[theskunk]

Hi Guys,

I'm a bit new to this, and am curious on how the financing actually works. I tried to buy last January and was turned down by just about everybody under the sun... they weren't really giving me reasons even. All I know is that my credit score was good, I had one 30 day notice on one of the reporting agencies from a month prior, and they didn't even say 'to buy that car, we'll need you to pay X down'...

How does BMW financing work? Is it only for CPO vehicles? I'm looking to trade in for a bmw, used, have 5k down and have made my debt/equity ratio much better than last January... Any tips here? Or any banks to consider?

Also -- buying from a private party vs dealeship -- do they care if i sell my car to carmax or what?

[bling_singh]

Do you mean your debt to income ratio? Have you considered what it would be after car payments are taken into consideration?

[theskunk]

Depending on interest rate, it shouldn't actually change, if anything go down -- my current car payment is about 550 a month -- and with 5k down on a 07 335i (assume 30k just for fun) I should be hoovering right around that same payment...

[bling_singh]

Originally Posted by theskunk

Depending on interest rate, it shouldn't actually change, if anything go down -- my current car payment is about 550 a month -- and with 5k down on a 07 335i (assume 30k just for fun) I should be hoovering right around that same payment...

Are they aware that you'd be trading in the car that you currently make payments upon? That would look a bit odd on the bureau report when they pulled it....unless of course your debt/income ratio is already something like 15% or lower, with little revolving debt.

As it stands that loan/lease/financing on your current vehicle is a current debt. While they can make decisions based on expectation of increased income, lenders would find it difficult to mitigate the risk that it might represent if you're approved for a second loan -- which when your current vehicle debt is factored in -- could push you well over an accepted debt/income threshold. Don't forget that it's no guarantee you could sell your car and recover the balance of the loan. You'd have to essentially clear that loan, wait 35 days, then consider contacting a dealer/BMW Financial Services before looking at some sort of finance option.

That's my humble opinion at least. I would think that they would be content with a sizeable security deposit however.

[theskunk]

Understandable, so what about doing a trade through a dealer? They should be able to keep the trade deal straight and possibly make my life a little easier, right?

[bling_singh]

Originally Posted by theskunk

Understandable, so what about doing a trade through a dealer? They should be able to keep the trade deal straight and possibly make my life a little easier, right?

I would think so, it happens when you sell one house and buy another. They must have the instruments in place to facilitate that sort of request. Step into a dealership and see what they say.

Also, if you're not doing so already, check your bureau every year to make sure things are on the level. There may be some other reason you're not not getting accepted that you don't know about. It could be as something as simple as your age...the younger you are the easier it is to inflate or deflate your score. They may be looking at how you live with your revolving debt....number of credit cards, percentage of total credit used etc etc. If you tried to get approval from all dealers under the sun, you may have made your bureau history shot up like swiss cheese. Not that it would impact your score per se, but credit inquiries by various lenders doesn't look good on your report.