adlee3

Hey everyone! I would really appreciate your answers and advice to my questions. So a little bit of the background.


I have a 2008 G35X Sedan that I financed for 335 a month. I have been paying for the loan for about 1 year and 3 months. I have about 13000 left to pay on my sedan that has a KBB value of 22,000. I will also have about 2000 in cash as a down payment.

I was very happy with the sedan but initially I wanted the coupe version. I have been looking at a 2008 G37S Coupe at 29,995. With the trade-in value and my down payment, I would roughly pay about 430 a month +/- depending on interest rates.

So now here is the issue. I will be graduating from college (u of i champaign!) in 2 days and will be going for my master's degree. For the past year an a half I have been paying 335 out of my own pocket by working part-time as a full-time student. Student loans/grants have been covering my living expenses and will do so while I pursue my master's degree.

About 98% of the graduating students from the grad school I will be attending have an average starting salary of 80,000. That will be in a year and a half for me. So regardless of my decision to change from a sedan to a coupe, I will still be paying 335 a month for the next couple of years.

So my question is basically at this moment,

would I even be approved for a loan to get the coupe? would i have to co-sign again for the new loan. I have a co-signer already for my current 1. (current credit score is 715)

The payments would jump a hundred more dollars a month which will be perfectly fine with me, and in a year and half, it won't be a problem at all.

Initially I was just going to keep my sedan for another year and a half, and after I get my 80k salary, I would think of my options then. But if all it takes right is for me to work a little more hours to get that extra 100, I wouldn't mind (+I get the coupe I always wanted). And regardless, i'll still have a 335 dollar payment.


Thanks for taking the time to read this!

BagFalls

With that credit score, you should have no issues getting the loan w/o a co-signer as long as you are earning enough money to have a favorable debt:income ratio. In my experience, creditors get a little hesitant when you car payment exceeds 20-25% of your gross monthly income.

I dont know a lot about this topic beyond my own personal experiences, but I'm sure google would be a great resource for checking your income/debt ratio, and determining whether or not you would be granted the loan without a cosigner.

adlee3

I think the problem here was that technically, my favorable debt:income ratio on paper wasn't speaking volumes to anyone.

Since I was working part-time while studying full-time, at most I could only make 600-700 a month. But since my student loans have covered my living expenses. I have almost all of that to spare for whatever I wanted. Plus my parents have agreed to help me out. So if that 20%-25% mentioned applied to me, I don't think I would get anywhere with the loan because a lender may see that as a high risk based solely on my income to debt ratio.

But that's why I was curious because, initially when I got the loan for the sedan, I didn't even have a part-time job at the moment. And I'm sure my co-signer said he wasn't willing to pay for the vehicle. So how did they approve me then? I didn't even have a great credit score at the time. Is it simply just get a co-signer and you are good? I thought they took into consideration other things, which if they really did, then I don't think they would have approved my loan before.

Does the fact that I've been paying 334 a month for a year and a half with no missed payments, say anything? or is it just meaningless information!

Thanks for your answer! really appreciate it!

BagFalls

The last year and a half definitely built your credit. Even if your previous co-signer stated he wasnt contributing to the loan, they still factor his income into the application. Another thing I thought of: there are additional boxes on the loan app, so you may be able to declare your parent's contribution to you and maybe even your financial aid to make the ratio more attractive.

Grats on graduating college. I have a friend that went to your school for his BSEE, and he is doing very very well right now.

Good luck with the purchase. I'm driving a sedan as a loaner right now because my coupe is in for service, and I will tell you the difference is night and day.

adlee3

I really appreciate your feedback!

Yeah.. the day and night thing applied to me as well.. and I don't even have a coupe. Lol.

So, do you think when I walk into a dealership.. they are going to point at the door because my circumstances are complicated?

And do you think when the new g comes out.. ill regret my decision?

Thanks!

BagFalls

My last car purchase before the G was really complicated due to several financial oddities. They stayed with me till 90 minutes after close to finish the deal and work out the kinks. Ultimately, they want your business. They should jump through hoops for you. Not the other way around.

Hard to say if you'll regret it or not... I don't know you, and I don't know what the next G will offer. Every person is different. In your situation, knowing everything I know now, I'd definitely try and stick with the sedan till the next gen comes out... but that is speaking from the experience I've gained buying a car every year for the last few years. It took me years of wasting thousands and thousands on cars to gain that perspective.. It's nice to have a nice car, but gawdamn I wish I had invested that money instead.

adlee3

Thanks for your input again!

I'm getting closer to making a decision now.


Do you have any tips or advice on what I should do before I go to the dealer? Also should I explain my situation as soon I get in so they know, or call them ahead of time? or should I just wait until I choose the vehicle.


Bagfalls, you've been a great source of wisdom so far

Beer Magazine

Here's the advice. Keep the car you have and when you get a job get a new car.

adlee3

and the reasoning...?

RIDEwithG

I would keep the current car as well. I don't think it's worth the risk. $100 may not seem like much, but going into grad school may require that you put in more hours studying, which could take away from your work hours. You might not think about it, but having financial flexibility, even if its a $100 bucks a month will help you in the long run. I think once you start raking in $80k a year and your student loan repayments kick in, you will have a better understanding of how much car you can afford. Then, there might be a even better G37 coupe available.

As far as credit is concerned, I am not sold on 1.5 yrs of payments being enough to do it on your own. I think you still might need a cosigner. A good length of credit history is at least 7 years. Since you are just graduating from college, you probably don't have that much credit history. I financed by first car when I was 24, after finishing grad school and BMW asked my work for a "proof of income" letter. I had about 6 years of credit history then.

kaoticdemize

iTrader: (2)

keep the sedan and get a new sedan

But in all honestly you will still need a cosigner simply for the income area, the 600-800 a month is far from being able to qualify on your own. I would wait though until you graduate as infiniti generally has deals for grad students going into their field of work

MACS

iTrader: (3)

I completely agree. The reasoning is... live within your means. You're not living within your means right now, because you're living on borrowed money. You're spending money you have yet to make.

Are you, by chance, studying government in college?

Beer Magazine

Nobody really lives in there means. I'm assuming we all have a loan for something.

Cars will be easy to get at any time.

MechE

I agree with those who say wait. I was in the same boat as you two years ago. When I started college I bought a new Chevy Impala. Half way through school I had a good paying internship and I was going to trade in my Impala ($310 a month) for a 2004 G35. The 37 was out by then and I kept telling myself it was ugly. Man was I psyching myself out. My coworkers and parents got it through my head that once I graduated I would have a good paying job (engineering degree) and I could buy something new exactly how I wanted it. Well I waited another two years and enjoyed the money I had between then and now. I don't regret it.


I have always been told that you should buy a home with a mortgage equal to or less than one weeks worth of pay.
Make a car payment with insurance with half a weeks worth of pay.
The rest for SAVINGS, food, clothes, and fun.
A girl who makes her own money

But hey, its your money. You are your own person. It is your call.

PS.
Congrats on graduating from UofI. I should have gone there...

MACS

iTrader: (3)

I disagree. Most people have home loans. Homes, in good times, are an appreciating asset. Some people have car loans (depreciating asset, but I believe cars are a tool, not an investment). Others buy used and pay cash. Smart people live below their means and save.

Those who do not live within their means probably lost their homes during the housing crash because they bought more house than they could afford... or bought a house and then refinanced it and took a bunch of money out to buy crap they didn't need. Some blame the banks because of their "creative financing"... hogwash. If you can do MATH, you know a bad deal when you see it. If you gambled on the housing market to continue going up... you lost. That's why they call it 'gambling'... and that's why I don't gamble.

Most people carry a balance on multiple credit cards, too... THAT is not living within your means... that is trying to keep up with the Jones'.

If you can't afford what you like, learn to like what you can afford. I drove a Geo frickin' Metro for 2 years. (20 years ago, but it was cheap, reliable, great gas mileage... and it was within my budget)

The gentleman who posted this thread should really be talking to a financial advisor... who would tell him EXACTLY what I just said. (or he can maybe listen to Dave Ramsey)

I'm certainly not trying to tell the man what to do. He can make his own decisions. I'm just trying to impart a bit of financial wisdom.