Ordered my 2013, and then got shot down by Audi financial.

[nicksena]

I met with my dealer and spoke to him many times over the past 3 weeks. Met with him this past weekend, put down $500 to place my order and gave him my specs, and once pricing gets released, I was going to possibly add an option to it.

To give you some background on me, I'm a 25 year old guy. I was doing commercial real estate for about 3.5 years and then just got a new job doing economic development for the county I live in. Good job, lots of political connections being made, and a great position and resume builder for me being only 25. I started in the beginning of March, and they let me finish up a few real estate deals I already had in the works which I'm getting a nice pay day from. My credit score is 731, with no negatives against me other than all of my credit is based off of credit cards, "nothing comparable to justify a $40,000 loan" as the guy from aUDI financial put it.

One of my deals closed last thursday, so this thursday I get paid! $40,500 will be deposited into my account. I also have a pharmaceutical building I'm selling which will close by the end of this month that I get $39,200 off of.

I'm going to have $80,000 in my bank account(before I pay taxes on it), with no mortgage, and my salary is $52,000 per year. A $40,000 car loan for 6 years puts my payment at $625, which is very doable for me. Ill be able to pay all of my monthly bills, and still have 2gs left over each month take home. 1k to spend and 1k to save Id like to think.

This brings me to my point. Audi shot me down because I dont have any comparable credit, and I told this Audi finance guy I can show him proof of funds from my bank that show I could buy the car outright and then some if I really wanted to, but I would never lay out that kind of cash. He didnt care and said it wouldnt make a difference.

One I get that cash deposited, Im going to meet with my bank to see if theyll give me the loan, and the should considering how much money Ill have with them. i dont know many people who have that kind of cash laying around. I was really trying to lease and potentially purchase, but if I go through my bank I will only be able to buy.

Do u guys out here have any recommendations for me? Other ways I can tackle this issue? Don't say get a cheaper car please lol. I've busted my ass for the past 4 years and everything is finally paying off. In a few years Ill be settling down and starting a family and wont be able to do this and treat myself, so now is the time as far as Im concerned.

[Rich4114]

You should be able to get a loan through another bank and use that if you plan on purchasing. If you want to lease, then I'm not sure but there are other options. I've seen someone on here make mention of a balloon loan where there is a large payment at the end and the rest of the payments before that are more like a lease.

Weird stuff like that is going to happen if you pay for everything with cash as well. The system will not realize you have it because you never borrow money. Could you get someone to cosign for you?

[NWS4Guy]

Go with a credit union, they will have the best of rates.

[hbm5006]

Audi financial is a rip IMO. I'm a young guy as well(23 here) and actually managed to get a loan through them, but within 6 months I refinanced to my credit union anyways for a much lower interest rate...

[queue]

Go with a credit union, they will have the best of rates.

Big 2nd!

[Taint Fair]

Audi credit actually matched my credit union rates when I said I would go just come in with the money. Doesn't help the OP, but may help others negotiate.

[13S4]

The best option (finance) would be to put down like $10,000 on the vehicle. When they get that much upfront you will be approved instantly. If you don't make your payments they will take the vehicle and be up $10,000.. If you go to a credit union or a bank they wont be able to come close to the interest rate Audi Financial can give you. The bank has no incentive to give you a loan with a low interest rate. Audi can give you a low interest rate because they make money off the vehicle, and the loan.

I have unreal credit but was only able to get an interest rate of 4.9% on the 2013 model. The dealership was offering 0.9% on 2012 models, but I thought the 2013 was worth it.

Anyway I went to a couple banks and the best rate I could get was a variable rate of prime + 3% which is currently equivalent to 6%.(I have unreal credit and a half paid for house with a high salary job).

[BzzzBom]

I guess I am old school but I can't see incurring debt to buy a car unless the interest rate is the same or less than you are getting from your bank. The purchase price of your car should not be more than 10-15% of your annual income.

[skiracerblah]

I got 1.99% APY thru Audi Financial for 3 years...

[DLAB]

I had similar issues when I bought my S4. I was 26 at the time with a 'light' credit history, as they put it. The combination of my rather large down payment, my income, and the fact that I just BARELY qualified for the Audi recent graduate program led them to offer me a decent rate.

I've since refinanced through my credit union with a better rate. I couldn't go through my credit union initially because I was considered a first time buyer which would equate to a 15% APR... umm, no thank you.

[toaster]

there are different kinds of credit...

there's credit card credit, as you said you have lots of. but, there is also long-term credit, like paying off a long-term car loan or lease on an apartment.

i had a similar issue when i tried to get my car...i only had credit cards and a high credit score. luckily, my audi dealer was ultimately able to get me a loan.

the good thing is, is that once you purchase one car you will never have to worry about not having this type of credit in your history.

[kiznarsh]

I guess I am old school but I can't see incurring debt to buy a car unless the interest rate is the same or less than you are getting from your bank. The purchase price of your car should not be more than 10-15% of your annual income.

Seems a little high, don't ya think? Based on that percentage and a new S4, one would have to make over $400k a year . I think saying your monthly payment should be around 10-15% of your monthly salary is more accurate, but even that can be high.

Anyway, to the OP, I got my Focus when I was 21 and my credit was also solely based on paying off my credit cards. I managed to get the loan through Ford credit by having my aunt co-sign the loan. Other than that, I'd also recommend a credit union.

[PaperishPlastic]

I guess I am old school but I can't see incurring debt to buy a car unless the interest rate is the same or less than you are getting from your bank. The purchase price of your car should not be more than 10-15% of your annual income.

If that were the case most people on this forum wouldn't have S4's because I'm sure most people make less than $600k per year. Also with that same logic you would need to make $300-400k a year to buy an A4. I wish.

[toaster]

I guess I am old school but I can't see incurring debt to buy a car unless the interest rate is the same or less than you are getting from your bank. The purchase price of your car should not be more than 10-15% of your annual income.

...600k a year to own an s4...seems a bit steep.

and have you seen consumer spending habits in the u.s. during the last couple of decades?

during the last few years, salary meant NOTHING. it only had to do with how much credit you had, and look where that got us.

[Taint Fair]

One thing a lot of people are missing is that credit score is not everything. Salary is also not everything. When a company decides to grant you a loan they look at many factors including credit score (which long term is more important), monthly income, employment history, length of time at residence, net worth, etc. Having a high credit score does not equal a good loan rate. As I have learned through time, yes I am old, as I get older my history makes loans easier to get and at good rates. Just passing on knowledge from a friend who works home mortgages, yes I know not the same. Just a little education I have learned through my many years.

[helix139]

there are different kinds of credit...

there's credit card credit, as you said you have lots of. but, there is also long-term credit, like paying off a long-term car loan or lease on an apartment.

i had a similar issue when i tried to get my car...i only had credit cards and a high credit score. luckily, my audi dealer was ultimately able to get me a loan.

the good thing is, is that once you purchase one car you will never have to worry about not having this type of credit in your history.

Bingo. My dad co-signed the loan at the local credit union on my previous car for me ($29K loan over 48 mo) and I paid it off in 2 1/2 years. Walked into my dealership with an unreal credit score and an employee rate of 2.9% in hand from the bank I work for, and AFS matched it and were going to give me my first month free until the promotion ran out because my car was sitting in port for a week. Got them to throw in free Audi Care as compensation. It also helped that I was only financing 35k of the car over 60 months. I've got a reasonable monthly payment and will have my car paid off early.

[sor]

A salary of $52k is pretty tight for a payment like that. It sounds like that's just your base and you get (or got) paid on commission, but on paper it looks bad. They may not care that you happen to have cash in the bank at one particular moment if you don't have long-term credit, have a brand new job, and don't have the right steady earning potential on the application.

[A4A4A4]

I think they did you a favour to be honest.

IMHO, go buy a used pre-facelift B8 S4 outright (it's pretty well the same thing anyway), something that has already taken its initial hit in resale value. Now you'll still have a great car but you won't be throwing away those thousands of dollars worth of interest.

All of this unless of course you need the money for some stable asset that can yield higher returns than you'll lose financing... but most people I know usually don't have something like that on standby. Most people finance simply because they can't afford a car outright, from what I've gathered, you can.

[ayz]

I guess I am old school but I can't see incurring debt to buy a car unless the interest rate is the same or less than you are getting from your bank. The purchase price of your car should not be more than 10-15% of your annual income.

uhh dude what

also your car is worth more than your salary lol, good luck getting it financed

why don't ou just pay most of it in cash and finance like 10-20k of it

[jimf15e]

I guess I am old school but I can't see incurring debt to buy a car unless the interest rate is the same or less than you are getting from your bank. The purchase price of your car should not be more than 10-15% of your annual income.

Did you pull that 10-15% number completely out of your a$$? I've never heard that before but yes, like everyone has said I sincerely doubt there are many $600k/yr earners on this board.

To the OP - you may have a good credit score but you sound relatively risky to me as well. Hate to say it but no one likes loaning to a salesman - non-steady income historically means non-steady payments to a loan. Now I'm sure they'd have no issue if you took your multiple bulk payments and paid for your car in a similar way - one lump sum! Also, remember these forums are public. I know we're the Facebook generation but I'd have a hard time releasing that much financial data about myself to the general public. Lastly, what on earth are you doing with $80k in a BANK account?!

[GarrettReid]

If your heart is set on it why not just pay for it out right?

If you "have" to have it I don't understand why you would want to finance it when you have the available cash to pay for it in whole. It doesn't make sense to pay interest on something you don't have to.

[CreoSTi]

One thing a lot of people are missing is that credit score is not everything. Salary is also not everything. When a company decides to grant you a loan they look at many factors including credit score (which long term is more important), monthly income, employment history, length of time at residence, net worth, etc. Having a high credit score does not equal a good loan rate.

+1. As someone in the mortgage industry, we have to look at the whole package when deciding to lend hundreds of thousands of dollars. A lender/bank needs to assess a borrower's ability to actually pay back the loan, and a solid credit history is evidence that they are capable of doing so. It also doesn't help the OP that he just started new employment that doesn't appear to be in the same line of work...

[GSPoppa]

Based on your income it is easy to see why you got turned down. With the numbers you gave we can do a mock budget:

After tax income 45,000
Monthly 3,750.00

Car 625 16%
Rent/bills 1,375 36%
Food 500 13%
Clothing 300 8%
Gas 250 7%
Savings 750 20%

Total 3,800

Excess (short) (50)

This is a simple budget and may not reflect your situation 100%, but it's easy to see how a bank would look at your earnings and expenses and say you cannot afford the car. If something happened in your life you'd be screwed.

As much as you don't want to hear it, this isn't the time to buy this car, I would get a loan for a cheaper car and pay it off early to build your credit rating.

[PaperishPlastic]

Why is everyone telling this guy to pay for the car cash because he can afford it? Having $80k in the bank doesn't mean you can spend $65k on a car?!?.??? Shit ain't smart.especially with a $3700 month salary

[ayz]

Why is everyone telling this guy to pay for the car cash because he can afford it? Having $80k in the bank doesn't mean you can spend $65k on a car?!?.??? Shit ain't smart.especially with a $3700 month salary

clearly, but i hardly doubt the guy is looking for advice on how to invest his 80k commission or open to being sent to the toyota dealership

a better rule (than this dumbshit 10% of income thing up top) is that your car should not be more than a third of your gross income for it to not seriously impact your finances

[UmIsThisThingOn]

Based on your income it is easy to see why you got turned down. With the numbers you gave we can do a mock budget:

After tax income 45,000
Monthly 3,750.00

Car 625 16%
Rent/bills 1,375 36%
Food 500 13%
Clothing 300 8%
Gas 250 7%
Savings 750 20%

Total 3,800

Excess (short) (50)

This is a simple budget and may not reflect your situation 100%, but it's easy to see how a bank would look at your earnings and expenses and say you cannot afford the car. If something happened in your life you'd be screwed.

As much as you don't want to hear it, this isn't the time to buy this car, I would get a loan for a cheaper car and pay it off early to build your credit rating.

Who the fuck spends $300/mth on Clothing?

[Can_I_Haz?]

Who the fuck spends $300/mth on Clothing?

I have to suit up for work and I don't spend half that. We got some slick dressers on the board.

[lassiter]

futile...

[zerinA4]

If it takes you six years to pay off a car you probably shouldn't be looking at said car.

[phillips2024]

sucks man. i was 25 when i bought mine. i put down 4k and had a 12k trade-in. i have my amex personal and business i pay off monthly, a mortgage, and my student loans paid off. had no issue with audi financial.

although prior to my s4, i had my 300c i purchased.. even though i had great credit and paid everything off (never carrying a balance), it was very hard because i didnt have enough credit history. eventually was able to but wasnt as easy at the s4 this time around.

so maybe there is your issue. get more credit under your belt. Just because you have the money in your account doesnt mean you will get the loan. Its all based on risk..if they dont think you can pay back the money over x years, they wont give it to you. from their standpoint, your real estate job (esp just starting) is too risky for them. You dont have a steady income and who knows when your next big "pay day" is. As i said, you may be able to afford it now..but what happens in two years?

so get more credit, show them that you can pay bills, and try again that or shop around till you get someone to lend you money

[NeedQuattro]

I think the issue is that although you have a decent income, good credit score, credit history, the history is only from credit cards. If you had mortgage payment history, or assets in your name it'd be a different story. The only way I see them approving you is getting a cosigner or try to get a loan from the bank where you have your savings account, that usually works as well.

[sapsec]

AFS approved my first A4 purchase when my credit was just under 700, added $4,000 in negative and only put $700 down. Was making a third of what I make now and got a good interest rate. Their approval has led me to be very loyal to them now and have financed/leased 4 additional Audis with them in the past several years. Once you build a payment history with a lending institution it really helps. If I were in your position I would probably put $10K down on a CPO'd S4 and figure out something smart for the remaining cash. We can swap cars only because we have a very high income and limited debt - Probably not the smartest thing in the world but it is our only vice. Good luck!

[nicksena]

The best option (finance) would be to put down like $10,000 on the vehicle. When they get that much upfront you will be approved instantly. If you don't make your payments they will take the vehicle and be up $10,000.. If you go to a credit union or a bank they wont be able to come close to the interest rate Audi Financial can give you. The bank has no incentive to give you a loan with a low interest rate. Audi can give you a low interest rate because they make money off the vehicle, and the loan.

I have unreal credit but was only able to get an interest rate of 4.9% on the 2013 model. The dealership was offering 0.9% on 2012 models, but I thought the 2013 was worth it.

Anyway I went to a couple banks and the best rate I could get was a variable rate of prime + 3% which is currently equivalent to 6%.(I have unreal credit and a half paid for house with a high salary job).

I was gonna put down about 18k including tax on the car, and then finance 40k. That didnt do a thing. And my bank does have incentive to give me a loan, I'll have $80k with them. I think thats incentive enough. My banks rate was 3.37 which is pretty good I think.

[nicksena]

Thanks for all the input guys. Buying the car outright is rediculous. I'd rather pay $4,xxx in interest over 6 years and be able to keep another 60k than spend 3/4 of money money out right. Time value of money, and over 6 yrs 4k is nothing.

I did think of possible getting a 2010/2011 with under 20,000 miles if I could get it closer to 40k. I could take out a 30k loan put down the rest including tax. Idk, we'll see how it works out. My main thing is having something covereed under warranty, wherte if something goes wrong its not my problem. I get a loaner car, they fix the issue, and it dsoesnt cost me anything. That was my whole reason for going new.

And 10% of your income huh? So I could go buy a car for $5,200? Awesome. Thats excellent.

My payment would be 19.21% of my NET monthly income.

Oh and I now do have a stable income, my commissionm position is done, I'm just collecting my final checks. Yea it is unfortunate that I just started this job about 3 months ago, I know it would look better if I had a full yeare under my belt but hey, this is my situation. My problem is I cant see spending this type of money on a car Im not head over heels in love with.

[ENV²]

If it takes you six years to pay off a car you probably shouldn't be looking at said car.

Says you but many people use debt to thier advantage. Especially when rates are low. There are billionaires in the world that will have debt til long after they expire and still live good.

I think if you know how to use debt you can live good with no penalty to you or your credit score. I had a car I did a 6 year term on at 2.9% I didnt care. It was the cost to pay to drive what I could at that time that I really liked.

[helix139]

I did think of possible getting a 2010/2011 with under 20,000 miles if I could get it closer to 40k. I could take out a 30k loan put down the rest including tax. Idk, we'll see how it works out. My main thing is having something covereed under warranty, wherte if something goes wrong its not my problem. I get a loaner car, they fix the issue, and it dsoesnt cost me anything. That was my whole reason for going new.

If this is the case, look at CPO and you'll have a warranty to 100k miles.

[MrFunk]

They need to provide you a letter explaining why they denied you. Just like any other loan. If you think you should have gotten the loan then you need to look at your credit report to make sure there is nothing on there that should not be.

I have good credit and have never had issues but for some reason Chase did not want to give me a CC when I applied... so F them and take my business elsewhere... give your business to a credit union, they are better anyways... you'll be giving Audi enough business, they dn't need your loan also.,

[MrFunk]

Did you pull that 10-15% number completely out of your a$$? I've never heard that before but yes, like everyone has said I sincerely doubt there are many $600k/yr earners on this board.

To the OP - you may have a good credit score but you sound relatively risky to me as well. Hate to say it but no one likes loaning to a salesman - non-steady income historically means non-steady payments to a loan. Now I'm sure they'd have no issue if you took your multiple bulk payments and paid for your car in a similar way - one lump sum! Also, remember these forums are public. I know we're the Facebook generation but I'd have a hard time releasing that much financial data about myself to the general public. Lastly, what on earth are you doing with $80k in a BANK account?!

LOL That is funny sh*t.

[ayz]

Thanks for all the input guys. Buying the car outright is rediculous. I'd rather pay $4,xxx in interest over 6 years and be able to keep another 60k than spend 3/4 of money money out right. Time value of money, and over 6 yrs 4k is nothing.

There is no inherent time value of money

Time value of money only applies if you have the money invested

If it's invested somewhere that's greater than the interest rate you're paying, then it makes sense

If it's sitting in a savings account at lower interest than your car, that's stupid

[CBRmatt600]

I think the issue here is that you are buying a car that costs more than you earn in a year. Aside from the fact that financially speaking, that is a really stupid decision, you are going to run into trouble finding a loan for it because of that.

Everyone has their rules of thumb and what not, but I would never purchase a car which had a payment that was greater than 1/4 of my monthly net income, and I think even that is high. I know you are 25 and have the itch to drive a nice car, but trust me there are much better places to focus your resources that will allow you to drive a much nicer car in the future.