BMW Financial Services issue

[JordanEG6]

So I was extremely close to closing a deal this afternoon for a 2008 335i at Calgary BMW. Signed everything and they submitted my credit application and it was denied.

Some background:
- my credit is good
- most, if not all, of my entire load of debt is paid off
- no other leases/finances/leins on any other car
- I made a $3500 down payment on a fucking LEASE
- I make enough money
- I don't own a house or anything else to put me into the hole

I applied to put it under my incorporated business for tax purposes and so that it doesn't affect my personal credit. Since I've been only incorporated for less than 1 year, they denied me approval without not only 1 but 2 co-signers!?

So they said I need to co-sign seeing as I'm president and director of my company and then I need another co-signer.

Another option is a post secondary graduate program, where my interest rate would go down however, I need to provide proof of diploma and an additional upfront multiple security deposits totalling $9000!!!! WTF!? I get it back, but where the fuck am I going to scrounge up 9 Gs on the spot without touching my LOC which is already paid off?!

So my question is, is there any way around this? Are they dicking me around? This is unheard of on my end. I can afford the car, my credit is good, debt is paid, I made a deposit and everything so I don't see a problem with them approving my application. Also if I co-sign, will it affect my personal credit? Mind you this is a huge concern because I'm a contractor and I plan to buy property in the near future and I don't want this car messing up my chances of getting a decent mortgage approval.

Any ideas on how I can go about this? Any way around it?

[Weapon_R]

Why would they be dicking you around? Their goal is to sell vehicles. They wouldn't deny you the car if they thought you could afford it.

[JordanEG6]

Originally posted by Weapon_R
Why would they be dicking you around? Their goal is to sell vehicles. They wouldn't deny you the car if they thought you could afford it.


That's the problem, I don't see why they would deny me based on the background info they already know.

Can I lease through another company other than BMW Financial?

[max_boost]

Don't put it under your incorporated business or find two co-signers?! :dunno:

[max_boost]

Originally posted by JordanEG6



That's the problem, I don't see why they would deny me based on the background info they already know.

Can I lease through another company other than BMW Financial? Yes you can but you aren't going to get a 57% residual and 3.9% lease rate!

[JordanEG6]

Originally posted by max_boost
Don't put it under your incorporated business or find two co-signers?! :dunno:

If it affects their credit, they won't be willing to co-sign. As for incorporated business, I want to be able to write it off and put it under a name that doesn't affect me personally.

[max_boost]

That leaves you 1 option, scrounge up the $9000 or no 335i for you!

[C4S]

It doesn't matter if BMW or Benz or Accord ..

All credit application .. go to credit bureau ..

Well .. it is funny .. it is Canada .. sometimes .. people with only $3K a month .. can approve a $80K car .. sometimes .. people make 6 digit income .. can't get a SEARS card ..

Sometimes, it is hard to say " my credit is good "

I think my credit is good .. untill I apply for mortgage .. even some late payment I made on fido .. (their fault !) it hurts my credit !!

:dunno:

[cocoabrova]

So if you applied for the loan personally (not under the business name) then you'd most likely be approved?
Applying as a business that doesn't have any or little credit history is just as bad as having shitty/bad personal credit. I'm assuming that your numbered company hasn't had a lot of activity credit-wise being that it's only been incorporated for under a year, so I would just buy the car personally.
At the same time, I would start applying for a couple of small credit accts. like a Staples card/Canadian Tire card or something (as your company) so as not to run into this prob in the future....

[finboy]

i guess bmw canada doesn't think you are smart enough to drive their cars :dunno:

[benyl]

Sorry to say, but you are doing this all wrong.

1. Go buy a house first. It doesn't show up on your credit. It is way easier to buy a house first then get a car. Getting a car first will severely limit what kind of a house you can buy. Stupid, but that is the way credit works.

2. Do not buy the car under your numbered company unless you drive around for a living. It will be considered a taxable benefit. Lease the car under your name and then charge the company for any business related mileage. You also have to keep a log book. Any mileage that you drive for personal reasons is taxable. Talk to you accountant about this.

3. The reason they denied you is that your company has worse credit than an 18 year old kid. It has been around for less than a year and the credit bureau probably doesn't even have a score for it. BMW FS isn't to blame, it is the finance office of the dealership you are dealing with. They should know all this.

4. Putting $3,500 down on a lease does not make any financial sense. If you can't afford the payments on a zero down, you should get a car with less options or downgrade.

[rage2]

Originally posted by benyl
Sorry to say, but you are doing this all wrong.

1. Go buy a house first. It doesn't show up on your credit. It is way easier to buy a house first then get a car. Getting a car first will severely limit what kind of a house you can buy. Stupid, but that is the way credit works.

2. Do not buy the car under your numbered company unless you drive around for a living. It will be considered a taxable benefit. Lease the car under your name and then charge the company for any business related mileage. You also have to keep a log book. Any mileage that you drive for personal reasons is taxable. Talk to you accountant about this.

3. The reason they denied you is that your company has worse credit than an 18 year old kid. It has been around for less than a year and the credit bureau probably doesn't even have a score for it. BMW FS isn't to blame, it is the finance office of the dealership you are dealing with. They should know all this.

4. Putting $3,500 down on a lease does not make any financial sense. If you can't afford the payments on a zero down, you should get a car with less options or downgrade.
haha couldn't have said it better myself :rofl:.

#1 very true, I was deep into cars before I bought a house. 2 leased Benz's. I needed rich co-signers and retarded down payment to get a mortgage.

#2 is very important, especially if you've been audited before (like myself lol).

#4 never put any money down on a lease, unless the interest rate is high and residual is favorable to you (meaning the car will be worth a lot more than that # after the lease). That's usually only the case with 3rd party leasing companies.

[Mr_ET]

also 3500$ down on a car that sells for over 60K is really not that much money so 9K seems fair to secure things from their end.

[civicluva]

Originally posted by JordanEG6

- I made a $3500 down payment on a fucking LEASE

bud that's nothing. I put down 8k on my 350Z and its a lease.

[rage2]

Originally posted by Mr_ET
also 3500$ down on a car that sells for over 60K is really not that much money so 9K seems fair to secure things from their end.
At 3.9% rate, you can easily make more than 3.9% with that $3500 in your pocket. Hell you can dump it into any higher interest debt that you might have and still be ahead!

[rage2]

Originally posted by civicluva
bud that's nothing. I put down 8k on my 350Z and its a lease.
I feel sorry for ya... :rofl:.

[Mr_ET]

Originally posted by rage2

At 3.9% rate, you can easily make more than 3.9% with that $3500 in your pocket.

I'm not saying I would put any money down ;) , just that what they are asking makes sense since there is no real history for his company.

Maybe it's time to look at a 325i or something like that.

[rage2]

I think the problem is that he's using an unestablished company to buy the car. That's not the right way to do it. He needs to sit down with an accountant (or better accountant) to figure out how to get everything managed properly. That's assuming he can afford the car personally.

[JordanEG6]

Originally posted by benyl
Sorry to say, but you are doing this all wrong.

1. Go buy a house first. It doesn't show up on your credit. It is way easier to buy a house first then get a car. Getting a car first will severely limit what kind of a house you can buy. Stupid, but that is the way credit works.

2. Do not buy the car under your numbered company unless you drive around for a living. It will be considered a taxable benefit. Lease the car under your name and then charge the company for any business related mileage. You also have to keep a log book. Any mileage that you drive for personal reasons is taxable. Talk to you accountant about this.

3. The reason they denied you is that your company has worse credit than an 18 year old kid. It has been around for less than a year and the credit bureau probably doesn't even have a score for it. BMW FS isn't to blame, it is the finance office of the dealership you are dealing with. They should know all this.

4. Putting $3,500 down on a lease does not make any financial sense. If you can't afford the payments on a zero down, you should get a car with less options or downgrade.

Good advice. I have talked to my mortgage broker before, and I know it is much wiser and easier to buy the house first, which something my broker also told me to do. But if I could lease through my company without affecting me, personally, I didn't see it as too much of a problem to lease a car first then get a house later in the near future. But because of this credit issue with the company (needing me as a co-signer OR signing it under my name personally), it won't be that way. Lesson learned.

Also, I can make payments with a 0 down, thats fine. That is actually what it is. The $3500 is the total start-up upfront costs, which I gave them a cheque for already.


Originally posted by rage2
I think the problem is that he's using an unestablished company to buy the car. That's not the right way to do it. He needs to sit down with an accountant (or better accountant) to figure out how to get everything managed properly. That's assuming he can afford the car personally.

Correct. It's not that I can't afford the car, it's the companies credit that is the problem.

I guess I'll continue house hunting instead, which was what I was doing in the first place. I was just only trying to see what other options are there regarding lease/finance/motgage situations.

[benyl]

Originally posted by Mr_ET
also 3500$ down on a car that sells for over 60K is really not that much money so 9K seems fair to secure things from their end.

One of the rules in leasing is that for every $1,000 you put down, it drops your payment by about $20.

So, with $3,500 down, he is saving let's say, $70 / month on his payment.

BMW really only does 36 month leases.

$70 X 36 = $2,520.

So he is paying $3,500 to save himself $2,520 over 36 months. Does that make sense to you?

[yobi5888]

For those of you who already bought a 335, was there any room for negotiation on the price at all?

Or everyone was just paying MSRP?

[benyl]

There is room.

[mekeni]

Originally posted by benyl

1. Go buy a house first. It doesn't show up on your credit. It is way easier to buy a house first then get a car. Getting a car first will severely limit what kind of a house you can buy. Stupid, but that is the way credit works.




:werd:

[rc2002]

If you tried this a couple of years ago, it would've been no problem. Credit getting a lot tighter with all the bad loans in the US and Canada.

Your best bet is to buy it under your name, not your company's.

[rage2]

Originally posted by richardchan2002
If you tried this a couple of years ago, it would've been no problem. Credit getting a lot tighter with all the bad loans in the US and Canada.
Really? When I leased my GTI last week, they asked for my name, address, place of work, position, and yearly salary. Didn't give my SIN # or nothing, and they just approved me after photocopying my drivers license :rofl:. I just paid first and last month lease payments and I was out the door with a GTI.

I thought they just gave out car loans to everyone haha.

[civicluva]

Originally posted by rage2

I feel sorry for ya... :rofl:.

ya i know don't remind me

[blownz]

Credit is tighter, especially for companies.

Cerberus has really locked up Chrysler Financial and GMAC when it comes to businesses, not personal though like above.

[max_boost]

Originally posted by benyl
Sorry to say, but you are doing this all wrong.

1. Go buy a house first. It doesn't show up on your credit. It is way easier to buy a house first then get a car. Getting a car first will severely limit what kind of a house you can buy. Stupid, but that is the way credit works.


The house shows up on the credit bureau now! The house I bought in fall 2005 isn't there but the one I co-signed for my sister last summer is on it. Otherwise :werd: to the rest of your post.


Originally posted by rage2

Really? When I leased my GTI last week, they asked for my name, address, place of work, position, and yearly salary. Didn't give my SIN # or nothing, and they just approved me after photocopying my drivers license :rofl:. I just paid first and last month lease payments and I was out the door with a GTI.

I thought they just gave out car loans to everyone haha.

They probably just matched up the info and looked at your beacon score and approved you. It usually does take 5 minutes unless you have real bad credit!

[benyl]

Originally posted by max_boost


The house shows up on the credit bureau now! The house I bought in fall 2005 isn't there but the one I co-signed for my sister last summer is on it. Otherwise :werd: to the rest of your post.

Somebody correct me if I am wrong, but co-signing is different as it is not your principal residence. It does show up. Principal residence mortgages should not.

Co-signing a mortgage is one of the worst things you can do for your credit report.

I would try to get out of it ASAP!

[max_boost]

^^^

I took a HELOC on my principal residence and that shows up as well.

Sorath was trying to obtain a loan and got denied because of his mortgage. Reference this thread: http://forums.beyond.ca/st/212775/loans/

[benyl]

HELOC is not a mortgage.

I checked my credit report last month and there was no mention of my mortgage.

[rc2002]

Originally posted by blownz
Credit is tighter, especially for companies.

Cerberus has really locked up Chrysler Financial and GMAC when it comes to businesses, not personal though like above.

http://messages.finance.yahoo.com/Stocks_(A_to_Z)/Stocks_W/threadview?m=tm&bn=19829&tid=38728&mid=38728&tof=16&frt=2

It affects personal buying too. Considering auto loans make up more of the ABCP than house mortgages in Canada, the tightening up of credit for car loans is actual quite real.

http://www.bmonesbittburns.com/economics/focus/20070831/feature.pdf

[blownz]

^ I only really know about Cerberus and their control over CF and GMAC. But for businesses their finance rates are as high as 20.25% It is crazy. It is true they aren't approving as easily for personal car loans as well, but they aren't jacking the rates nearly as high.