@randomguy1 wrote:
@HeavenOhio wrote:
@randomguy1 wrote:I don't think you need a 30% down on a car in this market. Where does that number come from?
The OP has an extremely short credit history and is looking for a loan for an expensive car. Reducing the size of the loan by offering up a larger down payment may give him a better chance for approval.
I get that. I'm asking to understand where the 30% number came from. Is it an arbitrary number or best guess approach? Is it based on dti? Where is that number coming from?
Why not 20%?
People get denied on auto loans at 20% down, same with mortgage apps.
30% down it's absurdly rare to the point of being a formality to get approved. You will see the line pop up in some non-traditional mortgage products too TBH, but as others have explained given the nature of autos, if you're throwing down 30% it basically becomes a no risk loan unless the lender cannot find the vehicle at all... and it's hard to hide them these days I suspect.
When I went shopping before I found this forum, I did put down 30% and even with a massive open tax lien and literally not a single positive tradeline on the report, the loan officer simply stated "I guess I have thirteen thousand reasons to approve you" and done. Might have happened at 20% down, but with a 551 auto EX, I don't know on that one.
@Anonymous wrote:
Thanks everyone! I’m going to pay my Prius off and try for 30% down.
You want to pay it down not off. If you pay it off before you get the new auto loan any good points you had will go bye bye as it will no longer be calculated in utilisation. Basically save some money to show ~30% of the value is being paid up front on the Tesla and reduce what you owe on the Toyota while leaving 8mo or so of payments left so you can get a loan for the Tesla loan around the 1yr mark.
