Will I qualify for financing a FRS
 

Just a general question, not looking for a "definitive" answer just wanna see if anyone else might have been in a similar position and can probably tell me what to expect when I apply for a loan.

I'm 19 years old currently residing in B.C. Canada and am planning to make my first purchase for a FRS through financing either at a dealership or a bank.

I have 2 jobs, 1 that pays 250-300/month been there for a year, and another that pays 800-1000/month been there for a 1-2months. I have student loans that I "don't" have to pay until I graduate (5 years later), approx. around 13k. Other than that I have absolutely no debts. Have no credit.

My payments would look around something like

$33,516(full value after taxes and other fees without deducting downpayment)
72 months term
2.99% (not sure if i will be approved for that rate tho)
$185 bi weekly (7k down)

Now I realize with no established credit it'd be hard for me to get approved, but I do indeed plan to put a downpayment of (20%+) and have a trusted co-signer with good credit(decent, not bad, not "great"). In addition I plan on paying Insurance up front so my monthly commitments will be strictly for the car. (1000income-370carloan=630 for other expenses every month) Do you guys think there's a chance I might get approved

In California, I met a girl who got a 2013 FRS. She had no credit and no credit score. She was approved, but her interest was a whopping 20% on top of her loan of around $29,000 (car + tax + dmv registration) meaning she is paying $5,800 extra over the course of 5 years. She also has no down payment. $580/month just for car payment. Add insurance to the mix. Now if you did have an established credit score, that 20% could turn into 2.5%, 4% maybe 6%. WAY better than 20% or more. It ultimately depends on what the bank or the dealership's bank is willing to do but expect to pay a lot more with zero credit score.

You are making $1,050/month

33,516 - 7000 = 26516
26,516 * .2 = 5,300
puts you back at 31,816 / 72 months

$441 / month you owe to the lender

1050 - 441 = $609

You are left with $609 per month for Car Insurance, Health insurance, cell phone, Gas, Food, Entertainment. Seems like a very poor choice to get this car as you cannot afford it. Rough numbers perhaps.

I would not toss away the $7,000 you saved up for btw. That is also very silly.

With a co-signer and 20% down then I think they'll finance you. Just try to get the lowest interest possible. Also, just because you can afford the car doesn't mean it's smart to commit to it. Keep in mind insurance, gas, possible mods, maintenance, and then your own personal finances....after you calculate all of that, take a look at how much that leaves you in your pocket each month. It's no fun owning a nice car but not having any money to the it anywhere.

Good luck!

And yes, they will find a way to finance you...but you'll be getting screwed in the long run. Be careful about interest rate.

Don't know prices in BC but here in Ontario:
Premium gas - $1.45 to $1.50 a liter
Insurance - Some young guy correct me but in the neighbourhood of $200 a month?
Oil - Almost $8.00 a liter for the grade of synthetic you need plus $10.00 for filter even if you do yourself
Tires - Oh say, $80 each when you wear the out and double that for snows if you plan to drive in winter (Know Vancouver doesn't get much snow but don't want it wrapped around a pole)


Just saying, BUYING the car and USING the car are two different scenarios when it comes to cost.


U.S. Guys/Gals .... YES our premium gas cost around $6.00 a gallon! That is not a typo.

Thanks for the reply. I'm still sort of dependant of my parents so Health Insurance nor is a cellphone bill isn't among my monthly obligations(they pay for it). I just want to go through this contract for a way to prove to myself that I can be responsible enough to enter a big commitment while building credit. And like I said, I will be paying for insurance up front, in addition, I usually don't spend any money on food outside of home so I can expect to have 500 per month for entertainment and gas alone(maybe 100/month for gas based from experience with cars that was bought for me). As for the 7k that's really just there in an attempt to lower interest rate and chance of approval for financing.

I definitely understand the financial situation I'm putting myself in, I also have enough in savings in my bank account to act as a safety net if ever something were to happen, approx. 25k. And it also helps that my parents are financially well off and don't mind supporting me if I need any help.

No way! Owning this car is going to eat up a huge chunk of your income. At 19 you don't want to be spending that much of your money on a car (or any time for that matter). If you had more saved for a down payment or were pulling more in per month I say "ya, why not?" but at your income..."pass"

Like I said to a prior poster, I understand the financial situation I'm in and i'm positive I can afford this car. I have a huge safety of 25k after my 7k downpayment in my bank to support this decision. I just don't want to use all of it towards a new car, which is why I'm deciding to finance. LOL i understand you guys are just pointing out that "financially" based on my income alone, it's a dumb move. However in addition to a 25k safety net in my savings, I still get weekly allowances from my parents, I'm 100% confident i can afford this. All that I'm asking is would I be approved for financing, given my current situation, and possessing a co-signer + a 20% downpayment on the car, plus paid up front insurance.

What are you really proving beyond having parents that will bail you out if you ask them to?:iono:

Serious talk: why spend any of "your own money" if your folks are going to front you the cash, regardless of how you want to word it to make it sounds like you're paying for it through your own hard earned labor, since they're already giving you an allowance? Just have them pay for the damn car and leave it under your name since that's what they're kinda doing anyways. You get to save your bank and build your credit at the same time. Why make things more complicated than they need to be.

NO

Work on getting one job that pays well enough to afford the FR-S.

Read this: https://quicken.intuit.com/support/h.../INF16169.html

So let's fast forward to year 6, when you graduate (if I'm reading your 5 year comment correctly.) You have a year to go on your loan, and I assume you now have student loans to repay. And you get to pay to live. If you're a loner and your parents are kind, maybe you get free rent and all for that time but... I don't know how hard it will be to find work when you're done.

You can not afford the car. That payment is approaching the range acceptable for something like a house (percent of your income.) You can afford the payments, at the moment, yes. It's a very risky gamble though, which could leave you completely stuck.

You're not being 100% irresponsible, having some cash stored away and all, but you really want to avoid putting that into a car. It's a huge gamble - it's not one I can recommend, and I hear others saying the same.

Personally, I won't buy a car on terms that exceed the manufacturer's warranty. I don't want to owe on something that may randomly cost me a bundle in repairs.

If you want an FR-S, perhaps one on the used market would save you a bundle, lower the risk to reasonable, and get you the car you want...

C

I dealt with low income while being in college, ended up with way more debt then you say you will. I drove a cheap car all through college and had no extra money. I would recommend to talk to the dealer and bank and find out actual interest rates. Get insurance quotes, figure out how many kilometers you will typically drive( then add half again that number) to find out your monthly fuel bill. Add all those numbers up and see how much you have left. Keep that safety net as large as possible. Another thing to consider is job demand for the career you have chosen and average pay, once you finish school it may be hard to find a job. One reason I chose my specific career path was the outcome as far as job flexability and very nice pay. I have friends who chose other careers and either don't have a job in that field or are making next to nothing. Plan for the future, what you want right now may not be the best for you 3 or 4 years down the road.

LOL. classic vancouver. spend what you can afford based on what you make, quit sucking on your mom's teats.

$1300/month income, is that gross or net income?

lol holy f*ck

Get one of your parents to co-sign with you. It should net you a lower rate and at the same time build up some credit at the same time.

lol just lol

is this real tea?

Get your parents to buy it for you. They're paying for everything else, might as well get them to pay for this as well. At the minimum, have them co-sign it for you because unless you're like me, you won't qualify for a low interest rate.

Just because you HAVE a 25k safety net doesn't mean you want to tap into it. What you SHOULD be doing is investing that 25k into something else (mutual funds/CDs).

Aside from that, why would you ask us if you can afford it if you already know you can afford it? Your parents are your walking bank account.


I feel ashamed to be apart of his generation.

Wait til you graduate man. Now is the time to start building your savings for lifes "surprise" moments. And get those student loans off your back ASAP. After graduation buy yourself a year or 2 old FRS/BRZ. There's a couple in my area that are in the 19k-22k range with less than 10k on the tachometer.

You will get approved if you have a co-signer with good credit/income. They pretty much measure your TDSR to see if you have the capacity to even sustain this purchase. Don't think of it as a car, but as a $33,000 loan. As of now, based on your current income which is fairly low, you're using about 40% of your income to sustain that loan. If you don't have any other loans, or credit, meaning you are a NS/NH on the credit bureau, then you ~may~ pass.

However, as long as you have a co-signer with good credit you should be fine. Why don't you just go and see if you get approved?

That does change things up a bit in that case. If you can try not to put the full $7k down at one time. If you can maybe do around 3-4k instead and it works out I would go that route. Good luck.

So much negativity on the forums...take a step back and try to see it from OP's pov people. OP is only 19, works 2 jobs, and saved $25K. He's young and doesn't clearly understand the hardships of life or the curve balls it may throw, but he clearly shows responsibility with a $25K cushion. He understands how credit works, which is why he's considering financing his first car at 19. Pretty sure one of his parents has to co-sign as who else would co-sign for a 19 year old? Would a parent agree to co-sign a brand new sport car for a 19 year old if they didn't think they can cover it or if the child couldn't handle it?

TL;DR, I digress...

I'm gonna give it to you straight man. From a car dealerships perspective, they will finance you simply because it's a sale for them. From a buyer's perspective, I'd be very careful as you are stretching yourself kind of thin. Here are a couple reasons why:

1. You're going to college, assuming that's what your loans are for. Don't screw up your grades because you had to work to make payments on a car. School will only get harder as you get older, especially if you're a STEM major. What if you have to quit your job during school? Worse, what if you can't find a job after graduation?

2. Social college life? Fraternity? Alcohol? Clubs? Girlfriend? ENJOY college. No point in making all that money if you have no one or time to spend it with.

3. What if you want to buy mods? (don't say no yet lol, it's addicting)

4. Do you have a quote for insurance? Not just liability, but collision/comprehensive AND gap? Won't be cheap for a 19 year old even with a clean record...unless you combine with your parents or they help pay. Btw, VERY smart to pay up front. I applaud you on understanding that concept and your ability to save enough for it.

5. Do you plan to baby your car in terms of paint/condition? What if some idiot asshole dings your door? Repairs aren't cheap. Financing your first car at 19 is a big deal so I'm assuming you're going to take care of your hypothetical new toy. You'll have to spend a lot of time on this forum researching proper cleaning methods, cleaning supplies, and how to use them. This may conflict with studying.

6. Calculate gas like everyone said.

7. Maintenance won't be cheap after the free maintenance is over.

Side note: I digress a lot when I read posts like this. I like to give everyone the benefit of the doubt and advice instead of bashing. Whatever you do, I hope you make the right choice. Hope you considered everything I said as fucking any of them up will quickly make you hate this purchase or even this car. Good luck and keep us posted.

Alright I appreciate all your guys replies and advice on whether or not I should make the purchase/loan, but I'm pretty set on my doing this. And to reply to one post, I'm not asking whether or not I can afford it, all I'm really asking is if I'm eligible to finance this car given my current situation. ***having a cosigner, paying insurance up front, and a 20% down while being only 19 years old with no established credit

But again I appreciate all the advice and will keep them in mind

When I was 18 I tried to get a credit card through a store to get a laptop for school, I was unable to get it without a cosigner. I needed $900 and was showing an income of $10,000 a year. It took my brother with somewhere around a $20k income to help me get that small credit allowance with 0% interest for 18 months. As far as obtaining the loan the dealer or bank will find a way to get the deal done.

Fast forward 5.5 years later, recent college graduate with a higher then average income with okay credit and a single solid job. I got a really good rate with zero down. I bit off more then I could chew even with the job I had. You may have your mind set on doing this but take it from those who have been through college and such.

You should really plan for your future instead of satisfying that need to have a nice new car to show up to college in. If your school is like mine was then parking is tight and door dings happen, bumpers get hit, people drag their bumper down the side of your car, people urinate on cars, get in the passenger seat drunk. Take that 7k and buy a decent car that wont make you cringe completely if someone dings your door. I did it on a car I bought for $800 and put another $1200 worth of parts into over 5 years of ownership.

The average owner probably pays what you make monthly on just housing alone. Just put everything in your parents name, it's not like everyone doesn't know already that they support you. I'm sure having wealthy parents are nice, but hopefully, you'll learn more about money management and self responsibility as you get older.

Yes you will qualify.

Fin.

I think the average owner makes what he makes in 1 month in less than 5 days :lol:

LOL hey man, it's not that one of the job doesn't suffice it's just that I enjoy one job more than the other, but like to work the other job once a week in order to keep the discount on all the clothes, cause, i am still a teen. if I kept either one of the jobs i would probably still be making the same amount which is honestly a good balance between studying(in engineering), work, and a social life.

Hey man thanks for this reply, it's nice to get some feedback like this. Currently I am a student at UBC taking engineering(going for masters degree) and my tuition is completely free(both parents work there and their benefits include free tuition for a certain amount of credits). I'm definitely not neglecting my school work in any way, hence, my limited income. I wanna keep a good balance between a social life, school, and of course work. I just feel like this decision is fair for me. I have no money tied elsewhere and although my term is 72 months, I firmly believe I can pay it off before I graduate. People say it's financially a bad move and I understand that, but they don't understand what type of situation I'm in.
My main goal in all of this is to establish good credit(paying of something I want) so that in 5 years or so I can finance a car on my own. While it's not guaranteed that I will "immediately" find a job in my field, I can assure my debt from school will be very minimal, and this debt I'm putting myself in will be gone.

If you're about to graduate, you qualify for the college grad program. You'll get 1.9% interest and 750 dollars off the car. You automatically go into the tier 1+ credit range.

Yes.

Should you?

No. Very stupid.


Very. very.

I say listen to everybody to what they are saying. Avoid the car payment and purchase a used car.

Props to you man!

You'll get into the car. They'll make it happen so that they can make 10% interest off of you. Big dealerships love working with first time car buyers.
You'll eventually understand the importance of actually affording the vehicle once it's too late and you're already committed. I made that mistake once, but I guess it's something you gotta learn for yourself.
Good luck!

EDIT: Oh yeah...the time I learned my life lesson I was making about $1,300 a month also with a $370 car payment. It looked so easy on paper...but yeah...you'll learn.

This is definitely good advice, and I have two cars with evidence. Two kids in college, two cars that look like they have been in a war zone. Parking spaces are too narrow, kids in a hurry, car soon looks like a golf ball.

Also, @Freshhprince as others have said, you will get financed one way or the other, car dealers make it work. My father-in-law is a 40 year car sales guy, I hear the stories all the time about folks with 400 credit scores getting loans at credit card rates.

If you have a cosigner its a no brainer because they don't even look at your credit at that point, they expect you not to pay and the "cosigner" is really the primary on the loan for all practical purposes.

I know i'm doing this :reposthorse: but as others have said, none of this makes it a smart thing to do. From a strict balance sheet prospective you don't have $25K in the bank. All you have is a failure to admit you have debt. The second you buy the car on a loan, you have spent the $25K, you just haven't admitted it to yourself.

My credit score is above a 700, I put a down payment of 20k on it, and I have zero other debt. I was approved for 3.13% for around 8k.

Doesn't work like that in Canada (although most dealers offer $500-1000 in grad rebate).

I wouldn't. I'd go find a Miata or RX8 in the 10k range. Pay 5k down and finance the other 5k. That way you can build credit without getting raped...

Well it certainly appears that the Op's situation changes as the thread goes on so that every argument against suddenly has a counterpoint!

Had $7000 cash then suddenly another $25000
Was making $1300 a month then $1000 then $1300 again
Doesn't buy anything EVER but keeps a job for the discount on cloths
Has two jobs but could make the same from just one
Parents paying for school Has a student loan. OH WAIT it is "free"

Got the feeling we are being played at this point!

OP if you REALY just wanted to know if you would be approved CALL THE BLOODY BANK don't post here! Half the time on here we can't all agree how much air to put in tires much less something so individual as to how a bank will deal with somebody!!!!!!!!

I know what the OP should do! He should tell his parents to buy the car and then co-sign for THEM instead of the other way around. #Balla4Lyfe

I will say you're one step ahead thinking about these things at your age. With that in mind, the best advice is to finance something inexpensive and less than four years old for two or three years and pay it off if credit building is really something you're looking into. The twins will be around and available in three years' time and you'll have a better idea of what the future holds.

The flip side is go all out. You have 25k in the bank plus your 7k down payment? Buy the car outright, pay yourself a monthly car payment w/ interest for the next six years. The interest will be better than what any savings account offers and by the time you graduate in five years you will be even and at the end of the sixth year you will have another five-six thousand in the bank.

Or a combo of the two. Finance for one year - that gives you some credit building, but then pay yourself back for the remaining five. You won't see as much extra at the end, but the result will be the same.

Since you are confident and comfortable in expecting your folks to help out should anything crazy happen - consider making the loan to yourself..