000) Chase FU ($10,000) Barclay's Aviator ($22,000) TU:778 EX: 781 EQ:791
Message 7 of 13
New Member

Re: Auto Loan Approval Chances

 


@SEMO wrote:

I think you will have a hard time getting approved for a few reason's listed below:

 

1) Although your DTI will look fine, lender's do not soley rely on DTI...PTI in many cases can be much more important. Most of your lender's will typically have PTI Limits set anywhere between 12-18% (most limit it at 15%, some bank's like US Bank will go up to 18% for tier 2+ credit)

 

Your PTI will be (at best) somewhere around 23-25% which is too high per most lender's underwriting guidelines.

 

2) Another issue you will encounter is you have no comparable credit, you've never borrowed that kind of money, especially on a depreciating asset. It also seem's from your posts, that most of your credit is in the form of AU accounts. I have seen people who make 100k+ a year with 700+ scores get declined for a 35k auto loan because they don't have any comparable installment credit.

 

 

My advice would be reach out to a local bank or credit union and build a relationship with them. Your large captive lender's aren't concerned with your story, back ground, education, and although you sound like you have your stuff together, they're buying deal's based on the paper (Credit bureau, LTV, PTI, DTI, etc) not your story. This is where a "relationship" lender such as a local bank or CU will come in handy, because the underwriter will take more thing's into consideration than just the hard facts.

 

Good luck to you, and I hope all work's out for you!


Hello Sir,

 

Thank you very much for your answer! That was very informative. 

 

After doing some research, it appears that the PTI limit is a major problem in my scenario. Being that as you said, the PTI will be 25-30%.

 

Being that I have no monthly expenses and nearly 99% disposible income, will lenders see that other numbers compensate for each other?

 

For Example:

Auto Loan Amount: 220,000

Gross Income: 250,000

Term: 72 Months

APR: 5%

DTI With Loan: 50%

PTI With Loan: 8%

 

Obviously in the situation above, the PTI is very low but the DTI is border-line "broke" for that individual. In my situation, however, the PTI may be very high but the numbers may "look" normal given no circumstances and types. 

 

 

So my question is, are PTI ratios set in stone for most lenders, creating a black and white approval basis. Or are PTIs one of the many factors when an underwriter is considering a loan.

 

Thank You!

Sincere Regards

Message 8 of 13
Valued Contributor

Re: Auto Loan Approval Chances

Chances are slim to none... with no previous installments close to $50-60k you won’t qualify.

Coming from someone who wanted to do what you did, trust me save yourself the inquiry’s, they want to see previous loans that high.
Message 9 of 13
Valued Contributor

Re: Auto Loan Approval Chances

6CC0D606-A906-4A1B-A850-49D72A0DF428.jpeg

 

B0719840-B175-462C-B07F-679694F6FED2.jpeg

 

This is now my 2018 991.2 Smiley Happy! Bought it new but I drive a lot :/ so the miles are  high 

 

start small, then go high! 

Message 10 of 13