Car loan application as a retiree

[PaunchyPirate]

I’m doing a bit of a Blow-That Dough in a couple weeks by buying my first “luxury car”. After rolling in my trade in, taxes, fees, etc. I’m expecting about a $40k amount due.

I can easily pull this money out of savings to buy the car. Not a problem. But I’m guessing the dealer will want a cashier check and I won’t know the exact amount until I go in and negotiate the deal. I live 2 hours from the dealer, so I can’t just go down the street to get a check.

I’m thinking of just putting $10k down (a fixed amount that I can either bring a cashiers check or they may accept a personal check for that lower amount) then finance the rest at whatever rate I can get. I’ll still probably pay it off almost immediately.

My question. I have no earned income. My actual retirement income is not all that high. I keep it low to get ACA subsidies. So if I have to show a tax return that will only show $62k for 2023. My credit scores are a little above 800. The credit applications I have filled out in the past ask you to enter a monthly income. If I put $5000 per month + have a 800 credit score, is that going to get me a loan as a retiree? I hate to have to reveal the size of my investment accounts and I don’t think they can enter that into the computers that decide things.

What other approach would you suggest? I thought about asking to come in a few days before my car is scheduled to arrive (it’s in transit)to hammer out the finances so I can have an exact number for a check or I will know if the will finance it. When you roll in the typical advice to not reveal you will pay cash until you get in the finance office, I can’t figure out the best strategy.

I hate buying cars. Unfortunately, I have a history of doing it every 3 years. You’d think I’d be better at this.

Any advice based on my rambling thread?

 

[Jerry1]

You'll get a loan. Don't worry about it. Your credit score will do a lot and while your income may not be high, you also don't have other loans, like a mortgage. ON top of all that, the car is collateral. They will sell to you in a heartbeat.

 

[mn54]

do not drive 2 hours to the dealer until you have a firm out the door price. get the best OTD price from this dealer and any other dealers in your area. do not negotiate the price at the dealership.

 

[freedomatlast]

Put as much as you can on a 2% cash back credit card. They usually allow $5,000. What you don't finance, write a check. No need for cashier's checks.

MN54 is right. Do not drive to the dealer until you have a firm out the door price on the vehicle without the trade in the equation.

They'll lowball you on the trade, so walk toward the door as many times as you have to, to get what you want. Get a price on the trade from Carvana and CarMax ahead of time so you know what it's worth to another dealer.

If you're going to finance, unlock your credit ahead of time or be prepared to do it at the dealer.

Have your mind made up ahead of time before you go into the F&I office whether you are going to finance and whether you want an extended warranty and stick to your guns. Don't tell them ahead of time what your plans are on financing and extended warranties, prepaid service plans and all the other stuff they may try to push on you during the sales pitch in the F&I office.

You lead all the conversations and don't let them talk you into anything you don't want. Have your mind made up ahead of time that you will walk without hesitation if they won't give you the deal you want. And, have fun with it and keep a sense of humor while negotiating. Don't be afraid to laugh if they propose some ridiculous deal.

 

[PaunchyPirate]

do not drive 2 hours to the dealer until you have a firm out the door price. get the best OTD price from this dealer and any other dealers in your area. do not negotiate the price at the dealership.

Easier said than done. I have a locked in price for the vehicle thanks to being a Ford Partner retiree. What I don’t have is the amount they will offer for my trade in. I won’t get that until they see the car.

 

[PaunchyPirate]

Folks, I’m not really looking for tips on getting the best price. I know how to get a price I’m comfortable with. I’m looking for tips on how best to pull it off.

 

[PaunchyPirate]

Put as much as you can on a 2% cash back credit card. They usually allow $5,000. What you don't finance, write a check. No need for cashier's checks.

They'll lowball you on the trade, so walk toward the door as many times as you have to, to get what you want. Get a price on the trade from Carvana and CarMax ahead of time so you know what it's worth to another dealer.

If you're going to finance, unlock your credit ahead of time or be prepared to do it at the dealer.

Already have the Carvana, CarMax and KBB trade in values.
The last time I tried to write a big check, they gave me a rough time. We had to call the local bank together and I had to prove to them who I was so that the bank could verify there was enough money to cover the check. I’d rather not go thru that again.

 

[freedomatlast]

The last time I tried to write a big check, they gave me a rough time. We had to call the local bank together and I had to prove to them who I was so that the bank could verify there was enough money to cover the check.

If you're a repeat customer, that shouldn't be an issue. I wouldn't put up with that. I'd be out the door and on my way to the next dealer.

 

[GrayHare]

I'd bring a few thousand in cash to cover the uncertain dollar amount, with a credit card available for any extra.

 

[PaunchyPirate]

If you're a repeat customer, that shouldn't be an issue. I wouldn't put up with that. I'd be out the door and on my way to the next dealer.

I wasn’t a repeat customer then and I won’t be a repeat customer this time either.

 

[Drake3287]

As long as you have a high credit score the dealership will be happy to take a personal check. People with an 800+ credit score are golden to them. I also agree about using your credit card for as much of the downpayment as you can. You can't beat reward points.

Instead of a loan this is what you do. Buy the car along with obtaining a loan from the dealership. You'll nearly always get a better price on the vehicle if they know there's money to be made from the loan itself. Never pay cash for a vehicle, worse mistake you can make.

After the first or second payment arrives simply pay it off in full from your savings. Then, simply pay yourself back the each month instead of sending a payment for the car loan. By giving yourself a loan and paying it back you'll be saving a ton of money.

 

[1242Vintage]

Last time we bought a car let them know I will be financing it. Got a good price and paid $20k and financed remaining $30k. They don’t ask for income, just a few details for the credit app, that’s it. Paid it off after the first couple payments.

Credit score was 800+. The loan app knocked the score down for a couple months but came right back up.

 

[jazz4cash]

I don’t think you will have any problem getting spproved with your income if you have a relationship with a bank or credit union. My credit union provides a voucher which is not to exceed the loan approval amount. If you want to write a check will your bank offer a balance letter or certify the funds somehow?

 

[frayne]

I’d see if they would take a personal check.

 

[mathjak107]

Put as much as you can on a 2% cash back credit card. They usually allow $5,000. What you don't finance, write a check. No need for cashier's checks.

MN54 is right. Do not drive to the dealer until you have a firm out the door price on the vehicle without the trade in the equation.

They'll lowball you on the trade, so walk toward the door as many times as you have to, to get what you want. Get a price on the trade from Carvana and CarMax ahead of time so you know what it's worth to another dealer.

If you're going to finance, unlock your credit ahead of time or be prepared to do it at the dealer.

Have your mind made up ahead of time before you go into the F&I office whether you are going to finance and whether you want an extended warranty and stick to your guns. Don't tell them ahead of time what your plans are on financing and extended warranties, prepaid service plans and all the other stuff they may try to push on you during the sales pitch in the F&I office.

You lead all the conversations and don't let them talk you into anything you don't want. Have your mind made up ahead of time that you will walk without hesitation if they won't give you the deal you want. And, have fun with it and keep a sense of humor while negotiating. Don't be afraid to laugh if they propose some ridiculous deal.

just tried to use a credit card at lexus and they capped it at 3500.

i took the lexus credit card in advance which gave 5% back when used at lexus .

but they didn’t know which card i would use when they said it’s capped at 3500.

make sure you look in to that brands credit card first as they usually offer much more in points at a dealership

 

[freedomatlast]

I wasn’t a repeat customer then and I won’t be a repeat customer this time either.

My apologies. When you said, "The last time I tried to write a big check, they gave me a rough time. , I thought that meant that you were down this road before at the same dealer.

 

[braumeister]

But I’m guessing the dealer will want a cashier check

I'm surprised, but maybe that's a regional thing. I've always given the dealer a personal check and then driven away, never a question about it, even for tens of thousands.

 

[wrigley]

I just recently wrote a personal check for 30k at a dealership with no problems at all.


Mike

 

[mathjak107]

only bank checks here in ny . i buy a car every 4-5 years and no matter what dealership i used its always bank check only

 

[Aerides]

Last time I bought a car I put $5k on the CC (the most they would allow) and wrote a personal check for about $23k.

Never considered getting a loan, and that's when rates were nothing. No need to mess with it. Just don't talk financing until you get the price you want.

Oh and if they give you a hard time, you just get up like you're going to leave. They will find a way to take your money, don't worry.

 

[LateToFIRE]

I'm really surprised at all the comments stating that a dealer would allow you to write a large personal check and drive away with the car. That has not been my experience - maybe regional differences. They'll take a personal check but you don't get the car until funds have cleared. More common, they'll take a certified bank check (i.e. cashier's check) and allow you put a certain amount on your credit card - I've done up to $10K on AMEX. Probably best to let the CC folks know you'll be doing that in advance, but I've had no issues. Agree with everyone who says get the final price before you arrive, but OP says they won't know the value of the trade-in until they arrive. My advice: arrive with cashiers check for an amount minus the best trade in value you could expect. Put any balance on your CC. I wouldn't bother with the hassle of financing unless you really do want a car loan.

 

[LateToFIRE]

only bank checks here in ny . i buy a car every 4-5 years and no matter what dealership i used its always bank check only

+1, same, bank check + credit card up to ~$5K-$10K (I like getting the points)

 

[braumeister]

I'm really surprised at all the comments stating that a dealer would allow you to write a large personal check and drive away with the car. That has not been my experience - maybe regional differences.

The surprise goes both ways. I've done that for decades, in New York, California, Colorado, Illinois, Maryland, and Ohio. No dealer has ever blinked an eye at my personal check for tens of thousands. Maybe I just have an honest face?

 

[folivier]

I've never had a problem writing a personal check for a new car purchase. Last summer wrote a check for just under $50k and drove the new car off. Took about 2 hours for everything and we were on the road. They will have checked out your credit so unless you have bad credit should take a check.
The finance guy didn't even try to sell us a loan or other items.

 

[Aerides]

The surprise goes both ways. I've done that for decades, in New York, California, Colorado, Illinois, Maryland, and Ohio. No dealer has ever blinked an eye at my personal check for tens of thousands. Maybe I just have an honest face?

And if someone has a fico over 800, a credit card that takes $5k without blinking, the odds they are going to stiff you on a check seem stupid low. I'm sure most dealers can quickly ACH it, or verify funds.