GT500 - ADM - Auto Loans

[D.Boone]

I spoke with my credit union today concerning loan evaluation criteria.

 

I am sure they follow industry standard practices, so I would expect all banks to be the same.

 

If the MSRP of the GT500 coupe comes in at $43,000.

And ADM is $20,000.

You would need $63,000 + TTL, so call it $65,000.

 

The bank will base their approval of the loan amount on the "value" of the car, which is according to their criteria,

 

MANUFACTURERS SUGGESTED RETAIL PRICE.

 

SO, make sure you have $20,000 - $25,000 in your hand, or as value in your trade, when making your loan application!

[ColdwaterHotrod]

I spoke with my credit union today concerning loan evaluation criteria.

 

I am sure they follow industry standard practices, so I would expect all banks to be the same.

 

If the MSRP of the GT500 coupe comes in at $43,000.

And ADM is $20,000.

You would need $63,000 + TTL, so call it $65,000.

 

The bank will base their approval of the loan amount on the "value" of the car, which is according to their criteria,

 

MANUFACTURERS SUGGESTED RETAIL PRICE.

 

SO, make sure you have $20,000 - $25,000 in your hand, or as value in your trade, when making your loan application!

 

 

Good, but Bad info D.Boone,

 

How about we call FORD Credit & see if they want to approve a loan for that amount? Bet they don't!

 

See I told you this Above MSRP would HURT the little guy.

 

I smell a MAJOR Petition starting to brew aimed at Ford World headquarters. Time to start calling the Major News Boardcasters everywhere to see how Ford responds to Negative Press.

 

Not Good, Not Good at all.

[mach1fever]

Three points:

 

If your financing get gap. Because if its totaled (god forbid) you will be screwed.

 

Financing: Credit Unions are a little more stringent on their rules unless they are involved in risked based lending which most smaller credit unions are not. (I am a loan officer for a multi-billion dollar Credit Union)

 

Risk: The loan is decided by lots of factors. For instance I can qualify you up to 130% of msrp which is 55900.00 assuming a 43k msrp. Now in order to have that we assess the amount of risk. This includes Debt to income ratio ( Income vs Bills Every month) Revolving Ratio (Revolving debts CC's etc vs. income) Length of membership and credit history. Bottom line is if your on the edge the Financial takes a huge risk because we will never recover the cost if we repo. So your right unless you have good credit and are low risk your going to have to come up with some dough. But if your a smart shopper you wouldn't want to pay that much interest and don't want to tie up that much income in a monthly payment and put down some money. Anything over 40 k and you are talking hefty payments.

 

Roger

[D.Boone]

I also just ran GIECO insurance's on-line quote application.

 

They list a "2007 S TS Cobra", must be for the S code engine. Or Shelby.

 

Anyway, using suggested default levels and deductibles for Arizona, insurance would be $861 per year, for me. (age 47, non-smoker, no tickets, 1 non-fault accident, non-daily driver)

 

This is not as bad as I thought, but, I am still going to call my agent and ask the same question as above.

 

Does the Insurance company base the value of the vehicle on the MSRP or what it takes to replace it (i.e. ADM value)?

[rpretzel]

Another loan option is to take out a home equity loan, as long as you have enough equity on your house. That way you can write off the interest on your taxes. That's the direction I'm leaning. I'm going to be putting down a pretty big down payment, so my loan shouldn't be all that big.

[mach1fever]

just make sure you don't go above 80% ltv so that you have a cushion and for the best interest rate. Unfortunately most people use it up and get themselves in more debt.

[rpretzel]

I also just ran GIECO insurance's on-line quote application.

 

They list a "2007 S TS Cobra", must be for the S code engine. Or Shelby.

 

Anyway, using suggested default levels and deductibles for Arizona, insurance would be $861 per year, for me. (age 47, non-smoker, no tickets, 1 non-fault accident, non-daily driver)

 

This is not as bad as I thought, but, I am still going to call my agent and ask the same question as above.

 

Does the Insurance company base the value of the vehicle on the MSRP or what it takes to replace it (i.e. ADM value)?

 

 

 

I checked GIECO for myself (Colorado), and they quoted about $1,000/yr (no tickets, no accidents, non-daily driver)

[JETSOLVER]

Another suggestion would be to use a line of credit. Mine is prime +1 and with GULP trading in my baby and that sort of financing I can take a small amount of ADM. On the otherhand I can see the first bunch in other hands as I don't want to strike a deal whereby my car sits in a showroom to generate traffic. This is the time to find a salesteam and be realistic. Let them know that you will be all over your town and people will be all over your car and you will help them sell cars. It has worked very well for me as I have gotten consideration cheques for 4 cars(2 SVT FOCUS, 1 Lightning, and a 500) just from steering them to my salesman. Remember you can't get something for nothing. So give some thought as to how you can make this a win/win.

[mach1fever]

rule of thumb do not finance over 80 ltv because of interest rate and to leave yourself an out.

 

Roger

[Five Oh B]

Here's a few thoughts from a guy with a degree in finance, who also worked in finance at our dealership for a couple years.

 

 

I can tell you that the MSRP + ADM is just like getting negative equity from a trade in rolled into a new loan. We get people all the time that owe way more on their trade ins than they're worth, who want to roll tht difference into a new car loan. We make it happen for a surprising number of them with little money down. There are banks (and a few credit unions) that will overadvance (OA) - meaning that they will loan more than the value of a vehicle (MSRP for new, blue book retail for used). Each lender has different rules as to what % they'll OA, and what credit score is required for various levels of OA. Suprisingly, Ford Credit is one of the most lenient lenders in this regard.

 

God forbid you owe $60K on a new car, total it, then your insurance company pays just $40K, leaving you to pay $20K for a car you no longer have. If you finance with any OA, please buy GAP insurance from your dealer or your own insurance company. Basically, if the car gets totalled, the GAP insurance will pay off the portion of the loan above what your insurance company would normally pay based on the value of the car at the time of the accident. I have GAP insurance currently and always buy it when I finance most of a car with little down.

 

Alternatively, you can arrange "stated value" insurance with your auto insurer. I've done this with several cars in lieu of GAP, but it usually costs more in the long run. Basically, you and your agent decide on a value that you want paid in the event of a total loss, then you pay premiums for that amount of payoff. If you say $60K, then you'll get a check for $60K regardless of the value of the car if it's totalled, but you'll be paying higher premiums than a guy who's insuring less. Much like buying life insurance - you pay more each month for higher coverages so that you can decide how much your family will receive if you die, as opposed to the insurance company telling your family how much they think your dead body is worth based on some blue book for humans!

 

This whole discussion will be a moot point for many GT500's buyers, though, as a huge majority will be buying them for cash. Now, granted, some of that cash could be coming from a home equity line, but many of the early buyers (who can afford the ADM's happening for now) are wealthy enough to just buy them outright. Of our five customers we've ordered GT500's for, I only know of one who is financing for sure, but he bought a 2003 Mach 1 from us (cash) and is using it as the down payment and he is very credit worthy (has bought and leased lots of new trucks and SUV's from us). The other guys are business owners, doctors, real estate brokers, etc. who will just write a check and be on their way.

 

I suspect that more and more GT500's will go to us working class guys as time progresses and ADM's diminish or disappear, so this topic will be relevant for more and more people going forward.

[tbl01]

"I suspect that more and more GT500's will go to us working class guys as time progresses and ADM's diminish or disappear, so this topic will be relevant for more and more people going forward."

 

Boy I hope you are correct. The working class guy always seems to get the shaft from every angle.

[owenkelley]

Another loan option is to take out a home equity loan, as long as you have enough equity on your house. That way you can write off the interest on your taxes. That's the direction I'm leaning. I'm going to be putting down a pretty big down payment, so my loan shouldn't be all that big.

 

 

 

This is what I'm going to do also, that way you don't have to insure it year round. When I'm not driving it I'll just have comp on it in case by garage burns down ( God forbid ) or something like that.

[mach1fever]

Hey thanks 5.0 B you just re-inforced everything I said. Unfortantely no finance degree but I do have an engineering degree in the works. :bandance:

[sharon]

I spoke with my credit union today concerning loan evaluation criteria.

 

I am sure they follow industry standard practices, so I would expect all banks to be the same.

 

If the MSRP of the GT500 coupe comes in at $43,000.

And ADM is $20,000.

You would need $63,000 + TTL, so call it $65,000.

 

The bank will base their approval of the loan amount on the "value" of the car, which is according to their criteria,

 

MANUFACTURERS SUGGESTED RETAIL PRICE.

 

SO, make sure you have $20,000 - $25,000 in your hand, or as value in your trade, when making your loan application!

 

 

 

That is way to much if this car if they make the car in 2008 and it still comes to 65,000 I'll be looking for something else.

[BudFord]

as per above. A loan depends greatly on a buyers ability to pay. FICA scores and debt weigh heavyly. if you are a 600 FICA or Beacon as some call it--forget buying without 50% down or more and pay 18%--if you are, say a 850 then the bank or Ford Credit or just about anyone will loan you around 130% of either cost of car or MSRP, depending on lender. So if you are an 850 Beacon then WELLS FARGO lets say will lend about $50,000 to $52,000 and about $1,000 a month for 60 months and probably $900 for 72 months.

 

So far we have only taken an order for one of the puppies and customers is just paying cash.

 

 

Bud

[mach1fever]

ohhh Wells fargo name gives me chills you know why lol