Advice Needed: $100k auto loan for someone with no loan history?

[RandomHero]

Does anyone have any suggestions on the best places to check on qualifying for a ~$100k auto loan?

Please withhold your comments on if this is a good idea or not. This is for a friend/client of mine and we have already discussed if this makes sense for him or not. As someone who strongly believes in living well below your means, I can say without hesitation that this would not come close to overextending his finances.

The basic situation:

He's looking at buying a 2011 Porsche GT3. He has the income and financial stability to purchase the car outright, but with interest rates as low as they are, it makes more sense for him to finance as much as he can.

Relevant information
-23 years old (and no, mommy and daddy do not support him in any way)
- Income is not an issue (has more than $7500/month of discretionary income)
- Excellent credit score
-No debt
-Already maxed out his 401k for the year and has other investment accounts
-Total monthly expenses are roughly 20-25% of his take home pay. The remaining 75-80% is put into savings or invested.


The problems:

-He has no prior auto loan history. He has paid cash for his previous cars/motorcycles and they were all very modest in price.

-He is obviously getting denied on the fact that he's a 23 year old single male with no auto loan history.

-Finding a place that will offer a $100k auto loan seems to be almost as hard

The question: Does anyone have any advice on who might be willing to offer a loan like this?

[kingofthedemo]

Tell him to pay cash.

[kevinbahnz]

put down 50 finance the other 50??

[AtlantaDude]

Now days, I don't see why a bank/credit union would ever give someone that age with no history a loan, unless it's a secure loan. IE: he places the full loan amount in an account as collateral. That's usually saved for people looking to build their credit up when they already have the cash. Personally, save the headache and buy outright. He may actually find someone to finance him, but I REALLY doubt it's going to be at a decent interest rate...

Yes... I work for CitiBank

[upstatedoc]

Originally Posted by kevinbahnz

put down 50 finance the other 50??

^^something close to this. He has to start building up his credit.

[ddk632]

Usually the dealer sales guys will have a broker they work with who can try to shop your friend around and get him a loan at a higher interest rate. If his goal is to build auto loan history, this might be the way to go. With the cash and income to back it up, he shouldn't have a problem this way.

[Litos]

no one sees that a 23 year old buying a GT3 is a bad idea !??!

is this kid living at home with mommy or does he plan on parking his car in an apartment complex !?!?

[NormE91]

A 3 year old GT3 shouldn't be costing him that much in the first place...

[bkM3]

he wont get approved at a good rate for a 100k loan with no prior credit history, doesnt matter how much money hes making. he should put down as much as possible and take out a small loan regardless of interest rate, just to build up his history so this way he wont have this issue in the future.

[ska///235i]

Shouldnt have problem if he can proof income and assests...but he will need a down payment

[P1]

Not sure if this makes sense. If he has an excellent credit score, then qualifying for a loan (whether it's a car loan or not) should not make a difference.

Where is he getting the loan from? The place he's buying the car from? If he cannot make that happen, then go to a credit union or bank and get a loan there.

I don't see what the issue is here.

[Joekerr]

Has he gone anywhere yet? If so, what were the responses (as to why he is turned down)?

Does he own a home? Can he do a home equity loan or use it as collateral?

If not, but he has all these other assets (modest as they are), would they be enough for collateral?

I think ultimately he's going to have to offer additional security than just the car being purchased, that's lousy security for any bank.

[RandomHero]

Originally Posted by Litos

no one sees that a 23 year old buying a GT3 is a bad idea !??!

is this kid living at home with mommy or does he plan on parking his car in an apartment complex !?!?

I had a big long beautiful post typed up to explain his situation, but against my better judgment I decided to withhold some information.

-He graduated in the top 5 (people) in his class from one of the top 10 Chemical Engineering schools in the country.
-He does live in a rental house, but that wasn’t by choice. He graduated college with less than $2k to his name. His girlfriend and he are looking to buy a home in the 5000 square ft. range, newer construction, and in a good neighborhood. That will happen after they get married.

-Mommy and Daddy do not support him in any way. Plus, he had an academic scholarship that covered everything but his living expenses. His part time job paid for those.

-Aside from his car/house, he lives the lifestyle of someone making $30k/year. To put that into perspective, he owns two pairs of dress pants, one pair of shoes, and plays video games in his free time.

-His girlfriend also graduated from the same CE school and makes extremely good money. She just bought a 2012 328i and is paying the loan off at $2000/month even though it was financed for 4 years/1.59% apr.

-If you’re questioning his judgment, he just sold his modified Yamaha R1 that had more than 100 track hours on it.

I understand that the situation looks very silly at first glance. However, I know his situation in and out and we have been very close for 3 years (his girlfriend is someone very very close to me). This is not an issue of if he can afford it, if this is an impulse buy, if financing makes sense, or if he’s too young to have a car that nice/powerful. Those discussions have occurred many times over the past year.

Originally Posted by NormE91

A 3 year old GT3 shouldn't be costing him that much in the first place...

Find him one in Cararra White with 15k miles for less money and I’m sure he’d pay you a finder’s fee.

Originally Posted by bkM3

he wont get approved at a good rate for a 100k loan with no prior credit history, doesnt matter how much money hes making. he should put down as much as possible and take out a small loan regardless of interest rate, just to build up his history so this way he wont have this issue in the future.

Again, he has prior credit history, but no auto credit history. He’s only checked two places so far, but they both cited that as the reason.

Originally Posted by P1et

Not sure if this makes sense. If he has an excellent credit score, then qualifying for a loan (whether it's a car loan or not) should not make a difference.

Where is he getting the loan from? The place he's buying the car from? If he cannot make that happen, then go to a credit union or bank and get a loan there.

I don't see what the issue is here.

I would be inclined to agree, but as mentioned above, his lack of auto credit history was the reason for him being denied. He will be checking with the dealership when he meets with them, but so far, the search on his own was unsuccessful (again the reason for this thread).

[Spinny02]

I was 21 when I leased an 996 turbo x50. It was a bit soon for my maturity but I would do it again!

I had to lease the car or get a consigner. So I leased it . I bough it from the dealer, but there are third party leasing companies.

Originally Posted by Litos

no one sees that a 23 year old buying a GT3 is a bad idea !??!

is this kid living at home with mommy or does he plan on parking his car in an apartment complex !?!?

[Litos]

Originally Posted by RandomHero

-He does live in a rental house, but that wasn’t by choice. He graduated college with less than $2k to his name. His girlfriend and he are looking to buy a home in the 5000 square ft. range, newer construction, and in a good neighborhood. That will happen after they get married.

so about a year after graduating college this kid is looking at buying a GT3, getting married and then buying a $350-400K house !?!?

does this freaking noob think he's pulling in $500/year or what !?!? he's a freaking Engineer, not a goddamn doctor with his own practice.

this guy needs a legit financial planner, not a buddy who is looking at handing him the shovel to dig the inevitable hole he is about to be in for the next 3 decades.....

p.s.
this kid also needs to understand that his $7500/month won't get him the car and the house. the car maaaaybe, but not both (even with his wife's $5000-6000/mth).

or a wedding.....

he'll learn. his green is definitely showing...

[gatorfast]

Ridiculous thread. If you are looking to buy a $100k plus car you should care less about taking advantage of low rates because you have millions more in investments.

Basically, if your friend really needs the extra income earned from this 100k then he clearly can't afford this car.

[Litos]

Originally Posted by gatorfast

Basically, if your friend really needs the extra income earned from this 100k then he clearly can't afford this car.

this.

kid gets outta college and starts making way more money than he was when he was working part time and all of a sudden he thinks he's rich HAHA !!!!

"...hi, I just graduated college - my next great decision is to go $500K in debt..."

signed,
23 year old engineer who thinks he makes $20K a month.....

[Crisp]

Originally Posted by Litos

no one sees that a 23 year old buying a GT3 is a bad idea !??!

is this kid living at home with mommy or does he plan on parking his car in an apartment complex !?!?

Do you realize how butt hurt you sound?

Who the fck cares if the guy is working the street corners, mopping bathrooms 24hrs a day, or whatever the hell else he might be doing.


The question was HOW he can get a $100k loan not if he should. Reading comprehension. Stop judging the way other people choose to live.

[Crisp]

Originally Posted by RandomHero

Does anyone have any suggestions on the best places to check on qualifying for a ~$100k auto loan?

Please withhold your comments on if this is a good idea or not. This is for a friend/client of mine and we have already discussed if this makes sense for him or not. As someone who strongly believes in living well below your means, I can say without hesitation that this would not come close to overextending his finances.

The basic situation:

He's looking at buying a 2011 Porsche GT3. He has the income and financial stability to purchase the car outright, but with interest rates as low as they are, it makes more sense for him to finance as much as he can.

Relevant information
-23 years old (and no, mommy and daddy do not support him in any way)
- Income is not an issue (has more than $7500/month of discretionary income)
- Excellent credit score
-No debt
-Already maxed out his 401k for the year and has other investment accounts
-Total monthly expenses are roughly 20-25% of his take home pay. The remaining 75-80% is put into savings or invested.


The problems:

-He has no prior auto loan history. He has paid cash for his previous cars/motorcycles and they were all very modest in price.

-He is obviously getting denied on the fact that he's a 23 year old single male with no auto loan history.

-Finding a place that will offer a $100k auto loan seems to be almost as hard

The question: Does anyone have any advice on who might be willing to offer a loan like this?

If he wants to improve his credit history, then there are other ways.
Someone with "zero" credit history can't just dive into a $1mil loan and expect to be approved. I would love for someone to trust me with a $10mil loan and would promise to return that back with, plus 30% more. However, the world does not work like that. He has to follow the proper steps and obtain credit history.

He needs to start off slowly of pay insane rates for secure loans if anyone even approves him. Don't forget, even if you have an amazing job, you can get fired at any point, the company might close, you might get injured etc. Lenders take all of this into account when you apply for a loan.
My suggestion would be to walk into his bank and see what they are willing to approve him for. If they approve him for $50k, take it and build up a credit history so he doesn't have this problem in the future. You stated that he can pay the whole car in cash so he should have no issues putting in $50k for the car.

[Digital.James]

How does he have an excellent credit score with no car loans, no mortgage, or any type school loans? Makes no sense, just like this thread...

[NemesisX]

If you can show them documents proving his net worth and income are sufficient to justify the loan, then he'll have no problem.

Net worth matters more than income. The reason is that while it may be true that your friend lives a relatively frugal life it's difficult to prove that with documents. Even if you have documents that prove he spent 25% of what he made last year or last month there's no telling that his spending habits will remain that way in the future.

Net worth is considered a more stable and reliable figure to assess loan-worthiness for people with little to no loan or credit history. Unfortunately, even though your friend will probably have a healthy and robust net worth down the road assuming he maintains his frugal ways, if he's not worth that much right now (at minimum $1M+ for a $100k car loan) he's out of luck.

Again going by you word I have no doubt that he can afford the car but the problem is that there's no way to prove frugality, but you can always prove net worth.

However if his income is truly substantial (like $400k+) then an income statement alone could work.

[Litos]

Originally Posted by NemesisX

IUnfortunately, even though your friend will probably have a healthy and robust net worth down the road assuming he maintains his frugal ways

frugality will go out the door as soon as he signs the papers on a $100K car lolololol......