Auto loan question

[Anonymous]

I'm looking to get an auto loan pre-approval. I had looked for one in July but didn't buy the car as I went with building the car instead and the pre-approval expired sooner. Initially, got approved by NFCU for 60,000. Now that my car is due for delivery in roughly 2 weeks and I'm looking to get another pre-approval. I would like to ask if I should be able to obtain the loan with the data I'm including below. If I were to apply with NFCU again, do you think they might approve me again?

Thanks and appreciate any insight.

Credit Score: Equifax 08: 673, Experian 08: 671, Transunion 08: 675

AAoA: 3 years 3 months

# of positive trade lines: 12

# of negative trade lines: 1 charged-off that will fall off next year.

Income: 84K annually

Lenght of Employment: 13 years

Previous Loan Experience: Had 2 car loans, the first one, 2006-2012, had Repo but off the report and late payments 60,90 days. The 2nd car loan, 2014 - July 2017 had a flawless record with no lates until I got into a totaled accident where the insurance paid the rest of the loan balance.

Current Utilities: 14%

Debt-to-Income (DTI): 8-9 %

Inquiries: 8-9

Year of Car: 2018

Miles: 0

Purchase/Refinance: 59,500 / Purchase

Requested loan term (XX Months): 72 - 84 months

Down payment amount: 3,000

Co-borrower/Co-Signer: none

Other: My credit score might rise by 20-25 points across the board in a few days as I did the Alliant CU SSL technique to boost the scores as I went without an installment loan for a few months and scores dropped.

[sccredit]

Whats the difference in your reports and scores now vs your last preapproval with NFCU?

[Anonymous]

The biggest difference is the credit score. When I applied back in July my scores at that time were:

Ex: 681

Eq: 680

Tu: 691

Inquiries: 5-6

Obviously, the scores dropped was from the auto loan being dropped from the report. My scores are lower now so it makes me feel nervous to apply and get rejected. Thanks.

[sccredit]

IMO you'll be fine

[Anonymous]

a 60k car on 84k income is going to wreak havoc on your DTI

buying a car that you can only afford by going 72-84 months is generally a very bad idea

[Anonymous]

If you get turned down you will look back on it in a year or two and consider it a blessing. A 60K car loan? even if you make twice your salary it would be too much car debt. 10% of take home pay for no more than 48 months is the usual safe guideline. 

[Anonymous]

If you get turned down you will look back on it in a year or two and consider it a blessing. A 60K car loan? even if you make twice your salary it would be too much car debt. 10% of take home pay for no more than 48 months is the usual safe guidline. 

[Anonymous]

SteelerNYC & mursemanit,

I appreciate your insight and advise. I agree for that amount of a loan for is large for my credit profile. I may have left out some information since I was asking for suggestions for the loan approval itself. I don't pay rent as I'm still staying with my parents so the my current DTI (8-9%) and post loan creation DTI (30-35%) will still put me in a comfort space. 

If I was paying my own rent or mortgage which is the biggest spending factor, I wouldn't dare to go ever pass 30K loan. 

[Anonymous]

If you're young and dream of being wealthy, you can literally become a millionaire quicker by avoiding auto loans than by almost any other method.  I'm in my early 40s and fully retired and I got there by avoiding auto loans after my early 20s.

If you get a "really cool fast hot car" at age 25 and get a loan for $50,000 at 5% over 72 months to pay for it, you will pay about $57,000 total for that car -- not too bad.  But if you drive a $2500 beater instead and invest that $944 payment every month for 72 months in stocks that return 7% on average, at the end of 72 months you'll have $84,000 in investments.  Keep buying $2500 beaters instead of fancy hot cars and keep making a $944 "car payment" to your stock portfolio.

After 12 years, you'll have $212,000.  After 18 years you'll have $407,000.  24 years = $703,000.  30 years = $1.2 million.

That's just avoiding driving a fancy car and sticking with a beater.

The guy who drives a fancy car all 30 years is left with trade-in value at the end of it.  The guy who drove a beater has over a million by age 50.

[Anonymous]

@ABCD2199

Now, sir, you are throwing me off my feet with that advise. There's no better stretegic financial planning than that. I will keep your wise words in mind. My retirement score is Good, but the retirement age is nowhere near yours. 

Hmm.......