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Who can I finance with?!?!

Discussion in 'Model S: Ordering, Production, Delivery' started by jay-bay, Aug 15, 2014.

  1. jay-bay

    jay-bay Member

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    #1 jay-bay, Aug 15, 2014
    Last edited: Aug 18, 2014
    Hi guys,

    Looking to do a finance for a S 85, however, I had to do a short sale on my condo back in March because I bought it in 2007 and was underwater. I've already been turned down by Alliant CU and getting really discouraged. I have a six figure salary now, and can afford a car payment, but no one will work with me because my credit history says I have a mortgage settlement on it. I have no other debt and used to have a credit score in the 800's, but because of the housing crisis it has now put THE ONLY red mark on my credit report. Sure I can save up money to buy it in cash, but I'm hoping to get the tax incentives in April 2015. That is the only reason for wanting to finance.

    This is so frustrating. I so want this car!! Any advice?
     
  2. dalamchops

    dalamchops Member

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  3. dsm363

    dsm363 Roadster + Sig Model S

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    Might have to save up cash for it possible. Best to get everything else financially squared away before buying a car like this. Good luck.
     
  4. jay-bay

    jay-bay Member

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    I am financially squared away. I don't have any other debt nor any other car payments.

    - - - Updated - - -

    wow what?
     
  5. dsm363

    dsm363 Roadster + Sig Model S

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    Can you borrow on margin off of investments or get a loan from a bank? Not sure what else to do other than paying cash.
     
  6. jay-bay

    jay-bay Member

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    I'll give it a shot. I figure there has to be somebody out there in the same boat as me who has never missed a payment in their life and has been suffered through the economic crash of recent years.

    Ultimately, it sounds like I'll be stashing money under my mattress for the next 10 years to by a Model S. lol
     
  7. Electric700

    Electric700 Member

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    Try U.S. Bank or Wells Fargo, through Tesla. Also what about a bank you already have a good relationship with, and are you willing to put 5% or more down on the car?
     
  8. jay-bay

    jay-bay Member

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    Thanks, I am trying financing through Tesla, should hear back on Monday. The interest ears through tesla are much higher though. That's why I was trying from a external source first. I already bank with US Bank and I have about 35% of 96K as a down payment.

    - - - Updated - - -

    My purpose is to try and take advantage and receive the $10,000 tax incentive this April. :)
     
  9. Electric700

    Electric700 Member

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    Good call, yup now would be the time or by next month at the latest for a December 2014 delivery.
     
  10. Ed Chan

    Ed Chan Member

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    I've found credit unions to be generally more conservative for car loans than banks... I wouldn't be too discouraged yet... And, if you really can't get financing, at least Tesla lets you out of the deal for free... Just sent my app in to Tesla this afternoon too... I had a short sale in 2010 with 120 days late payments, but I'm back to a credit score of about 800 and have since secured a mortgage on my current house in 2013, so it doesn't take TOO long to clear up that mess. Just make sure to keep using and paying off your credit cards to reestablish your credit rating. The key to a good credit rating isn't no debt -- it's low debt and on-time payments. Good luck!
     
  11. teslasguy

    teslasguy MSP P#1117

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    Check with Penfed credit union. Lots
    Of folks including me have used them with great success.
     
  12. jay-bay

    jay-bay Member

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    Even with a low credit score?
     
  13. Electric700

    Electric700 Member

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    You never know, may be. Just talk with them and explain that you're planning to pay over $30,000 as a down payment and that you have a perfect payment track record. That should help a lot, I think.

    But, wait and see what Tesla Finance says first.
     
  14. Brunton

    Brunton Pontificating the obvious

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    You say you "had to do a short sale ... because I ... was underwater." The inference from that statement is that you could still make the payments, but elected not to. Is that correct? Perhaps that's why you've been declined for the car loan (I'm not passing judgement, btw...). Sometimes the why of a glitch in a credit rating is as important as the glitch itself.

    Maybe you can talk to the underwriter and explain the reasons for your short sale. Depending on the financial institution' lending policies, underwriters do have some ability to tailor their decisions based on their judgement and the facts of the individual situation.

    Don't give up yet. Try a few more places, and talk to the people making the final decision, if you're able.

    I had a really nasty situation some years ago which involved a near foreclosure, a bigamist wife (well, non-wife according to the law), sabotaged real estate sale, etc. After I cleared up the wife issue I was able to stop the foreclosure (despite 180 day plus delinquent payments) by talking to an underwriter and explaining the whole whacky story. Upshot - national chain mortgage company bent their rules, stopped a for-certain foreclosure in its tracks and gave me time to bring the mortgage current.

    So the reason behind the problem has a huge impact, especially if your credit was good beforehand.
     
  15. bonaire

    bonaire Active Member

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    #15 bonaire, Aug 17, 2014
    Last edited: Aug 17, 2014
    An under water condo is still a debt. When you sell a condo for a loss, it is factored into your tax return as a capital loss. I am with others that credit reports are a health check on the potential to pay versus the potential to risk a short sale or walk away. Read some Dave Ramsey books or listen to him and find that choosing to pay down a debt is better than taking a hit on the credit report. A 100K or more income is not that much in California, actually. $200k is a good comfortable starting point.

    want a tesla? Buy a used one. Can be had for under the price of new and now with the new warranty, far less of a risky choice. Going into debt to get a car you "want" and the car will depreciate by about 50% in 3-4 years. Again, that is an "underwater" condition and lenders wonder if you would walk away at that time or would pay it off entirely. There is a saying that "the value of a service drops immediately after the service is rendered." The problem with latching onto an expensive product that is available through credit is that it draws in some folks who must stretch to satisfy their "want" and after that, there sometimes is buyers remorse. Also, another saying is "maturity is defined by the ability to delay pleasure".

    of course, buy what you want but definitely work within your budget.
     
  16. dhrivnak

    dhrivnak Active Member

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    I personally would consider paying cash for the car. All cars are depreciating assets and as such you increase personal risk by taking on the debt. You may have to put off the new car for a couple of years but then you own it not the bank.

    As my father and Dave Ramsey (Financial Peace) say, if you have to ask for a loan then you can't afford it yet.
     
  17. Ed Chan

    Ed Chan Member

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    Just for reference, I just got my finance proposal back from Tesla, all 10%+tax+fees down:

    US Bank: 2.99%, 72 months
    Wells Fargo: 2.24%, 60 months
    Chase: 2.44%, 72 months

    In addition, they do not require employment verification, or proof of assets. They're decision is based solely on my application answers and credit report/score. Hope this helps, and if anyone else wants to share, I'd like to know if i'm getting the best Tesla deal or not. I asked about if the interest rate could be lower since I plan on doing close to 40% down, but they said lower rates are available only for shorter terms. Since I'm putting quite a chunk down and would like the comfort of the buyback guarantee, I'll probably go with Chase. The lower payment will help in case we decide to move house in less than 3 years.

    Ed
     
  18. jay-bay

    jay-bay Member

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    I had renters in the property for a short time, and then it sat vacant for a period of time while I was making payments on it. I then accepted a new job in CA, found a place to rent and continued to make payments until I couldn't afford to continue to do both, which then led to the short sale.

    I asked to speak to with the underwriter at Alliant and they wouldn't let me. I'm waiting to hear back from Tesla financing, but thinking I should just probably take some time to build my credit score back up first.

    Thanks for the help!
     
  19. tiblot

    tiblot Member

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    That is not correct at all. You ask for a loan because you have better things to do with your money. Big corporations (and the rich) just do not buy stuff exclusively in cash just because they can.

    Why would you drop 75-100k into a car when you can get dirt cheap rates? Buy gap insurance if you're worried.
    If you can get a rate at or below inflation, it almost always makes better sense to get the loan, invest the cash.

    If you can't / won't invest the money, then sure I suppose the only choice left is to pay cash.
     
  20. bonaire

    bonaire Active Member

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    tiblot, some people feel that being in debt is the "way to go" (ie. the OP) - to get what they want. It appears that some people are going into debt to buy a Tesla because it is the car they want. But they are not really prepared for sound financial advice and when to cash out an investment versus when to take a loan to use the money. I would wonder if the guy might have been thinking how he could tap his 401k to pay for it. If he has a 401k. Personally, I have a 0% car loan going now. Sure, it was a good idea at the time but then again, not buying a new car is also a great idea investment-wise. We mentioned Dave Ramsey above. His motto is buy a good 3-year old used car with moderately low miles. You can sometimes find one roughly half to 5/8 of the original MSRP. That is sound financial advice.
     

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