So uh, who did not get approved for their Model 3?

[dsvick]

Wouldn't a lot of people run this risk if they go with a third party for financing? Correct me if I'm wrong but you're locked in to the $2500 when you configure and it takes 3-6 weeks for delivery which is where you make the final transaction. When getting approved for an auto loan though your rate is only locked in for 30 days, so if your delivery takes 4+ weeks you might run in to some problems. My plan was to get financing a couple weeks before delivery in order to avoid this situation.

Most loan approvals are good from 30 to 60 days assuming you were approved once and your situation doesn't change you should be able to get approved again if the car takes longer than that to get delivered.

Still not a single person here really answered my question. I know there’s at least a couple on this forum who had trouble with getting funded but maybe too embarrassed/shy to come forward to share their experience

I wouldn't expect there to be that many people still visiting the forum if they have been turned down for a loan and don't have much chance of getting the car any longer. Also, if they are still hanging around, I'd be surprised that any of them would want to air out their dirty laundry and subject themselves to the comments like: "Well you should never have applied if you couldn't afford it", or the "If you need to apply for a loan you shouldn't be buying it", or even the "You must not have complete control of your finances, you should get you stuff together before buying anything expensive", or the ever popular "My credit score 842, I didn't have any problems, why are you having issues? I must be much better than you".

 

[GoneCrazy]

I wouldn't expect there to be that many people still visiting the forum if they have been turned down for a loan and don't have much chance of getting the car any longer. Also, if they are still hanging around, I'd be surprised that any of them would want to air out their dirty laundry and subject themselves to the comments like: "Well you should never have applied if you couldn't afford it", or the "If you need to apply for a loan you shouldn't be buying it", or even the "You must not have complete control of your finances, you should get you stuff together before buying anything expensive", or the ever popular "My credit score 842, I didn't have any problems, why are you having issues? I must be much better than you".

This person here is a veteran of the internet. People aren't likely to subject themselves to the ruthlessness of the internet.

 

[gtmotor]

I didn’t know this is the requirement for Entry level luxury car buyer.

What would be the target or income level for actual luxury car market, 250k plus to buy a Model S/X.

Maybe I'm old school but I'd say yes. Your annual gross income should be 3x the out the door price of the car, so for a loaded Model 3 that should be $180k/year. For a Model S/X that's $300k+/year. That is IF you are taking a loan. If you've saved a bunch of money to buy the car outright that's a different story.

Tesla vehicles seem to have the odd ability to make people stretch beyond their financial comfort zone which I'm not sure is forward leaning or foolish.

For the OP I say you're getting your answer. Very few if any are getting rejected due to the easing of credit requirements.

 

[Marsnaut]

I applied through a credit union and got pre-approval for 35k.

I don't want to reveal too much information but I'm two years removed from college. My salary is 5 digits, but I also receive consistent income from writing covered calls on TSLA (I included on my application as other income), which pushes me close to $100k. I'll be putting down ~$20k. I'm a first time auto buyer but I have a credit history (longest card history is 5 years but I have about 20 accounts with ~2.5 years average age of accounts).

I think it is hard to get rejected. A friend on mine who is in a similar situation makes around $65k and was approved for $30k but with higher rates (3.5%+). He brought a personal check but it wasn't accepted on the weekend, so he's trying to refinance with a larger payment.

 

[Keith909man]

I applied through a credit union and got pre-approval for 35k.

I don't want to reveal too much information but I'm two years removed from college. My salary is 5 digits, but I also receive consistent income from writing covered calls on TSLA (I included on my application as other income), which pushes me close to $100k. I'll be putting down ~$20k. I'm a first time auto buyer but I have a credit history (longest card history is 5 years but I have about 20 accounts with ~2.5 years average age of accounts).

I think it is hard to get rejected. A friend on mine who is in a similar situation makes around $65k and was approved for $30k but with higher rates (3.5%+). He brought a personal check but it wasn't accepted on the weekend, so he's trying to refinance with a larger payment.

This post was probably the closet to answering my question. Thanks for sharing! Im sure you weren't the only one of this forum or let along had to drop more cash down to make it happen.
So in your case as a first time car buyer, the bank limited you to 35k which is more then fair and you covered the rest in cash.
So the situation with your friend who's also a first time buyer had some trouble for understandable reasons and now he's on the hunt for new means of funding. So, in that case, is Tesla holding the car for him until he figures it out? If so, what happens to his "delivered" car if it doesn't work out?

 

[Qbenjamin]

Maybe I'm old school but I'd say yes. Your annual gross income should be 3x the out the door price of the car, so for a loaded Model 3 that should be $180k/year. For a Model S/X that's $300k+/year.

Tesla vehicles seem to have the odd ability to make people stretch beyond their financial comfort zone which I'm not sure is forward leaning or foolish.

I agree with you on this, but the practicality behind it isn't supported in today's society. By this thought process, someone trying to finance a $30K Honda Accord should gross about $90K a year. I highly doubt that most people are that conservative, although they probably should be. Unfortunately, people are going to stretch their budgets to make this car fit in it, if they truly want it. I always laugh when I see the $100K cars parked outside an apartment building (although I understand that temporary living conditions may be ideal for the aforementioned individual).

 

[Marsnaut]

This post was probably the closet to answering my question. Thanks for sharing! Im sure you weren't the only one of this forum or let along had to drop more cash down to make it happen.
So in your case as a first time car buyer, the bank limited you to 35k which is more then fair and you covered the rest in cash.
So the situation with your friend who's also a first time buyer had some trouble for understandable reasons and now he's on the hunt for new means of funding. So, in that case, is Tesla holding the car for him until he figures it out? If so, what happens to his "delivered" car if it doesn't work out?

This might not be applicable to other institutions but I applied through FPCU, with a loan process that can be completed fully online. They asked how much I needed and I wrote $35k as I had $20k ready for a downpayment. After the pre-approval I called in asked if I could request a higher loan in case of unexpected expenses - to which they answered yes but it would need to be approved again without a hard pull on credit.

I'm not sure if I would have been denied for having less down, but I did receive a good rate ~2.5% (not locked in until I officially take the loan). As this is my first loan, I'm not sure if pre-approval really means approval, though I believe it does as long as all my documents check out.

I might have caused some confusion with my comment about my friend. He applied for a loan for a Corvette, not Tesla, and has had the car for a few months now. He told me about troubles securing over $30k in loans without a co-signer due to income and lower downpayment for his $50k car.

 

[Keith909man]

[QUOTE=" I always laugh when I see the $100K cars parked outside an apartment building (although I understand that temporary living conditions may be ideal for the aforementioned individual).[/QUOTE]

a property investor once told me, "Only rent where you live and buy where you can rent out"

 

[cmaster]

I disagree with having large income of 100+/year for a Model S/X that costs around 80k.

Life is short. If you are able to live responsibly to yourself and family, and want to drive a nice car before you hit your 50's, go for it! I've seen many people retired from their jobs at 55+ only to "die" (lack of a better word - and I'm truly sorry if you know someone who is gone from your world) a few years later from strokes, heart problems, etc...and was not able to spend their hard earn retirement money on a dream car of their choice.

I agree with you on this, but the practicality behind it isn't supported in today's society. By this thought process, someone trying to finance a $30K Honda Accord should gross about $90K a year. I highly doubt that most people are that conservative, although they probably should be. Unfortunately, people are going to stretch their budgets to make this car fit in it, if they truly want it. I always laugh when I see the $100K cars parked outside an apartment building (although I understand that temporary living conditions may be ideal for the aforementioned individual).

 

[TT97]

Maybe I'm old school but I'd say yes. Your annual gross income should be 3x the out the door price of the car, so for a loaded Model 3 that should be $180k/year. For a Model S/X that's $300k+/year. That is IF you are taking a loan. If you've saved a bunch of money to buy the car outright that's a different story.

Growing up, I always knew the rule of 3. Buy a car no more than 1/3 your income and a house 3× your income.

The house rule doesn't work well in L.A. (plus interest rates are considerably lower than the 70s & 80s) and felt the car rule worked well when you are single but not as well if you have a family.

 

[Runt8]

In terms of getting several quotes, will the banks all pull your credit score in a way that potentially causes it to go down?

I had a credit card stolen and for some reason the bank closed my account and opened a new one (which seems strange to me, not sure why they couldn't just issue me a new number). The next month my credit score went down by 40 points although it's since gone back up about 25.

 

[dsvick]

In terms of getting several quotes, will the banks all pull your credit score in a way that potentially causes it to go down?

I had a credit card stolen and for some reason the bank closed my account and opened a new one (which seems strange to me, not sure why they couldn't just issue me a new number). The next month my credit score went down by 40 points although it's since gone back up about 25.

From what I've read a grouping of similar credit report pulls all made in roughly the same time frame will usually be treated as a single request. That's because people usually get multiple offers in order to chose the best one. If, on the other hand, there are several spaced over a month or more then you're likely to see them treated as separate requests each of which will have an effect on your credit score.

The reason your credit score went down when you got a new account is probably because they closed an older established account and replaced it with a newer one, thus reducing your credit history. I'd be curious as to why they didn't just issue you a new card with a new date and security code.

 

[Runt8]

From what I've read a grouping of similar credit report pulls all made in roughly the same time frame will usually be treated as a single request. That's because people usually get multiple offers in order to chose the best one. If, on the other hand, there are several spaced over a month or more then you're likely to see them treated as separate requests each of which will have an effect on your credit score.

The reason your credit score went down when you got a new account is probably because they closed an older established account and replaced it with a newer one, thus reducing your credit history. I'd be curious as to why they didn't just issue you a new card with a new date and security code.

Thanks for the response!

I'm also curious - I called them and reported it stolen, and they said they would send out a new card. When I got it in the mail it was a completely new account, and my old account was shown as closed when I logged in to the website.

 

[GoneCrazy]

Growing up, I always knew the rule of 3. Buy a car no more than 1/3 your income and a house 3× your income.

The house rule doesn't work well in L.A. (plus interest rates are considerably lower than the 70s & 80s) and felt the car rule worked well when you are single but not as well if you have a family.

Interesting, I grew up with rule of 2 for things being the commonly spouted guideline (2x for house, 1/2 for car), but really at the end of the day, each person's situation is unique to their saving / spending plan. Funny, thinking about housing costs in high CoL places with good public transport, you could almost create a rule of 10 (10x home, 1/10 transportation).

 

[McRat]

Old saying: A rich man shows you his house. A poor man shows you his car.

 

[cmaster]

Live life by your rules (just don’t break any laws doing it) and don’t follow anyone advice that stops you from doing what you want.

I get offended when people say it is too expensive for me. I still work 8 hours a day. I still have food and a house. I still pay all my bills. For nearly 15 years. Have a Model S despite people saying it is too expensive for me.

Whatever. I know I will have fun before it is time for me to croak.

Who cares if you are rich or poor. All it does is separate people from living the life they want.

 

[SageBrush]

People rationalize their choices to match what they want. Whatever.

The larger perspective though is that the US is run on debt and that has consequences. Chief problem I think is lack of flexibility and resiliency in the face of future stresses.

Japan provided a very interesting example after Fukishima when its economy was hobbled and massive infrastructure repair was needed quickly and the risk of rampant inflation was on the horizon. The world-wide Japanese flooded Japan with money -- money they had in reserve. It got the country going again in astonishingly little time.

 

[cmaster]

Your quality of life has nothing to do with debt or savings. I can tell you that much. You save up a treasure chest for your retirement only to find out at retirement you have can't run around anymore because you have knee problems, heart problems, cancer, etc...Doctor tells you only have 5 days to live, all the money you save, where does it go?

You take a loan out for 8 years for 65k. Paid it off in 8 years. How will that affect your life after 8 years? You get a better job if you want to since 8 years passed will give you all that promotions, experiences on the 9th year, you take that leap to become a manager, store owner, business owner. Take a bigger paycheck and you can still save a treasure chest for retirement.

Some people will say buy a house and others will say to rent. Use a strategy that makes you live your life the way you want.

I just don't get why people still telling others that it's too expensive.

 

[gtmotor]

I'll never tell another adult that something is too expensive for them, that's pretty rude. I will however give pragmatic advice since I don't like to see my friends suffer after making a poor decision if they could have avoided it.

I also grew up hearing about the "rule of three" and I will tell my kids the same thing If they choose to abide by it someday... well that's on them.

 

[Tummy]

I like 5% of net worth to balance savings/early retirement and having a nice car. That figure might need to be adjusted if you live in a high cost of living area.
https://www.financialsamurai.com/net-worth-rule-for-car-buying-guideline