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Car buying

micvite
Regular Contributor

Car buying

I'm looking to buy a new car (approx 130k loan) around September or October of this year, I currently have 11 ccs with 15k SL total and a bit of auto loan history though oldest acc is 6 years AAoC is 2 years. I'm looking to also apply for some new credit cards, for myself and especially my wife (only has 3 ccs one which is a store card for herself 7.5k total SL). I would like to have her on the loan as well to start building her auto history, but I'm concerned that applying for cards for myself and her might impact the car buying process. Thoughts? 

 

Income is at 25k a month (hers is 0)

Her credit scores are ex 750, tu 740 eq 740 so a bit better than mine and should go up when her one cc updates. She's also an AU on all of my ccs as well. The car I'm looking to buy is a BMW so anyone with BMW financial experience please let me know if new apps are going to affect anything. (Already have a bunch of inquiries from buying 3 cars this year and shopping around 32 on TU, 16 eq 21 ex, with around 6-10 dropping off by October this year from each beureau)

 

Thanks!

Ex: 742, TU: 726, EQ: 733 03/31/2021
Discover it cashback: $4400
Citi DC: $4000
WF Propel: $2000
Amex BCED: $1000
Amex Gold: $2000
Cap1 QS: $1200
VS CC: $850
Kohls: $700
Synchrony car care: $800
12 REPLIES 12
CreditorApproved
New Contributor

Re: Car buying

Hold up. I don't mean to be intrusive but 25k a month is 300k a year. So is 300k by the end of 2021 a guarantee? You seem to be going 1000 mph into car purchases like you sold a billion dollar company. Also why are you calculating per month? Is this high income very recent to you? My fear is you didn't get the chance to slow down and take a breath. If so BREATHE. Wait a year making this income, then make your purchase. I'm assuming a lot of things here so don't get offended, regardless great job on your income. I'm a luxury car fanatic too. 

Creditor Approved Website - Application Experiences Needed! See Your Chances of Approval.

Credit Cards from Oldest:
Chase Freedom Unlimited $3,000 CL
Discover It $2,400 CL
BofA Cash Rewards $1,300 CL
Apple Card $1,500 CL
Chase Freedom Flex $3,200 CL
758 FICO 733 TransUnion
$11,800 CL - $20,000 income (ECE Student)
2 Years of Credit
Message 2 of 13
4sallypat
Frequent Contributor

Re: Car buying


@CreditorApproved wrote:

Hold up. I don't mean to be intrusive but 25k a month is 300k a year. So is 300k by the end of 2021 a guarantee? You seem to be going 1000 mph into car purchases like you sold a billion dollar company. Also why are you calculating per month? Is this high income very recent to you? My fear is you didn't get the chance to slow down and take a breath. If so BREATHE. Wait a year making this income, then make your purchase. I'm assuming a lot of things here so don't get offended, regardless great job on your income. I'm a luxury car fanatic too. 


Whoa - as @CreditorApproved  said, take a breather...

 

Your spree for card apps and car loans is not a good sign to creditors.

 

If you only have 15K CL on your cards, you may want to slow down the app process as trying to get tons of credit quickly will turn sour.

 

If you really need an luxury car, rent one for a couple of months and then decide if you want to purchase it.

 

Remember, luxury cars have the largest depreciation over time!

 

I know - I used to buy expensive German and UK cars...

Message 3 of 13
aj2121
Regular Contributor

Re: Car buying

From past experience, I have found auto lenders to be more lenient than credit card companies in issuing approvals with more inquiries and recent accounts. That being said, adding a 4th auto loan may throw red flags to lenders, especially if the balance of this loan is significantly higher than others. Auto approvals are going to take into account your previous auto experience more heavily, so details on your current auto loans could be helpful in better predicting your future approval odds (metrics like date opened, starting balance, current balance, monthly payments) if you would like to share.

 

As @4sallypat mentioned, luxury cars have a big depreciation factor to consider. BMW has some good lease programs which may be something you want to consider. When considering new vehicle purchases in a multi-car family, leases can make a lot of sense.

 

EDIT: Since you are looking to add new revolcing accounts, I do recommend requesting CLIs on all of your cards that allow for soft pulls for CLI, this should help you get higher starting limits on future cards.

FICO8 as of 4/9/21:
Message 4 of 13
micvite
Regular Contributor

Re: Car buying

@CreditorApproved I tend to calculate monthly just for expense purposes and the fact that my income changes from month to month anywhere from 20-40k so I say 25k as a safe average (I'm self employed, I get paid depending how motivated I feel that day). It's not particularly recent, it's been a bit over a year so far and has proven steady.

 

To clarify @aj2121 and @4sallypat I don't own multiple cars, this would be my only car, the previous car loans have been paid off and vehicle sold or refinanced with my name off the loan. The only loans I currently have open are 2 synchrony motorcycle loans for 7k each (June 2019 155 a month and June 2020 177 a month) and 2 studentoans totaling 6k as well as my current car loan that has 4k remaining on it and will be paid off by the time I decide to purchase a new vehicle (31k loan started may 2020 581 a month 63 mo term) had another 31k loan jan 2020 paid off April 2020 before that and another 35k loan in june 2017 paid off in jan 2019 (30 days late jan 2018 due to my ex not depositing cash into my bank account to cover the payment while I was in Europe, which I'm going to attempt to goodwill off before the big purchase) 

 

Unfortunately a lease wouldn't work as I tend to drive many many miles per year so the overmileage charges would be unbearable at the end of the lease. This new car I'd plan to keep pretty much forever and slowly add to my collection so depreciation isn't a huge concern either. Sorry for any confusion about the auto loans previously mentioned. I was just trying to state I had some auto history.

 

Of course I know lots of inquiries and new accounts looks bad, but at the same time, I did pay these auto loans off fairly quickly, and don't have any overly new credit cards (newest is a little over a year at this point, oldest are my 3 from mid 2017, yeah I'm new to this... I'm only 23)

Ex: 742, TU: 726, EQ: 733 03/31/2021
Discover it cashback: $4400
Citi DC: $4000
WF Propel: $2000
Amex BCED: $1000
Amex Gold: $2000
Cap1 QS: $1200
VS CC: $850
Kohls: $700
Synchrony car care: $800
Message 5 of 13
CreditorApproved
New Contributor

Re: Car buying

If that's going to be the only car with payments  I'd say sure. No harm in celebrating your great success. My only worry is if things went back to how they were over a year ago would it become a burden to you and put you back in the same place as you started. I'd save and  invest just to not end up average/broke again. Just a suggestion, but if that car is the reason you broke your ass then get it as a trophy and a realization that what you achieved was all worth it. 
I'm a student and a bit of an entrepreneur myself. I understand if you want to keep it private, but what do you do? I'm curious. 🧐 

Creditor Approved Website - Application Experiences Needed! See Your Chances of Approval.

Credit Cards from Oldest:
Chase Freedom Unlimited $3,000 CL
Discover It $2,400 CL
BofA Cash Rewards $1,300 CL
Apple Card $1,500 CL
Chase Freedom Flex $3,200 CL
758 FICO 733 TransUnion
$11,800 CL - $20,000 income (ECE Student)
2 Years of Credit
Message 6 of 13
micvite
Regular Contributor

Re: Car buying

@CreditorApproved Yeah only car payment, I'm just curious if any new accounts would cause them to want to steer clear of me... the issue is me and especially my wife don't have a very thick file so I'm trying to work on that, but don't want to open new accounts if that might cause them to not want to lend me the money for the car. Things shouldn't go back, but even if they did, I'd still be able to afford the car, just not nearly as comfortably (was making average 7k a month before). The problem with me is I grew up in a very wealthy family/environment, so I enjoy having nice things, and I grew up with the mentality of "you can afford anything you want, you just have to work harder" so I end up spending all of my money pretty much every month because if I want to afford more I just need to work more. It's never been about breaking my ass, its just about how much I want to enjoy my life. Don't feel like spending almost 10k a month on restaurants? Don't need to work as hard etc. But to sum up what I do, I have my own auto repair business with my partner, where basically I invest all the money and a bit of my time and knowledge and he executes most of the work. It's how I end up making close to 1k a day and why I tend to quantify my income on a per month basis since it can vary greatly over a 1 year period. Where do your entrepreneurial skills take you?

Ex: 742, TU: 726, EQ: 733 03/31/2021
Discover it cashback: $4400
Citi DC: $4000
WF Propel: $2000
Amex BCED: $1000
Amex Gold: $2000
Cap1 QS: $1200
VS CC: $850
Kohls: $700
Synchrony car care: $800
Message 7 of 13
aj2121
Regular Contributor

Re: Car buying

@micvite Thanks for the additional clarification. Unfortunately, I cannot definitevely say one way or another if the number of inquiries would prevent you from getting an approval or not. I was an internet manager at a dealership for a little over a year, while I didn't work directly with finance I sat in on many management meetings discussing loan approvals and getting loans approved. With that being said, I believe the biggest factor that would hurt you is credit age. Lenders like to see established payment history, especially when the amount financed is large. I think it is very possible that you would be approved but only for a portion of the full value. Many of the lenders we worked with considered 6 auto loans on your credit report to be a thick file and were often more lenient with those borrowers. Borrowers with limited age and few accounts often had one or more factors of the loan that were conditional to approval such as loan term, loan amount, payment amount, increased interest rate, security deposit(s), etc.

FICO8 as of 4/9/21:
Message 8 of 13
Loquat
Moderator

Re: Car buying

@micvite With the right down payment and proof of income if requested, and if you're being straight about situation here, I don't think inquiries, no matter how many,

would stop you from being approved.  

Auto loans are easy.  You may not get an instant approval online but that's where a really good finance manager can get a deal done that often you can't get done yourself.  

I have a similar mentality as it relates to buying things I want.  Unlike yourself, I didn't come from a wealthy family and was always the person "window shopping".  I hated every part of it.  Like you I started working really hard so I never had to tell myself "no" again.  I was making good money and spending even faster.   I made some foolish decisions and landed myself in the need of a BK13 to get some financial relief.   

I learned a lot from that experience but one thing it didn't do was cause my to limit myself...I just go about it in a much smarter way now.  

I'm a firm believer in bringing one's income up to the level of the lifestyle they want to live instead of downsizing my wants and desires for the money I'm currently making. 

Message 9 of 13
micvite
Regular Contributor

Re: Car buying

@Loquat Haha, indeed, I grew up rich, then turned poor after some poor life choices (ex gf basically spend all the money I had after leaving home) has to tell myself no a few times and decided never again. The reason I was concerned about inquiries and more so about new accounts was the fact that I know lenders (at least in my experience) frown upon what they call "seeking credit" for example just got denied for a CLI on my discover card due to too many inquiries and average age of accounts. But that could just be the autobot just looking at numbers instead of a human actually looking at the fact that I was auto loan shopping so who knows. Ideally I want to get a few more CCs this car loan and then chill out for the next 5-6 years to get my credit age up. (Just realized I'm buying a house next year so after that I can finally relax). I'm just not sure what to do with my wife's credit profile having only 2 ccs and a store card (and 5 of my ccs she's an AU on.) Was going to try a credit builder loan, but they want proof of income which she doesn't have... (guess I'll put her on payroll for my company next month lol). I'm going to see if I can get her as a cosigner on the auto loan to build up some auto history for her and maybe she can carry me a bit since her scores are higher even with a limited profile (she has high 700s) 

Ex: 742, TU: 726, EQ: 733 03/31/2021
Discover it cashback: $4400
Citi DC: $4000
WF Propel: $2000
Amex BCED: $1000
Amex Gold: $2000
Cap1 QS: $1200
VS CC: $850
Kohls: $700
Synchrony car care: $800
Message 10 of 13
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