Financing Question

[WishBone33]

I just sold my car today to use as a down payment for a 135i. I havent ordered one yet nor have i applied for financing from any instutions yet. I was planning on applying at PenFed because it seems they have the lowest rates right now. Question is.... should i apply for financing before ordering or after?? I ask because i have read that the 4.25% financing rate is only good for 90 days and im sure that ordering a 135, it will take much longer than 90 days to arrive. You can't really put one institution against another for the best rate if you apply and then you cant use the money you've been approved for right?? Can someone explain the whole process of ordering a 1 series and paying for it?

[Dan203]

I've had a hard time getting a straight answer on this, even from PenFed. Someone on here told me that you apply for the loan and get pre-approved for up to the amount entered for 90 days. And then when you're actually ready to buy the car you simply contact PenFed and have them overnight you a check for the amount you need. However the text on their application makes it seem like the check is going to be issued right away for exactly the amount you requested and your payment will start 60 days after approval. I contacted PenFed and asked for clarification and they said I need to apply for a "pre-approved draft", but I don't see that option anywhere on the site. So I just wrote back again asking for more clarification. Hopefully this time I'll get a straight answer that will explain how to apply for a "pre-approved draft" via the website.

Dan

[WishBone33]

Yeah..... it all sounds very confusing to me. If anyone that has used PenFed could help us out, it'd be much appreciated

[amybang]

YMMV, but my dealership matched my lowest financing when I ordered (which I think was 4.29%, but I'd have to look it up). They said my rate was guaranteed until the car arrived, and that if rates got better by then or there was a special, they'd re-evaluate.

amy!

[WishBone33]

So you should apply for financing BEFORE you go and order the car correct?

[mastermav]

It depends on your financial situation. It is probably good idea to check, if you doubt that you can get a loan at all, but other than that I wouldn’t worry much. In my case, I’m sure bank will be more than happy to give me loan as I'll be paying interest. It is a matter of the rate now.

[amybang]

Originally Posted by WishBone33

So you should apply for financing BEFORE you go and order the car correct?

You don't pay for the car until you take delivery, you only need to give them a deposit. With "6-8 weeks" of waiting time, you can shop around. Have the dealer make you a financing offer. Look online, check your bank rates. If that turns up something lower, ask if the dealer can match.

amy!

[gio]

I think the best idea is to get a copy of your credit report and check your credit score so you know what kind of rate you can get on your loan. Then order the car and sometime right before it is ready, apply for loans at a variety of places and perhaps also with the dealer. If the credit inquiries are all within the same week, they only count as one inquiry on your credit report which won't drop your score as much as if they are spread out.


I think it is best to wait as long as possible to apply because if you have debt you'll have more time to pay it off, raising your score, and if you have negative marks like late payments on your report they will be older and could possibly cause your score to go up. It won't mean much for most people though unless you are borderline.

I had never heard of PenFed, but I looked it up and found out I am eligible to join through my father (who works for the army). Their rates seems to be pretty decent. Do you know what kind of credit score they require to get the best rate? I'm going to apply in the next few weeks and I'll apply for a loan with them too.

[Dan203]

My dealer ran my credit when I ordered the car and told me that my score was in the top 2%, so I should have no problem getting the lowest rate available from any bank. The only thing I'm having trouble with is figuring out how the PenFed application system works. I want to get pre-approval so that I can have them on hand if needed, but I also want to give my dealer a chance to beat the APR. Basically I want as many options as possible so I can get the best rate available.

Dan

[WishBone33]

These all seem to be good ideas but i havent found anyone lower than PenFed so like gio said, does anyone know what kind of score you need?? Dan203, i too am wondering about the pre-approval process. If you find out, please let me know

[Dan203]

I will let you know as soon as I hear back from them. I already paid the $25 to open an account with PenFed so I'm definitely going to apply for the loan one way or another, even if I don't end up using them.

Dan

[WishBone33]

yeah i just became a member and opened up an account so i'm going to try to get a loan too.

[WishBone33]

no one else has anything to add to this thread?

[JasonCSU]

Here is my experience so far:

Put a deposit on the car back in October.

Put the order through in the end of January.

Decided I wanted to do European Delivery, and requested a date in mid May.

The request was approved, but things get tricky with financing. Financing through BMW FS is easy, but they were only offering 6.5%. Some banks won't finance Euro Delivery cars, and some don't care, but just require the VIN before cutting a check. The car has to be paid for about two weeks before your delivery date, but due to the production schedule, the VIN doesn't become available until about 3-4 weeks before delivery.

I heard about PenFed's rate and decided to open an account in mid April. After opening my account online, I immediately applied for a loan.

A day or two later, I received a call that my loan was approved, but would need the VIN. I didn't have it yet, and they said no problem, just call back when you do.

I received my VIN a few days ago and informed PenFed. The check is now in the mail.

I imagine the experience should be similar for most of you. Unfortunately, I don't know anything about the 90 day period that someone mentioned before.

[WishBone33]

what kind of credit score did you have?

[JasonCSU]

Originally Posted by WishBone33

what kind of credit score did you have?

802, so getting the 4.25% was no problem. I could of also had the 3.9% on a 3 series through BMW FS if I wanted.

[Dan203]

Here is the reply I got from PenFed...

When you start the application process, you will click on New Vehicle. One of
the first questions asked is if you want a preapproval. You would input a Y if
you do. Often, we can issue a preapproval draft that is valid up to the amount
you request. If you use a preapproval draft, you will input the exact amount of
the purchase price, the vehicle details, and the name of the dealership/person
you are purchasing the vehicle from. Then sign the back of the draft. The person
you give it to will deposit it to their account. When we receive the negotiated
draft back, we establish a loan in the amount of the purchase.

After you submit the application, just give us a call and we can update the
information to show that you do not want the loan disbursed until you call us
and tell us to send the draft. We can issue a preapproval letter if you need one
for the dealership.

Please note, loan applications are valid for 90 days. The rate you receive will
be whatever rate is in effect on the day we actually disburse the loan. So you
would not be guaranteed our current rate. It is only valid through April 30. We
have not yet heard if it will be extended. If you need further assistance,
please contact us.

I don't see the "pre-approval" option, do you? Maybe I need to log-in via IE instead of Mozilla.

Dan