Strategy for getting approved for Higher Loan Amounts

[creditguy321]

Hey All,

In the next year or so I'll be looking to replace at least one of my vehicles and within the next few years likey the second as well. For the second vehicle I'm looking to replace, I'm wanting to purchase a more luxury sport oriented car (i.e. a BMW M3/M4) and of course with that comes a higher price tag. My question is how to go about getting approved for a loan/financing that would likely be somwhere between $70k-$85k when I've never had a loan for that amount before. I have the income and the credit to justify the loan however aside from a incredibly large down payment (i.e. >15K) I'm not sure of the best way to qualify. Is it a situation in which I will need to try and obtain another 1 or 2 auto loans for lesser amounts but more than I've currently been approved for before. For reference I've had two autos before both in the neighborhood of $23k (both currently paid off). Should I plan to perhaps replace one vehicle with a loan that is more than that but less than my ultimate goal first? 

Any advice about the best way to approach it would be greatly appreciated!

[Horseshoez]

I rather doubt you'll have an issue as long as your credit scores are good and you have the income.

[iced]

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@Horseshoez wrote:

I rather doubt you'll have an issue as long as your credit scores are good and you have the income.

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Basically this. The bar to qualify for an auto loan is so low it could be used in the limbo world championships, so unless you've vastly overestimated your credit and/or income level, you shouldn't have much to worry about. Just be sure not to accept any loan with a term longer than 60 month (and ideally 48 or less); those 72+ ones typically are the predatory loans with worse rates and are very prone to borrowers being underwater on.

[Horseshoez]

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@iced wrote:

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@Horseshoez wrote:

I rather doubt you'll have an issue as long as your credit scores are good and you have the income.

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Basically this. The bar to qualify for an auto loan is so low it could be used in the limbo world championships, so unless you've vastly overestimated your credit and/or income level, you shouldn't have much to worry about. Just be sure not to accept any loan with a term longer than 60 month (and ideally 48 or less); those 72+ ones typically are the predatory loans with worse rates and are very prone to borrowers being underwater on.

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Agreed, I recently accepted a 48 month car loan, a term which was twice as long as I wanted.  Why?  Because the interest rate for ONLY the 48 month term was 2.49%, everything else was at least a point higher.  Thinking about this further, at that rate, I probably would have happily signed up for 60, or even 72 months; kind of like free money these days.  

[creditguy321]

If you don't mind me asking, have you had a car loan previous to this one before? If so how much more was the current loan you were financed for as opposed to the previous loan? 

[Horseshoez]

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@creditguy321 wrote:

If you don't mind me asking, have you had a car loan previous to this one before? If so how much more was the current loan you were financed for as opposed to the previous loan? 

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LOL, well, in my case the delta between my last and my current was rather significant, my previous car loan was for an old Honda Accord which I bought while our economic world was in freefall; if I recall correctly, the initial loan amount was $4,700; the current loan is for $38,000(ish).  

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[creditguy321]

That's actually helpful to know. I wonder if I've placed too much emphasis on the need to have previously secured loans that were approaching (in dollar amount) the figure you want to currently finance.

[disdreamin]

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@creditguy321 wrote:

That's actually helpful to know. I wonder if I've placed too much emphasis on the need to have previously secured loans that were approaching (in dollar amount) the figure you want to currently finance.

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My SO had one previous auto loan that I was also on, it was for about $19k. This time around SO app'd solo for one of our auto loans last year, somewhere north of $50k and T1 financing, without issue. I'm not sure how much stock I put in needing previous loans of similar amounts, given that. As long as profile and income support it, I can't see why it would be an issue.

[805orbust]

@creditguy321  you're definitely overthinking it. Income and credit. That's it. It's a secured loan so the underwriting is much different. My DW bought me a car a few weeks ago as penance. She was pre approved for $61,000. That's stupid in my eyes as she only makes $50k.  Of course my car cost nowhere near that (financed $24k), and the last car loan she had was 7 years ago ($23k) as I just buy her cars in my name over the years and she's never there to sign... you'll be fine. 

[creditguy321]

You all were correct. Just got Pre-Approved through PenFed for $80K no issue. 

Thank you!