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BMW FS - Approval odds?

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BMW FS - Approval odds?

Looking to finance a 2018 CPO 5-series that’s $56,000.

Down payment: $4,000
Trade in: $14,000

With taxes, I’d likely need to finance $40,000 for 60 or 72 months.

Credit score: 750
Debts:
Student loans $800/mo
Auto loan 1: $480/mo (keeping this)
CC: $0
Mortgage: $0

Income $140,000 base, $20-25,000 annual bonus

Wife works but I’m trying to keep her off this. Thanks!
Message 1 of 26
25 REPLIES 25
Frequent Contributor

Re: BMW FS - Approval odds?

Congrats on that score, have you checked your FICO Autoloan score. If it is in the same threshold as your 750 (i'm assuming this is your fico 8 score) then you should be approved and at a good interest rate. 56k is not a major car loan. 

 

Side note: With those scores have you considered a lease of the same model, you'll get a new one every two years and maintenence is covered.

FICOs: EQ - 731 / TU - 737 / EX - 727
Garden: 6/1/19 / U 6%
Profile: Aaoa - 4.6y / Aooa - 13y / Aoya - 1m
Wallet:
"An investment in knowledge pays the best interest." - BF
Message 2 of 26
Regular Contributor

Re: BMW FS - Approval odds?

Leasing means he loses his $18k investment. Who would do that?
Message 3 of 26
Frequent Contributor

Re: BMW FS - Approval odds?

Well with a lease, depending on the terms, there would be nothing down, or he could do whatever small amount he wanted. Certainly putting down less than 4k, and as for the trade in, I would sell it and keep the money. Thats what I would do, but I wasn't telling him to do it, I just offered the idea. 

 

I own two vehicles, and will be leasing another higher end vehicle soon. I enjoy leasing really nice vehicles because I can trade them in for a fresh one after 2 years or earlier if I like. The vehicles I own are customized and hold value well. I personally don't see the point in purchasing new (used is better) vehicles that degrade within minutes of leaving the lot. If you don't own a vehicle then I understand. If it is a classic or special edition, I understand. If it's something you absolutely cannot live without, I understand

 

However, once that vehicle reaches a point where your warranty is invalid and things start falling apart, most are ready to trade it in. In lower end vehicles, you can easily fix them at a low cost. When you're driving a mercedes, bmw, audi, or some other luxury car, those cost can skyrocket. They also don't hold value well, so you may be upside down when you are prepared to turn it in. Theres a lot of money and value lost in the purchase of a luxury car and IMPO, they're not worth it. 

 

Lease a model you like, turn it in, upgrade or lease the same newly released model, rinse and repeat. 

FICOs: EQ - 731 / TU - 737 / EX - 727
Garden: 6/1/19 / U 6%
Profile: Aaoa - 4.6y / Aooa - 13y / Aoya - 1m
Wallet:
"An investment in knowledge pays the best interest." - BF
Message 4 of 26
Regular Contributor

Re: BMW FS - Approval odds?

I comipletely hear you and understand where you are coming from.  but reasons not to lease:

 

1.  Payments forever..some people don't like those.

 

2.  Some people drive too much.

 

3. If you do a 3 year buy (financial resources available), you will always be better off than a 3 year lease...period...you can sell it and be better off.

Message 5 of 26
Frequent Contributor

Re: BMW FS - Approval odds?


@navyitaly wrote:

I comipletely hear you and understand where you are coming from.  but reasons not to lease:

Thank you, I'm glad we can have a discussion and not an arguement

 

1.  Payments forever..some people don't like those.

I understand this, but he has payments now, and when he trades it in, he will have payments again. I think its safe to say this is the normal rotation, buy, trade, buy, etc. So payments forever anyway. You can end the lease whenever you want. I also stated that if you don't own a vehicle already, it would be wiser to purchase one. I lease because I own two vehicles so I can afford the payments while driving a new car every 1 year.. 2 years.. or 3.. or however long I decide to pay them (also the payments are easier to adjust)

2.  Some people drive too much.

 I own two other vehicles, I don't drive my lease everyday

3. If you do a 3 year buy (financial resources available), you will always be better off than a 3 year lease...period...you can sell it and be better off.

Most wont be doing a 3 year buy on a 2018 BMW, but I hear you. The average purchase is 25-30k at 5-6 years. Thats around 550, in that time a vehicle loses tremendous value, and not many warranties last that long. However yes a 3 year purchase is good, if this is a vehicle you're keeping and not trading back in, otherwise you've lost a lot of money.

 

All valid points, its just a suggestion either way. One will ultimately do what is best for them, however I don't recommend looking down on leases, because they can serve a good purpose as they have for me. 

 

Like I said, I just enjoy having a brand new car every single time I turn my lease in. They cover all repairs except for tires and glass.

 

I am not anti purchase. I just don't suggest one purchase a vehicle every single time they tire of another. Purchase a car you can live with so the value becomes invaluable (to you). Instead of something that will rag out in a few years, still have money owed, and puts you upside down when you turn it in. Again, this was never directed for him to do, just for him to think about. 

FICOs: EQ - 731 / TU - 737 / EX - 727
Garden: 6/1/19 / U 6%
Profile: Aaoa - 4.6y / Aooa - 13y / Aoya - 1m
Wallet:
"An investment in knowledge pays the best interest." - BF
Message 6 of 26

Re: BMW FS - Approval odds?

does BMW financial services follow the Fico Autoloan Score? My Fico 8 was around 620 but Fico Autoloan was 681. 

Message 7 of 26
Frequent Contributor

Re: BMW FS - Approval odds?


@wanderlustmd wrote:

does BMW financial services follow the Fico Autoloan Score? My Fico 8 was around 620 but Fico Autoloan was 681. 


Give them a call, most lenders will gladly tell you

FICOs: EQ - 731 / TU - 737 / EX - 727
Garden: 6/1/19 / U 6%
Profile: Aaoa - 4.6y / Aooa - 13y / Aoya - 1m
Wallet:
"An investment in knowledge pays the best interest." - BF
Message 8 of 26
New Visitor

Re: BMW FS - Approval odds?

Why wouldn't he do that?  If you did a straight out purchase you would lose your 18k investment and in actuality leasing is far wiser.  Vehicles depreciate as soon as they are driven off the lot and to be short when leasing your payments are based off the depreciation of the vehicle as opposed to financing the total for a set term.  50k minus 18k financed over a 5 year period (purchase) or 50k depreciation, 25k over a 3 year period is an example of what you would paying on and at the end of the lease term you still have the option to purchase the vehicle for the balance that's left the same as if you had did a standard 3, 4, 5, 6 year term loan with no added fees etc..   If leasing was so bad then everyone would qualify for one

Message 9 of 26
Regular Contributor

Re: BMW FS - Approval odds?

You don’t just pay interest on the depreciation. You have to pay it on the remainder of car as well. Do you know leading formula?
Message 10 of 26
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