BIG DOWN PAYMENT > NO CREDIT

Anonymous · ‎03-18-2018

I want to buy a BMW for $49,000.... My credit consist of $2000 secured credit card, that's been open for 90 days - and a $300 secured credit card. And my grandma has me under her credit card which reflects on my credit report under her $25,000 credit card with Cap One 10 years old, low balance - perfect history.

However, at this point I know my credit alone will not qualify me for this car. But I have $9,600 cash for a downpayment, I make $3,600 per month before taxes, have proof to show this.

What's my chances?

redE2move · ‎03-18-2018

How do you know that you don't qualify? What are your baddies (if any) and auto scores? You shouldn't unknowlingly give up $9600 when it would only cost you $60 to see if you do qualify.

Anonymous · ‎03-18-2018

I have 1 baddie from Midland Funding for credit ONe bank... which was an indentity theft case, I got Credit one removed... but they won't budge, these suckers will not give in. I even offered to pay the $797 to solve it and remove. But they said NO! However, I thought I wouldn't qualify because I don't have any car credit.

redE2move · ‎03-18-2018

You may not be in as bad of shape as you think you are. Please consider ordering your scores. Walking in with the knowledge of how well you qualify makes ALL the difference. Also, do you belong to a credit union? If not, I would HIGHLY recommend joining one. I belong to 3 NFCU (8mos), Coastal FCU(1yr) and PenFed (as of 5 days ago). I ended up refinancing my car with Coastal but because I knew my scores in advance, I knew where to apply for the best rate possible. I ended up with a 3.69% rate, down from 13.96%. If you pull your scores its easier to know where to search. If you go with your average dealership, they can shop you around to several lenders and you don't necessarily want that to happen if you can avoid it. My loan officer says that if your UTL is 30% or lower with scores in the mid 600s, decent income and not much in monthly expenses the odds are likely in your favor. I listened to her last year when she shared this with me and got prepared this year so I would be guaranteed a great rate.

LexxiStarr · ‎03-18-2018

How old is your baddie? Midland's new policy is to delete the negative from your report once it's paid depending on DOFD.

DeeBee78 · ‎03-19-2018

If you're planning on financing through BMWFS, a test drive can get you a preapproval with them. You can then call them and see exactly how much you were preapproved for, and at what rate. I would still recommend you obtain your actual credit scores from a legitimate credit reporting product (not CreditKarma, CreditSesame, Capital One CreditWise, etc.)

Last year I test drove an X5 and two weeks later had a preapproval letter in the mail from them. They can find your credit file based on your name and address, which they get from your driver's license.

Anonymous · ‎03-19-2018

You don't make enough money for a 50K car. Bottom line. Not even close. You can do it, but itd be financially foolish. I would recommend you focus a little more on building and investing in appreciating assets rather that ones that are decreasing and will eventually be worth nothing. Your down payment doesnt change the equation at all. All that tells me is that youre throwing 10 grand down and will still end up being car poor.

DeeBee78 · ‎03-19-2018

@Anonymouswrote:
You don't make enough money for a 50K car. Bottom line. Not even close. You can do it, but itd be financially foolish. I would recommend you focus a little more on building and investing in appreciating assets rather that ones that are decreasing and will eventually be worth nothing. Your down payment doesnt change the equation at all. All that tells me is that youre throwing 10 grand down and will still end up being car poor.

While I agree that OP is taking on a considerable debt financing roughtly $45K (after taxes, registration, fees, etc.) on a $43K income, they may not have other expenses that eat into their DTI ratio, giving them the funds to acquire a nice car. It's not really our place to question someone's choice in automobile, but to offer them advice for the question they've asked.

A $45K loan at 5% APR over 6 months is $849 a month, roughly, bringing OP to 24% DTI. Still within a healthy ratio.

If the OP had said that they had considerable credit card debts, student loans, and a mortgage or rent payment, then yeah, obviously they wouldn't be wise (or most likely approved) to take a loan out at this amount. But OP mentioned none of those things.