Purchase Plan

[Nate408]

Hi everyone,

I was going to see if I could get some advice regarding financing a 2015 GT. I graduated college last year and got very lucky landing pretty much my dream job. I am working as a software engineer in the Silicon Valley for a major semiconductor company and have a respectable salary, let's call it 80k. I have only had a credit card since last September, so not much credit history. My credit score is about ~720. I plan on making a 20-25% down payment on a well optioned GT (I figure around 45k). My parents can't co-sign right now unfortunately. Do you think I will be able to get a loan? I'm okay with a less than optimal APR as I would refinance in a year or two. Sorry to give you my life story, but I figured some context and details would be necessary. Also has anyone here made a similar purchase in a similar situation, how'd it go?

Thanks a bunch for the input.

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[Grimace427]

Save your money and buy in cash, or at least 50% down. If you are serious about your $80k salary it shouldn't take long.

 

[Nate408]

Save your money and buy in cash. If you are serious about your $80k salary it shouldn't take long.

Sadly... it will take a while. Cost of living here is through the roof.

 

[NVPony]

Hi everyone,

I was going to see if I could get some advice regarding financing a 2015 GT. I graduated college last year and got very lucky landing pretty much my dream job. I am working as a software engineer in the Silicon Valley for a major semiconductor company and have a respectable salary, let's call it 80k. I have only had a credit card since last September, so not much credit history. My credit score is about ~720. I plan on making a 20-25% down payment on a well optioned GT (I figure around 45k). My parents can't co-sign right now unfortunately. Do you think I will be able to get a loan? I'm okay with a less than optimal APR as I would refinance in a year or two. Sorry to give you my life story, but I figured some context and details would be necessary. Also has anyone here made a similar purchase in a similar situation, how'd it go?

Thanks a bunch for the input.

here Nate, this might help, I found this online...


Auto finance is what I do for a living and car deals are based on the following factors;

Factors.
1. Loan to value (LTV).
2. Age of vehicle.
3. Term of loan.
4. Miles on vehicle.
5. Down payment.
6. Time on job.
7. Time at residence.
8. Monthly income before taxes.
9. Credit score/profile.
10. Total debt to income including new payment.

What they look for;

1. Between 85% and 115%.
2. No older then 8-years.
3. 36-72 months.
4. No more then 100,000.
5. 10% of the sales price or $1,000.00.
6. 2-years.
7. 2-years.
8. $1,500.00 to $2,000.00 depending on lender.
9. 540 or above with 4 paid as agreed lines of credit with 1 being a installment loan paid at least 12 times for at least $150.00 a month and in the credit bureaus for at least 3 years.
10. Not to exceed 45%.

Another thing that comes into play is called payment to income ratio so depending on the term of the loan and the interest rate you would have to budget for the payment. Most lenders do not exceed 16%.

So as you can see there is a lot more to it then just your score.

The score range your in is not considered good so the rate will not be low I would suggest you find a large dealer that advertises Special Finance and talk to the Manager they will be able to help you.

Additional information.

Look I'm not trying to be mean but a 646 is right between sub-prime and standard which in this day and age will not qualify you for any of the advertised low rates those are for people with scores of 700 and up.

If you bought something new that had a huge rebate you might qualify for reduced interest simply due to the loan to value ratio but that's the only way sorry.
Source(s):
Finance Manager for a car dealer for over 9-years.

 

[scottpe]

Sadly... it will take a while. Cost of living here is through the roof.

The only part of the 'dream job' that's not so dreamy I guess.

I agree with Grim though... save and put down as much as you can. You don't want to exacerbate your high cost of living situation with an astronomical car payment. Not worth it. In the end it's just a car... having funds to actually live without excessive financial pressures and enjoy life experiences is much more fulfilling than a money pit on wheels, I've found.

 

[Nate408]

here Nate, this might help, I found this online...


Auto finance is what I do for a living and car deals are based on the following factors;

Factors.
1. Loan to value (LTV).
2. Age of vehicle.
3. Term of loan.
4. Miles on vehicle.
5. Down payment.
6. Time on job.
7. Time at residence.
8. Monthly income before taxes.
9. Credit score/profile.
10. Total debt to income including new payment.

What they look for;

1. Between 85% and 115%.
2. No older then 8-years.
3. 36-72 months.
4. No more then 100,000.
5. 10% of the sales price or $1,000.00.
6. 2-years.
7. 2-years.
8. $1,500.00 to $2,000.00 depending on lender.
9. 540 or above with 4 paid as agreed lines of credit with 1 being a installment loan paid at least 12 times for at least $150.00 a month and in the credit bureaus for at least 3 years.
10. Not to exceed 45%.

Another thing that comes into play is called payment to income ratio so depending on the term of the loan and the interest rate you would have to budget for the payment. Most lenders do not exceed 16%.

So as you can see there is a lot more to it then just your score.

The score range your in is not considered good so the rate will not be low I would suggest you find a large dealer that advertises Special Finance and talk to the Manager they will be able to help you.

Additional information.

Look I'm not trying to be mean but a 646 is right between sub-prime and standard which in this day and age will not qualify you for any of the advertised low rates those are for people with scores of 700 and up.

If you bought something new that had a huge rebate you might qualify for reduced interest simply due to the loan to value ratio but that's the only way sorry.
Source(s):
Finance Manager for a car dealer for over 9-years.

Perfect person to respond to this thread, thanks. The credit score is 720 as stated above (not good, I know). Based upon your list I'd say I meet all those minimums, however, what are items 1, 6, and 7. I had planned on making a 25% down payment which would hopefully look good to a lender. Thanks for the input.

 

[NVPony]

Perfect person to respond to this thread, thanks. The credit score is 720 as stated above (not good, I know). Based upon your list I'd say I meet all those minimums, however, what are items 1, 6, and 7. I had planned on making a 25% down payment which would hopefully look good to a lender. Thanks for the input.

Nate, I'm not a finance guy. I found that on the internet.

From what I understand getting a loan is more about stability and ability than credit scores.

Credit scores tell them what interest rate to charge. The want to see that you are stable (2 years residency) and able to afford the car (see debt to income ratio and payment to income ratio)

good luck

 

[Nate408]

The only part of the 'dream job' that's not so dreamy I guess.

I agree with Grim though... save and put down as much as you can. You don't want to exacerbate your high cost of living situation with an astronomical car payment. Not worth it. In the end it's just a car... having funds to actually live without excessive financial pressures and enjoy life experiences is much more fulfilling than a money pit on wheels, I've found.

True. I certainly don't want to end up ball-and-chained to a Mustang lol. I will be moving to the suburbs soon and should have a more reasonable housing situation. They charge an arm and a leg for new apartments near the companies. I had a week to find a place to live while I was in Hawaii (first world problems at their finest) so naturally I didn't get to shop around. I've played with loan calculators and have a fairly good grip on what my expenses are. A car payment if I can find a lender to give me a loan wouldn't be bad. I'm kind of in-between having enough to rapidly save and buy cash, and someone who would be "car broke" with a sizable monthly payment. Basically, given my impatience, and the age / lack of reliability of my current car I'd rather not wait if I don't need to.

 

[Trackaholic]

I know how you feel. I started working as a mechanical engineer in the semiconductor industry in 1996 also in SJ. I ended living together with a couple college friends in a 3-bedroom apartment. Was much less expensive than living in a 1 bedroom (which I did for the first year and a half).

Anyhow, I would also recommend saving for as long as possible. It gives you time to build credit, increases your down payment, and allows the Mustang inventory to build up and the bugs to be worked out.

Not sure if you have the ability to live with anyone else, but it really helps. I lived here at the time: http://www.essexapartmenthomes.com/apartments/california/san-jose/willow-lake/Home.aspx

-T

 

[NVPony]

True. I certainly don't want to end up ball-and-chained to a Mustang lol. I will be moving to the suburbs soon and should have a more reasonable housing situation. They charge an arm and a leg for new apartments near the companies. I had a week to find a place to live while I was in Hawaii (first world problems at their finest) so naturally I didn't get to shop around. I've played with loan calculators and have a fairly good grip on what my expenses are. A car payment if I can find a lender to give me a loan wouldn't be bad. I'm kind of in-between having enough to rapidly save and buy cash, and someone who would be "car broke" with a sizable monthly payment. Basically, given my impatience, and the age / lack of reliability of my current car I'd rather not wait if I don't need to.

or you can get a nicely equipped 14 GT, they are selling cheap now.

 

[Nate408]

I know how you feel. I started working as a mechanical engineer in the semiconductor industry in 1996 also in SJ. I ended living together with a couple college friends in a 3-bedroom apartment. Was much less expensive than living in a 1 bedroom (which I did for the first year and a half).

Anyhow, I would also recommend saving for as long as possible. It gives you time to build credit, increases your down payment, and allows the Mustang inventory to build up and the bugs to be worked out.

Not sure if you have the ability to live with anyone else, but it really helps. I lived here at the time: http://www.essexapartmenthomes.com/apartments/california/san-jose/willow-lake/Home.aspx

-T

Cool, thanks for the info I was thinking of moving to South SJ or Santa Clara. Thankfully I live with my girlfriend who's going to Santa Clara Law in the fall. I need a place close to the university.

 

[Nate408]

or you can get a nicely equipped 14 GT, they are selling cheap now.

Argh. I really do like the 2014, I test drove one in January. But even my dad, who trust me echoes everyone who is telling me to patient said a 2014 would be a mistake, and that if I do it, the 2015 would be the clear choice. I'm on this site because I'm excited about the new technology, chiefly the IRS. I'm sure I'd love a 2014, but I'm also sure not a day would go by that I wouldn't be bummed it wasn't the s550.

 

[Shark77]

I doubt you'd need a co-signer given the info you provided. Of course it matters what else you have for expenses, student loans etc...

If you can't get a rate below the 10yr Treasury rate (~2.6% right now), I'd say screw it, and save your money.

Also, I always ask myself these things when making a car purchase.

1. Can you make more money (safely) on the down payment than the interest cost?
2. Will buying this car screw you if you lose your job?
3. Are the options worth the premium, because they almost always don't translate into $ for $ on resale?

 

[Nate408]

1) Yes
2) Good question. Just about any car payment, and rent for that matter would screw me if I lost my job. That's probably my single biggest reservation. I have been doing well though in the professional world, got a 2yr promotion in my first six months. I think my job is fairly stable or I wouldn't think of getting a $40,000+ car.
3) PP yes, others maybe not

I have no outstanding debts at this time.

 

[dogiebitt]

Save your money and buy in cash, or at least 50% down. If you are serious about your $80k salary it shouldn't take long.

Don't do this. I made the same exact mistake when I bought my first car, and now I'm regretting it.

If you can afford a payment (remember, interest is basically what you are paying in exchange for a credit history), then do the payment. I would say finance 50% of it and stretch the other half over 60 months. You'll end up paying about $3000 in interest over those 5 years, but as long as you don't miss a payment, you'll have a really good credit history.

Remember, when you finance major purchases (car, house), the lenders will look at equity credit history over minor purchase credit history. Those JC Penney and Target credit cards with $2000 limits mean nothing to someone who is making a decision whether you will be able to pay back a $30k+ loan.

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