Sign of the times. Automotive Credit/Financing
10-18-2008, 10:56 AM
#26
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Ford 4x4, daily
correct me if i am wrong, wasnt this fear brought on by people who did just the opposite? if 80% of the american people did just this we would not have the credit crisis we do now.
going back to the original deals that were turned down, were they turned down because they did not have the cash or did not want to spend the cash. in my mind if those customers(making 100K+ a year) did not have 10k down(25% with 700 credit) to place on a luxury item they want they really cant afford that 50k car. thats the way i look at it anyway.
10-18-2008, 11:11 AM
#27
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2004 E55 AMG
Bingo, if there was one thing my father taught me, it was live below your means. he paid cash for everything, even if it was less than he wanted. And for the first 10 years out of college I ignored that advice blissfully, running up 50k in credit card debt. Me and everyone else I was close to did the same thing more or less, including wife to be. 13 years ago, changed jobs and moved south, sold everything we had, paid off ALL the debt and never looked back. We haven't carried a balance on a credit card since. We buy 3-4 yr old cars outright. Own everything but the house. That is peace of mind, especially in times like this.
10-18-2008, 11:13 AM
#28
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While I appreciate all the criticism of extending loans to individuals who can't afford it, I think Jim's point was there's been an overcorrection in the credit crunch and I have to agree. I am not in the automotive business but we've seen the same over tightening happen in the commercial real estate market, and honestly I can appreciate looking at deals that are overleveredged but we've seen very sound, well structured deals being rejected or even being stopped in the middle of the process for really pretty trivial reasons.
Fear is a terrible thing. It's emotional, irrational, dangerous, and potentially catastrophic - and right now it's the root of all the turmoil. There are market fundamentals that feed the fear, but if you ask anyone to show you data today that conclusively prooves unmediated fear is warranted, they will tell you no. Credit has to flow, and I will agree that having proper equity into a deal is required, but we cannot have fear usurp reason.
There was a great piece in the NYT today by Mr. Warran Buffet that I think did a good job at illustrating the collateral damage fear has had on what are today fundamentally sound companies and their values on the equities market. I agree with him 100%.
There are some market corrections that have to take place but I just don't agree with all the gloom and doom that is perpetuating the media and markets these days. I could go on and on about this but the bottom line is I really wish that there could be some sense put into all this fear and turn it into objectivity, rather than letting pessimism run rampant.
-m
Fear is a terrible thing. It's emotional, irrational, dangerous, and potentially catastrophic - and right now it's the root of all the turmoil. There are market fundamentals that feed the fear, but if you ask anyone to show you data today that conclusively prooves unmediated fear is warranted, they will tell you no. Credit has to flow, and I will agree that having proper equity into a deal is required, but we cannot have fear usurp reason.
There was a great piece in the NYT today by Mr. Warran Buffet that I think did a good job at illustrating the collateral damage fear has had on what are today fundamentally sound companies and their values on the equities market. I agree with him 100%.
There are some market corrections that have to take place but I just don't agree with all the gloom and doom that is perpetuating the media and markets these days. I could go on and on about this but the bottom line is I really wish that there could be some sense put into all this fear and turn it into objectivity, rather than letting pessimism run rampant.
-m
Scary times, these, and there is no doubt there has been a knee-jerk over correction in the last few weeks. Hopefully cooler heads will eventually prevail, the market will quit swinging like a blind drunk in a bar fight and the credit crunch will start to ease...to your point, however, so big names will slide under the waves before it does...
10-18-2008, 01:44 PM
#29
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2009 C63 Black on Black
The Pendulum
[/B]
Jimmy, isn't this is the way it should be?? I mean the guy earning 40 K a year with a small family and house payment shouldn't be looking at a $50 K or more A6 with no $$ down. He should be at VW getting the Diesel Jetta (which by the way, I drove the 2009 and is very strong and very nice.) The fundamentals are still there, you need a downstroke and the income to make the monthly nut. This is where we veered off course 10 years ago.
Jimmy, isn't this is the way it should be?? I mean the guy earning 40 K a year with a small family and house payment shouldn't be looking at a $50 K or more A6 with no $$ down. He should be at VW getting the Diesel Jetta (which by the way, I drove the 2009 and is very strong and very nice.) The fundamentals are still there, you need a downstroke and the income to make the monthly nut. This is where we veered off course 10 years ago.
As for the other areas of credit the pendulum has swung so far to the other extreme that all commerce is being choked off period.
I hope we can work ourselves out of this because so much is at stake eventually rolling up to our national security!
Regards
10-18-2008, 01:49 PM
#30
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2009 C63 Black on Black
BS - How much?
The banks need deals bad also, remember without loans lenders are done. They need us bad. If it makes sense they say yes. I am having the best month in sales I have ever had and getting deals bought easy,you just have to present them slowly and in order. I just applied for a 200k loan for my business to buy more inventory.. The loan was aproved without P.O.I. in one weeks time. It's all in your approach. Now is the time to grow your business, put together a great pkg and get to your banks, they can't wait to loan $$ to the right person with the right plans. Hey Jim I have been thinking of picking up a BS from my local MBZ dealer, It's been in their showroom for months. I'm getting itchy
Any chance you might come out to Palm Springs for the dyno day?
Regards
Phil
10-18-2008, 02:58 PM
#31
10-18-2008, 03:34 PM
#32
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I would hope not considering an 850 is perfect and my friend that GM's that Audi dealership I mentioned says in the 14 years he has been in the high line car business he has never once seen a 850 on a credit report.
10-18-2008, 03:56 PM
#33
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05 SL500, 02 BMW Z3 (Mrs. VF), 05 FJR1300, 91 ZX-11
That's because I didn't buy a car from him. When I bought the SL in July, I asked the sales guy what my credit score was. He said 850+. I couldn't belieive it so I checked it myself, 850.
10-18-2008, 04:11 PM
#34
IMO, achieving 800 is not so hard and will get you past most hurdles.
Last edited by gravedgr; 10-19-2008 at 11:53 PM.
10-18-2008, 05:26 PM
#36
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2006 Ford Escape - work, 86 300E 5spd. gone but not forgotten
Check out Ferrarichat - a lot of those guys were way over extended
and/or leveraged. I hope anyone who paid 100k+ MSRP for that
599 they had to have has a lot of cash reserve.....
As others have stated, cash and very good credit are going to
be king for who knows how long.
and/or leveraged. I hope anyone who paid 100k+ MSRP for that
599 they had to have has a lot of cash reserve.....
As others have stated, cash and very good credit are going to
be king for who knows how long.
10-18-2008, 10:29 PM
#37
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04 - 06 e55 Wagon - looking for
I pulled my credit a few days ago. In California one can pull credit from the three major agency one time per year - FREE.
I'm going to have to pay an old $300 Verzon Bill I was holding out on principle - they win. I also have a $1000 ding from a car I sold and the new owner didn't register it in his name. In California the registration is still in the previous car owners name (mine ughhh) until the new owner registers it - regardless if the Release of Liability form is filed with the DMV.
My FICO is boarding between 718 and 730. I wonder how much my FICO will jump afterwards.
I don't carry a credit card balance and usually pay off any revolving credit lines as quickly as possible such as 16K new roof in one year and new car loan from January this year is more than halfway paid off down to 10K balance. The only other debt outstanding is the new house (Arggghhhh)
I'm going to have to pay an old $300 Verzon Bill I was holding out on principle - they win. I also have a $1000 ding from a car I sold and the new owner didn't register it in his name. In California the registration is still in the previous car owners name (mine ughhh) until the new owner registers it - regardless if the Release of Liability form is filed with the DMV.
My FICO is boarding between 718 and 730. I wonder how much my FICO will jump afterwards.
I don't carry a credit card balance and usually pay off any revolving credit lines as quickly as possible such as 16K new roof in one year and new car loan from January this year is more than halfway paid off down to 10K balance. The only other debt outstanding is the new house (Arggghhhh)
Last edited by Wish4_e55Wagon; 10-18-2008 at 10:54 PM.
