fortytwo

Hi folks!

I've been cruising this forum for quite some time now and I've finally registered.

I decided to make the jump and (I thought) buy a C63 AMG this month.

I found a sedan loaded without the carbon fiber trim and parktronic in my area.

Went to the dealership, test drove it and immediately got sold

But unfortunately it didn't go as expected.

I'm 27 years old, with "250$" debt which is a single credit line opened for about 1 year and half.

Income is 140k per year and I rent for 500$ every month. No mortgages, no debts and I thought a great income/debt ratio would have given me access to great rates...

I got "offered" by MB (or the dealer?) the following for a new 2013 C63 with 50 miles on it:

MSRP = $ 81,975
Price negotiated = $75,417

Down payment required: $40,000
Rate = 6.99%

with $849 payments for 60 months.

No need to say, I got pretty shocked. The story I got was that I was a first time buyer (I am indeed) and so Mercedes would not let me buy a C63 unless I put half the price of the car in down payment (I can, but I just refuse to do so).

What do you guys think ? I'm gonna go to Wells Fargo this week to see what they can get me. I'm hoping to get a significant loan (aiming between 60-70k) at a good rate but we shall see. I also registered at Penfed and will apply if I can't get anything with WF.

I had been waiting for a long time to pull the trigger and boy it ruined my Sunday!

Thanks for any advice you guys have, I'm a huge fan of this community.

ZephyrAMG

It's not uncommon for your first car purchase for them to request 50% down. My first purchase, M3 I was required to put $25K down on an $80K car...and I did so. It reduced my monthly payment from $800 to $600 but they still were very rigid as to putting a majority down...

If you really want something, you better be ready to pay for it....especially if you claim you have no debt. small expenses and make a great annual income. If it ruined your Sunday and you wanted it that bad, you should of just nutted up and gave them the money...

norb

Wow, that's crazy. Try and join a credit union instead, like PenFed.

htoudiee

I know what you mean. Same thing happened to me in the past when I bought my first car. At that time there was no way around it (other than co-signer, but even that was hard).

Unfortunately, from a risk perspective, you will be categorized as a higher risk if you've only had a credit card for 1 year. Is there anything else on your credit (house, other financed items?)

I also have an issue with that monthly payment (the $75.5K car is ending up costing you $90,940 or so) but at this point, that's besides the point.

I'd say try WF or PF and talk to the loan officer if possible to explain.

fortytwo

Thanks for the feedback, but it's not really about "nutting up". It's more about being responsible for me. I don't really make crazy decisions on the fly, so that's why I walked away.

Thanks for replying. I also made the maths in my head and saw the "trap" with what they offered. It didn't sound like a wise offer at all to me.

I don't have any house or anything. I've always been renting.

Even though I'm a permanent resident here, I'm originally from Europe and I've always had the "less debts is better" mentality. Feels like it's working against me here in the USA.

I'm gonna go to WF hopefully today and will keep you guys updated!

fortytwo

Worth mentioning, I also found a CPO one from 2013 (500 miles on it) but not exactly near me.

MSRP is 81k, they already said yes for 74k. I'm gonna try to get it down to 70k.

But even though if I bring it down, I'm stuck with the same problem regarding the loan situation.

My friend was with me at the dealership and he was like "I give you your 40k dude for 0.99%", but it doesn't fix the problem as I won't have any history anyway.

All this is really frustrating...

Sidv22

I think you need to push for a better price. And unfortunately, bad history is preferred over no history or less history.

jrcart

That's NUTS! 6.99% is a high rate for a new car. Your income/debt ratio looks fine but what is your credit score? If you are 750 plus with your income and debt/income ratio you should qualify for a tier 1 prime rate(1.99-3.99), 6.99 is a sub prime rate in todays world. I have never heard of someone needing to put down 50%, I have a friend that recently(last year) went through a bankruptcy and home forclosure due to a nasty divorce and he just went out two weeks and bought a $50k car with 20% down and got 6.25% rate.

fortytwo

Thanks for the feedback! I paid reports for my credit score Saturday night and and all 3 report 750 with green everywhere (no late payments ever).

He told me the problem was not the credit score but that I never financed a car before.

m a x i m u s

like norb said earlier, check out credit unions. they usually have the best rates. that's what i did.

jrcart

The dealer is BS'ing you, the fact that you say you have green/on-time everywhere tells me you have numerous financial institutions and creditors reporting to the credit bureau's. A 750+ score combined with your income level of $170K per year and debt to income ratio should be enough to get you done at a prime rate with a much smaller down payment. Sounds to me like the dealer is trying to buy some points on you. Ask to see the computer in the finance managers office. When they shop a customer around for a loan they get a yes or no from the bank and the interest rate they get you done at.

My suggestion is find another MB delaership and go work out a deal on a similar car, make them beat the first dealers deal on the price of the car and not until that is done should you have them run your credit. Too many inquiries will lower your credit score, but not by much, a point or two per inquiry usually but too many inquiries can ding you a little.

Where are you located? I would put you in touch with my dealer here near Chicago, best dealership I have ever dealt with, never any funny business, most honest and ethical car dealership I have ever bought a car from.

SaphGreyC63

I went through the same problem.

Young guy 23 at the time of purchase, good income, absolutely no debt and a credit score above 750. Been using credit cards and debit cards since I was 14.

Ready to buy, and the best rate they got me was 4.99%.

My good buddy was the salesman so I know he wasn't bs-ing me when he told me its just too much car for a first time buyer at your age. He told me if I wanted to get into a normal c350 he could get me 2.99% right away but the C63 was just alot of car for a first time buyer in their eyes.

Needless to say my solution for me was my parents were willing to cosign since they knew I was good for it. Brought my rate down to 2.99%. Saved me a couple thousand bucks in the long run.

jrcart

4.99% is not as bad but it's the 50% ($40,000) down payment that has me scratching my head. If I were OP I would probably take a 4.99% rate if they could get him done for a 10-20% down payment which should be no problem.

khmergod

Dealers will be more lenient with loans but will be way more interest. My first MB was 6.5% with 14K down at age 19 with 0 credit history. It will be harder to get loan from banks, but it usually is less interest. Good luck.

fortytwo

My income is 140k per year, not 170k. And that's before taxes, so instead of 11166 per month, I get killed with taxes in CA, only 6200 net.

Thanks for the tip on the credit report! Feel free to reach out in private and I will give you my info!

fortytwo

The thing is that I'm 27 in September and I've been working for quite some time. I'm not at all a fresh out of college type of guy (even though MS degree took forever), meaning that I have stable income etc.

It's really frustrating.

fortytwo

Yeah, with these rates I would be okay. I planned on putting less than 20k down, which should be fine including taxes.

But they didn't want to work with me.

What they offered me instead was even more crazy. I didn't write it down, but I believe they asked 25k down on a lease with even worse rate.

HoozyerdaddyC63

I'm certainly no expert, but the first thing I thought about was your credit score. I'm surprised it's as high as it is with such a short history. I used to always keep my credit balance at $0 and could never get above 800.

While moving out to Cali I had spent 30% of my available credit and when I went in to buy my first Mercedes I found out my credit score was 845. I was floored and asked how that could be. The finance lady told me that paying off your credit card every month does not increase your score, but having 20-30% used does. I still don't understand entirely why, but I have tried out the FICO calculator and sure enough, I have a higher score if I pretend to have 20-30% of my available credit used.

Don't give up though. I walked into a SoCal Honda dealership with a friend of mine who had just moved from Canada. He had cash to buy the car, but wanted to finance to help him build credit. IIRC,they wanted 20% and some ridiculous rate (I think it was 18.99%) and I told him to walk away as fast as he could.

He ended up at another dealership and got his car for 10% down and I believe 6.99% APR.

Good luck and I hope you get to enjoy a new C63.

novae500

Look into a credit union like others say. Maybe take jrcart on the offer and buy from his sales guy. Even if you have to ship it, may be worth it if its less down and a good/better price for the car.

fortytwo

Thanks guys for all the answers!

I just walked out of WF and they give me an answer for 60k loan in 2 hours.

The ratio will be 11% after the loan regarding the debt so the guy confident I will have a better rate (2.79 if new).

Will keep updating!

CoolBDPhenom03

1. Have you checked your credit report for errors? That could be a factor, however unlikely.

2. USAA or PenFed have the best rates. Mine's like 1.99% or 2.49%...I can't remember exactly.

TBH, I don't think I know a single person who has financed through MB. My credit score took a beating when I bought my place (of which I still have like 60% outstanding) and especially when I was carrying high balances on my cc's when I was briefly unemployed. It sounds like you should be in a much more favorable position. Either that dealership is really pulling your leg, or there could be errors on your credit report.

jvanbrecht

That is not correct, well semi correct maybe. What it comes down is that banks are in it to make money. They do this based on you carrying a balance. If you pay off your balance every month, they are actually losing money on you. Some banks (MBNA/Bank of America for example) have been known to cancel peoples credit cards for just that reason. It's bull****, but it happens.

tomespo

I just turned 21, had 0 credit and also had to put 40k down and they would only finance me for 30 months at 9.25. I had to bite the bullet and start somewhere

CoolBDPhenom03

As long as you don't exceed 50% of your available credit on any card. That's when it starts to ding your score. I have also heard the same thing about carrying a little debt being favorable to increase your FICO score. It's all a racket of smoke and mirrors. It's also much more beneficial to request a credit line reduction than to close the card completely, unless you have unfavorable history on that card.

fortytwo

Hey guys,

I just got the answer from WF.

I got denied for 60k.

Even though I'm "PMA", Premier whatever crap (basically I have 60k on that account), they want 2 credit cards (my only credit card is with them though) and a cosigner (I don't have any family here).

That's just bull****.