Is zero down possible?

[teacher]

0 down is probably not possible, nor should it be possible!

As far as re-writing the numbers as stated above, that probably won't work either! Most banks will lend a percentage of the retail value of the vehicle. Just saying that I sold it for $12K instead of $10K doesn't mean the retail value is any more than the $10K that it is.

A lot of people doing that with houses are getting real rude awakenings now. It is called "loan fraud."

It is used a lot when the loan is allowed to be 115% of the vehicle's value. I didn't say it was a good practice, hence why I said "lienance manager". It isn't fraud. The dealer can say they gave you a rebate for purchasing the vehicle, which you used as a down payment. It isn't a smart idea at all, but it is done all the time.

[Never_Again]

You are correct on a 115% loan, but on a 115% loan, you would not need to write it up as a $12K loan with $2K down... you would just write it as $10K loan with zero down, because the $10K is within the 115% figure. Please note my comments about the retail value above.

The dealer had better have gotten the rebate if he says so.

Furthermore, I doubt anyone short term post bankruptcy is getting a 115% loan, as most people with stellar credit are not getting them anymore. 90% of value is much more common.

[debtmonster]

Why do banks make it so easy to finance stuff for? Why don't they ask for full documentations of tax returns, W-2's, check stubs, 6 months copies of checking accounts, etc? Every time I ever financed a car, it was so easy. They should make it more difficult for people to get loaned such large amounts of money. Or not really difficult, but just show more proof that you really earn the money you say you do.

[hereforinfo]

Why do banks make it so easy to finance stuff for? Why don't they ask for full documentations of tax returns, W-2's, check stubs, 6 months copies of checking accounts, etc? Every time I ever financed a car, it was so easy. They should make it more difficult for people to get loaned such large amounts of money. Or not really difficult, but just show more proof that you really earn the money you say you do.

I'm sure you'll get your wish next time you try to finance a car or anything else.

[debtmonster]

I'm sure you'll get your wish next time you try to finance a car or anything else.

I don't mean a flat-out decline, I just mean that they approve people without any real documentation.

Why don't they put everyone through the ringer the same way they did when I got my mortgage? If the little box asks "Gross Monthly Salary" and you put in "$7,000", who's to say that you really make that?

The banks just assume that you're honest. If you truly make that, then you'll have bank statements proving it of depositing like $5,000-6,000/mo. after taxes.

[Never_Again]

A mortgage was a higher amount than a car or other consumer spending. The higher amount warranted more care in lending. Plus, Fannie Mae and Freddie Mac, who bought most of the mortgages, required this.

Many of the underwriting requirements were relaxed with mortgages when they began to be bought and sold on the secondary market as securities. That is pretty well gone now as well.

Many of the reduced documentation requirements came also with the rise of the credit score for lending decisions. That, and many people selling consumer items were looking for quicker ways to approve people, because they needed to make fast sales. And, banks and finance companies were all but to eager to oblige, as all they saw was higher profits with high interest rates, high fees, and the chance to sell more services, such as insurance on loans, refinancing homes, and debt consolidation. These consumer accounts were just a way to get a customer list for many of them.

The game has changed a great deal, and it is a good thing. We are more back to the standards that banking and credit used in the early to mid nineties.

[teacher]

Never Again - The point I was making is that there are ways a dealer can get someone financed using shady practices. I don't think it is right, but it isn't illegal. Regarding the rebate, the dealership can say they gave the customer one, which was used for the down payment.

DebtMonster: If a bank can approve you based on your credit score and debt ratios, they don't feel the need to "prove" everything else. That process would be too much work and back them up. The bad credit folks are the ones that have to provide documentation because they can't use their credit score to show their credit worthiness.

[debtmonster]

DebtMonster: If a bank can approve you based on your credit score and debt ratios, they don't feel the need to "prove" everything else. That process would be too much work and back them up. The bad credit folks are the ones that have to provide documentation because they can't use their credit score to show their credit worthiness.

That didn't seem to work out too well for them when I bought my $43,000 dollar BMW now, did it? Just because you have good credit and a job today, doesn't mean that you will continue to pay down the road. I'm living proof.

They should make it anything over like $5,000 to $7,000 or some kind of number that they ask for a lot of paperwork.

I know the car dealers would all be pissed off about this, but this would be protection for the bank.

If people can go through all that hassle for a house, it shouldn't be a problem for a car. Just make a habit of not throwing your bank statements away. Not a big deal.

[hereforinfo]

That didn't seem to work out too well for them when I bought my $43,000 dollar BMW now, did it? Just because you have good credit and a job today, doesn't mean that you will continue to pay down the road. I'm living proof.

They should make it anything over like $5,000 to $7,000 or some kind of number that they ask for a lot of paperwork.

I know the car dealers would all be pissed off about this, but this would be protection for the bank.

If people can go through all that hassle for a house, it shouldn't be a problem for a car. Just make a habit of not throwing your bank statements away. Not a big deal.

How would verifying your income have prevented you from defaulting on the bmw?

[debtmonster]

How would verifying your income have prevented you from defaulting on the bmw?

Many people exaggerate their incomes to get loans. That would stop it.

Or maybe if they stated an income, they could look at the bank statements and say that you didn't earn that income for very long.

[teacher]

That didn't seem to work out too well for them when I bought my $43,000 dollar BMW now, did it? Just because you have good credit and a job today, doesn't mean that you will continue to pay down the road. I'm living proof.

They should make it anything over like $5,000 to $7,000 or some kind of number that they ask for a lot of paperwork.

I know the car dealers would all be pissed off about this, but this would be protection for the bank.

If people can go through all that hassle for a house, it shouldn't be a problem for a car. Just make a habit of not throwing your bank statements away. Not a big deal.

Thankfully, you are the minority.

[debtmonster]

Thankfully, you are the minority.

That's not true in Miami at all. They've ran articles in the newspapers here about how everyone defaults on their Mercedes and BMW's here. Go to the repo auctions here and you'll see tons of cars like mine that were repo'd.

[teacher]

That's not true in Miami at all. They've ran articles in the newspapers here about how everyone defaults on their Mercedes and BMW's here. Go to the repo auctions here and you'll see tons of cars like mine that were repo'd.

If the problem was significant enough, the procedures within the finance companies would change.

[debtmonster]

If the problem was significant enough, the procedures within the finance companies would change.

I guess a few billion more will need to be lost. Or maybe the banks break even. We paid enough interest up front that when they sell the car, they lose almost nothing so they really don't care.

[debtprison]

The purpose of banks requiring a person to make a downpayment is not always directly related to the loan amount. Putting a hefty downpayment shows that you "have something to lose".

For anyone reading be careful with this though. There are some places which require a big down payment for no other reason than they know there is a good chance you are not going to be able to honor the agreement and they will be able to keep your down payment AND repo the car. Then they earn your down payment as profit and can sell the car the vehicle to someone else.

Be especially careful of any of these places that want weekly payments. Weekly payments = more potential for late fees and a faster opportunity to repo the vehicle.

If you go to a big place to do this I would check out places like ripoffreport.com for complaints. For example Yes/Ugly duckling/ or whatever they are called today. You won't believe how many complaints there are on them.

I strongly suggest buying a vehicle on the private market for cash. Even a clunker. Get a friend or relative who is mechanically inclined to help check it out before you buy.