The biggest problem with banks

If all it will take is saving for another month or two when you can buy it outright, it seems logical to go that route.

 

Good things come to those who wait

 

While I agree the chances of a bank actually losing money on the deal are remote, perhaps they are under other constraints you are not aware of at the moment with regard to lending.

Say you are trying to get a $100k loan to buy the $200k car. Would they rather loan $100k to you, on paper a poor credit risk, or make three $33k loans on three different cars to people with 750+ credit?

If your credit score is very low, it may make the officer have to jump through more hoops internally at the bank and they simply don't want the hassle. Or maybe they don't think that even after jumping these hoops they will get approval.

I assume you are self-employed, and it has only been 18 months or so since the money has been rolling in. When I was in your situation the bank told me 2 years worth of tax records was required, otherwise it is basically just your word, which they consider dubious if your credit is bad.

The credit score in your situation should not be discounted. It is probably the most important factor between credit score-equity-income.

 

People fail to understand how expensive it is for banks to sell stuff. Their business in not selling cars or homes, but financial intermediation. They suck at selling things.

 

Wait a couple months and the price drop and your savings account amounts will equal out.

Soon Ferrari will put out a 458 Skud type and the 430 scud will be passe.

 

Banks are purposely tight on credit right now. Add a poor credit score for an exotic type car and they're really going to drag their feet regardless of what you're putting down. I'd try to do it so you aren't dependent on them. Good luck.

 

Note: I typed this about 6 hours ago but got pulled away before I hit post. Some of it has sorta been covered already, but it's already typed so I'll just hit post.
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In general, banks do what you're asking them to do. Large down-stokes move mountains. But you're in a bit of a special case. They are accepting more risk than you think, Let's look from the lender's point of view.

(in random order)
How does a guy with poor credit suddenly come up with this much ca$h? Say it with me... Drugs. If the Feds seize it they lose everything. (not saying you're selling drugs... but from a bank boardroom point of view it's a risk)

If you came in with 110K down on a 200K house they would probably write you a lot easier. Why? Banks like houses, notwithstanding the real estate bubble, as long as the house is insured, it's going to be worth something. Even if the house burns down, the lot has value. Which brings my next point.

If your credit is bad the bank sees you as irresponsible. If you're irresponsible, you might let your insurance lapse. Let the insurance lapse on a car and "do a Dietrich" and they lose.

A Scuderia is an unknown, banks hate unknowns. Banks know houses. Banks know F-150s. I doubt the loan officer has even heard of a Scuderia.

Yes your business boomed. Can the bubble pop next month? Banks like to see 2 years of boom.

There are other reasons but I'll wrap it up with this thought. Banks are not in the car business. THE LAST thing they want is a super expensive car they have to sell.... What if you rag it? Even if you never make the first payment, it would take six months to get the car back... How much ---uninsured-- damage can you do to a $200K car in 6 months? Especially if you know it is going back? How much is a Scuderia clutch?

Then if you rag it, they have to have someone on staff with the knowledge to oversee getting it restored to a sellable condition. There's nobody at the bank with the title "Vice President in charge of Scuderia repair."
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Your point is that lending you money should be a no-brainer.

My point is that the bank has thousands of reasons not to take this risk when there are much safer bets for them to put money on.

BTW What business are you in? That might make a big difference to the bank too.

 

Yep I'd say the biggest risk is if you drive it into a ditch.
Also, in the event of a government seizure aren't the lenders protected?

 

As others have stated, banks are in the business of making money. They make the most money, and protect their account holders best, when they do things to make money that they are most familiar with. My wife works in a regional bank and one of my biggest clients is another bank. I am very impressed with their knowledge of finance and making money. They both make money by lending money to people who pay it back. They love to make money from people who have other relationships with them through their business or other financial transactions.

Banks dislike making loans to people they don't know or can expect to have little other financial interaction with. Banks will sometimes make allowances for new customers who they have a reasonable expectation with doing more business with if they treat them right. In other words, make allowances to attract other business from the client that they currently have at a competitor bank.

You would probably have a better chance of getting a loan with the bank where you do your business banking. One-time only attempts to borrow money from a highly-focused lending institution, such as Ferrari Financial, will be met with poor results if you have spotty credit no matter how familiar the lending institution is with your collateral.

I am glad your business is booming in this economic climate, you are truly fortunate. Why not go your business bank?

 

The government (DEA, ATF, FBI, city and state police, etc.) are notorious for unlawfull siezure and it is impossible to get your stuff back even after you have been proven innocent in a court of law. They dont care if someone else ownes it or has a lien on it.