Quote:
Originally Posted by wtwo3
I'm not sure that's entirely true. It's not an inventoriable asset which costs money to have on offer. The reason the program is offered is 1) short term benefit - incentivize younger population to get into BMW ownership, 2) long term benefit - build brand loyalty from an earlier age, and 3) because everyone else offers one also, especially direct competitors. Grads having a higher chance of lower obligation or not, the program still necessitates a strict debt to income ratio as well as an automotive payment to income ratio to qualify. In fact I'd argue recent grads are a higher risk category for a company like BMW because of the lack of credit history, and as such they necessitate 6 months of credit history as minimum qualification.
Besides that, while I agree with much of what you're saying in that it's more complicated a situation than simply looking at income and that expenses need to be looked at as well - income is a much easier metric to measure against. Sure we can ask "what is the BMW owner's debt to income ratio", but you probably won't get as much conversation there  |
I agree with your points on the grad program, but that is the thing. The strict debt to income requirement means that there are college grads that meet that requirement, if there were so few college grads meeting it than nobody would be offering it, BMW or other brands. The $1000 credit per person is offset for BMW by encouraging use of BMWFS, but if there was such a low uptake the credit would not net enough benefit on the BMWFS side to warrant the program. Or any other brand’s services or programs.
As for the issue with college grads qualifying, I suspect the biggest hurdle is not credit history time, 6 months isn’t too bad, but rather debt to income ratio. And likely not even the income value, but in this case, the biggest hurdle would likely be school debt affecting that ratio. That probably is the biggest issue for grads attempting to get the credit.