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      08-16-2009, 05:26 PM   #1
shadyx1
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Income NOT Credit?

When BMW financial approves you, do they base what you can get based on what you make yearly and not credit? I always thought Credit was the main factor in getting approved on a car but i was told they base it MOSTLY on income. They told me I can only get a XXthousand dollar car cuhz i make XXthousand a year. Is that true or was the salesperson just trying to get rid of a car that was on the lot for that price. (the car was a DEMO car). It was sometihng that was different from what i wanted (i.e., color, options). thanks in advance.
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      08-16-2009, 06:37 PM   #2
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No, I doubt he's lying to you trying to sell you a cheaper car.
It sounds like he's trying to sell you a car that you will actually get approved for.
If you could get approved for a more expensive car i'm sure he would.
More profit for everyone involved.
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      08-16-2009, 06:37 PM   #3
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P.S. What dealership are you going to?s
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      08-16-2009, 07:05 PM   #4
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Dont believe this..a car loan is based almost entirely on credit, especially past car loans. In fact when i got the loan on my 335 they did not verify my income in any way. They did not even verify that I was working and had a job. There is most likely a much bigger commission on a demo car than there is on a brand new car
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      08-16-2009, 07:08 PM   #5
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I believe one leads to the other.

Your overall approval amount is a calculation based on your previous history of making on-time payments and your net income.

I remember when I applied for a mortgage; the bank looked at my credit history; but was more so interested in what my take-home pay (after taxes) was minus all other expenses (utilities, car, insurance, etc.). I believe banks (and finance orgs - i.e. BMW Financial) uses this approach and figures out how much you can afford to pay per month given your net income and your credit history.

If you think about it, it makes sense.. say Bob makes $12,000 a year after taxes, his monthly take home pay would be $1000. Assuming Bob only spends $100/mth on his Credit Card and has no other expenses (lives at home, doesn't eat, doesn't do anything else); his maximum ability to pay back a loan is limited to $900/mth. So, even if Bob has a perfect credit score because he was able to pay off his $100 credit card balance on-time for the last 10 years; it doesn't mean he can get a $1200/mth loan term. Unless of course, he had a friend at AIG who can sell him some high-ratio loan insurance
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      08-16-2009, 09:57 PM   #6
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I had a client that was a state attorney making upwards of $175k a year with a credit score below 410 which is ridiculously bad and had been driving a 5 series for about $900 a month, so I do think they base it off a little more than credit especially if you are a returning customer.
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      08-16-2009, 10:15 PM   #7
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Quote:
Originally Posted by 335iheLLraiseR View Post
I had a client that was a state attorney making upwards of $175k a year with a credit score below 410 which is ridiculously bad and had been driving a 5 series for about $900 a month, so I do think they base it off a little more than credit especially if you are a returning customer.
How do you have a 410 FICO with a $175k Salary??
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      08-16-2009, 11:11 PM   #8
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Quote:
Originally Posted by xPaulBaiLeyx View Post
How do you have a 410 FICO with a $175k Salary??
he refused to tell me and i didnt want to pursue it.

thats not all, he consistently only had under $1k in the bank on a monthly basis. and no, it wasnt drugs.
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      08-16-2009, 11:17 PM   #9
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Quote:
Originally Posted by shadyx1 View Post
When BMW financial approves you, do they base what you can get based on what you make yearly and not credit? I always thought Credit was the main factor in getting approved on a car but i was told they base it MOSTLY on income. They told me I can only get a XXthousand dollar car cuhz i make XXthousand a year. Is that true or was the salesperson just trying to get rid of a car that was on the lot for that price. (the car was a DEMO car). It was sometihng that was different from what i wanted (i.e., color, options). thanks in advance.
At one time if you had a high fico score the dealers would let you buy anything as long as the banks pay them but with everything going on it's not what it used to be. I remember buying my first 96 accord and the salesmen telling me I needed to bring in two paystubs.

Quote:
Originally Posted by xPaulBaiLeyx View Post
How do you have a 410 FICO with a $175k Salary??
you would believe how many people I know who make six figures and have crappy credit scores. It funny cause some jobs require credit to be ran before they hire. Credit really tells a lot about people.
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      08-16-2009, 11:44 PM   #10
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Quote:
Originally Posted by LACSTER View Post
At one time if you had a high fico score the dealers would let you buy anything as long as the banks pay them but with everything going on it's not what it used to be. I remember buying my first 96 accord and the salesmen telling me I needed to bring in two paystubs.



you would believe how many people I know who make six figures and have crappy credit scores. It funny cause some jobs require credit to be ran before they hire. Credit really tells a lot about people.
Yeah I believe it's just crazy to me. . . I have a mid to high 7xx score and I am poor! If i made a 6 figure salary a year. . . Damn, the things I could do.
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      08-17-2009, 12:04 AM   #11
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basically what the CA told me was im NOT approved for the 45k car but i can get the 40.5k car. Also the deal given was worse than the specials they have on the bmw website because of my income (my credit score isnt tooo great but isnt horrible, lower to mid 700's). More money down with higher monthly payments. It was a really disappointing experiance.
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      08-17-2009, 12:34 AM   #12
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i remember my SA telling me there were two tiers when it comes to credit analysis by BMW FS. cant remember what they were called though, think of it as a gold amex and a platinum amex.
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      08-18-2009, 08:55 PM   #13
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Could be the attorney has high debt ratio. That can drop the FICO but not down to 410!
Any financial institution can put a limit on the total amount financed. They might feel that you are much comfortable making the payment based on 40k then 45k. Don't feel bad. After the BK, BMW would not even finance me. I had to lease a Passat in order to get my finances back on track.
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      08-18-2009, 09:23 PM   #14
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sounds about right

if you cant service the lease/finance payments, regardless of how good you're historical credit is. You need both income and credit to support your app.
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      08-20-2009, 04:18 PM   #15
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Quote:
Originally Posted by xPaulBaiLeyx View Post
How do you have a 410 FICO with a $175k Salary??

Tax Liens, Judgements, Collections (Unpaid student loans), Foreclosure, Deed in-lieu of foreclosure, Bankruptcies, etc etc
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      08-20-2009, 09:04 PM   #16
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Quote:
Originally Posted by shadyx1 View Post
When BMW financial approves you, do they base what you can get based on what you make yearly and not credit? I always thought Credit was the main factor in getting approved on a car but i was told they base it MOSTLY on income. They told me I can only get a XXthousand dollar car cuhz i make XXthousand a year. Is that true or was the salesperson just trying to get rid of a car that was on the lot for that price. (the car was a DEMO car). It was sometihng that was different from what i wanted (i.e., color, options). thanks in advance.

They both count. Credit used to be the most important factor. Since the credit crisis, lenders have put as much weight on debt to income ratios (this is where income comes in). Think of it this way, if you have an 800 FICO, but only make $1000/month, can you really afford a $750/month auto loan?
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      08-20-2009, 09:15 PM   #17
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Income gets you the loan. Credit gets you the rate.

If you have good credit but no income, you won't get the loan.

If you have bad credit but good income, you will get the loan at a higher rate.
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      08-20-2009, 09:51 PM   #18
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I almost forgot, the wierd thing is that nobody asks to verify the income. As far as I know from anyone it is stated. The credit report will list and employer so you can make some reasonability assessments, but nothing but a fairly broad range however. So what is the point?
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      08-24-2009, 01:23 AM   #19
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Quote:
Originally Posted by jpsum View Post
Income gets you the loan. Credit gets you the rate.

If you have good credit but no income, you won't get the loan.

If you have bad credit but good income, you will get the loan at a higher rate.
Bingo!
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      08-24-2009, 04:40 AM   #20
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that's funny... I dont believe income has anything to do with it. I have $0 income, but over 720 credit score... my parents financed my first BMW, under both my dad's and my name (so I could build credit), and this BMW, I financed strictly on my own, with a fake job I put on the application since I am still going to school... so now, my parents are paying off the first year or two of this car until I graduate, then I pay the rest after that.

So no, I dont believe they check your employment or income AT ALL. If your credit is good, then you are good to go.
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      08-24-2009, 11:22 AM   #21
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Well, 1> times have changed since you bought your first BMW with your dad, and even so they relied heavily on him. 2> Like I said, nobody asked me to prove or document the income # I provided on the app, but what I could afford was definitely discussed based on the income/ratios. Afterward, however, I realized that I could have doubled my income on the app and nobody would have been the wiser as it still would have fell within the parameters of my job salary range.
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      08-24-2009, 07:30 PM   #22
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I didnt have to prove income at all. I have a high credit score and that financed me for bmw's 1%. And never listen to the salesmen. Its some banker on the phone who will approve you, the dealership has nothing to do with it.
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