How does Exotic Car Financing Work?
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- Опубликовано: 25 ноя 2021
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So does the same thing apply to like 5 thousand dollar cars? Say I've been working at an Applebee's for a year and 2 months and are looking for a cheap but cool car and can put more than like 800 to a grand down for like a used civic or Malibu. Would I stand a chance? I forgot to say I've never even applied for a credit card before. Probably doesn't help but I don't much LoL
Scored me a shirt and a decal pack!
I watched the video just to see what you would say. Been in the car business for almost 25 years, and you described it exactly how it is. Great, honest explanation!!!
Thanks!
Why all the BS though. Why not just have honest pricing and finance without all the shell games? Honest question.
@@joshuagibson2520 Because people will shop you. When I used to sell cars, a woman was on the phone with another dealer negotiating against me as I'm trying to sell her a car. After I came back, she says to me I found the car cheaper I'm leaving unless you can match it. Both ends play games. That's the nature of the beast.
Saturn tried the whole one set price model. We saw how that worked out. People want to "feel" they are getting a good deal. All the rebates, 0% financing, discounts, etc are smoke and mirrors to make you feel you're a better negotiator than them. :o)
@@stevevlahos5469 I'm the product on RUclips and so are you. I'm not paying and being the product.
@@stevevlahos5469 sorry. I thought this was a different video on a different topic.
I wish they taught this stuff in school. It's crazy how many people don't understand any of these terms.
I've honestly learned more by watching Rob Spaghetti and Ed "The Snake" Bolian than Dave Ramsey.
Everyone should know this, but it shouldn't be the clowns that run public schools that teach it, it should be the parents.
@@SeamHead33 if you teach the kids to parent then the problem would be solved
@@SeamHead33 I really doubt the ability of all parents to accurately teach something like this. And if they could, they probably already would. It being taught in schools is about giving everyone that opportunity to learn it and learn it well enough to apply it correctly
@@Vanilla.coke1234 and I doubt the ability of teachers to accurately teach this
This is actually a great video. This couldve easily been a full lecture in a financing course.
I work as a car salesman. All of this is golden info.
I was interested to see this video, not because I’m in a financial place to afford leasing any exotic cars anytime soon but because I’m intrigued by the financial end of things. I like playing with the numbers and to hear the financial side of things is really eye opening, thanks!
Listening to Ed talk about " Configuring your loan in Advance" in the Background I thought
"Figures Don't Lie but Liars Can Figure."
Cheers Ed, Thanks for the Shwerd Loan Negotiation tips !
Thank you for explaining all this! I’ve never had a car loan since I’ve always paid cash, but now I want a C5 Z06 (not an exotic obviously) and I’ve been trying to understand the process of getting a loan so I can build my credit for future purchases.
Instagram has everyone thinking they deserve a Lamborghini 😂🤣
Nah, son. Instagram has everyone thinking that a Lamborghini is within reach if they work hard.
@@ennisgunns Whether it's in reach or not, no one ever got a Lamborghini by following generic advice they heard on Instagram or RUclips, son.
That's some dense financial 101 stuff on a friday =0 Never thought about difference between appreciation for a leased vs bought car! Thank you
I was a banker for over 15 years and speaking from experience this is an incredible video.
So what you are telling me Is I should get that Gallardo I've been thinking about
YES… life only comes once.
That's what I'm now thinking
@@SyncBoxer 911 GTRS! Go big
Very informative as usual. Thanks Ed!
I've been curious about this! Yes thanks for this kind of video!
As always, very well done Ed. Stop tempting me though! haha
I feel like this could have been a three - fifteen second video that simply repeated "Call Premier" over and over again. That said, the wisdom is always appreciated. If you're serious about getting into one of these cars, CALL PREMIER. They were awesome, took all the time to patiently answer my questions, and didn't feel too pushy or intent on selling me a product.
Also with indirect lending - the bank pays dealers a fee to use them. So the dealer is more likely to make a deal for you vs direct lending
Always appreciate the great advice in layman's terms!
Hey Ed, can you go into a little more detail about the open ended lease? In particular the process at the termination of the lease if you were to trade the vehicle into the dealer. Do you negotiate a remaining value with the lease company, then try to obtain that from the dealer (or pay the difference)? If so, does the dealer then write a check to the leasing company?
You can also take the dealer's crummy rate if they are willing to give you a better price on your trade-in or something based on the money they'd be making on the spread and then immediately turn around and refinance and pay off the loan - course the dealer's don't really like that since it costs them money when they lose their kickback. I've done it before the very first payment where the dealer rate was set ridiculously high.
I always do this and immediately pay the balance in full. I got burned many years ago by paying cash up front. After I learned how financing works I swore I'd never let it happen again. All I can figure is they don't actually pay attention to your actual credit history as long as you have a pretty shiny number with no red marks because they haven't caught on yet.
Typically if you wait a short time (90 is what I’ve usually seen) to do that, they don’t get as burned, and are more receptive to repeat business where you do that. Just ask the finance manager and they’ll tell you the hold period.
So long as you make sure there isn't a early payoff fee. Because some loans have a fee if you pay the loan off ahead of schedule to prevent people from doing this and avoiding the interest.
You are the man. Thank you for this amazing explanation.
Hey Ed @vinwiki! Great video and great knowledge you passed along! I do have a question; you mentioned if the car is 10 years old and looking at older exotics, what if you’re trying to get an old air cooled Porsche for example, is it the same route? Thanks!
Excellent vid with excellent spot on information.
Awesome content as usual.
keep it up Jim :)
The thing that has always surprised the heck out of me regarding exotic car financing -- particularly if you're *not* buying them new -- is that, after an initial hit of extreme depreciation, they flatten out and don't seem to depreciate anywhere near as much as a regular car does. So a lease, being an instrument wherein you're essentially financing the depreciation over time, can result in some astonishingly affordable monthly payments.
Of course, you don't *own* the car after you're done making the payments, but you can drive an exotic car that'd otherwise be well out of your reach, if you're willing to live with that caveat.
I'd be willing to bet that a large percentage of the not-quite-brand-new exotic cars you see on the road are financed in a manner similar to this.
I honestly hated the idea of a lease because I wanted to own the vehicle, but for exotics this really makes sense. Especially when I realized I rarely lasted more than 2 years with a car.
Thanks for making this informative and helpful video
My pleasure
@@VINwiki @12:18 How does refinancing and trade it in work?
I like to buy a car like I won a lottery 10 years ago. Wonder who told me about that.
I’ve heard that too. Wonder where 🤔😂😂
@@duke9173 sounds familiar …
When my coworkers ask how I afford my cars, I tell them I won the lottery on my 18th birthday but blew all the money. And that’s all I have left.
I know I just watched a 14 minute ad for premier financial services and I don't mind a bit. Granted I came out ahead because there is no way in the world I'll ever use them but I did get to hear Ed talk 14 minutes.
Hi Ed, if you're trying to buy a car from a private seller via Bring a Trailer or something similar, are you still looking at the same type of loan products (open-end or closed-end lease) as you would if you were purchasing from a dealership? What's different in those situations?
Yes, you can generally find the same types of loan products through a pre-approval and the banks can fund a private party seller.
@@VINwiki I haven't found this to be true. I buy most of my cars private party and have almost always had to pay cash. I recently obtained an unsecured loan because I wanted to keep as much free capitol as I could for some investments. I would love to hear what lenders are giving out used car loans, because unsecured loans typically carry a higher interest rate from my experience (even with excellent credit).
@@PaintGuy Curious, what sort of vehicles have you been buying? Also, I believe premier financial would be a good place to start.
@@PaintGuy he did state in video that 5 year old plus cars are harder to financed, maybe that’s why.
This was so helpful
Great video🙌🏾🙌🏾🙌🏾🙌🏾
Hey Ed,
I’m trying to buy a 370z during the winter months as my first car under my name. I have excellent credit and 50- 75% of the total value of the car to be able to put down im only wanting to do a smaller loan as I’m using this car to further strengthen my credit. Should I look to do a traditional car loan? Or Mabye a line of credit that I can pay back quicker would be a better solution or is there another idea you recommend? “Canadian viewer”
Hi Ed, what is your opinion of Ferrari Financial Services?
this is pretty much the best way someone ever explained how taxes and write off work, and I'm 19... This should be taught in school at age 12-19...
Does the same apply to loans with 0% from the manufacturer?
I wish they dod something like this in the uk
Ed, PJ (Exotic Car Hacks), says there are ways of getting around taxes, but if you bought an exotic under a Montana LLC for example, you wouldn’t be able to get financing under a new LLC from my experience. Would you have to pay cash? Any advice to helping with the tax burden? Especially for someone who wants to get in and out of cars every 12-18 mos.
Hey Ed, would you happen to know any exotic car financing company's over in Europe that ye would recommend?
The "previous car credit" is absolutely helping me be able to afford one of my dream cars.
3 years of hard work and on time payments
If we don't have a comparable car loan, but instead have other comparable loans on our credit (like multiple paid mortgages), would that satisfy that requirement, if say, our biggest previous loan for a car was $30-$40k and now trying to get a $200k car?
Thank you for this, only person speaking truth on how exotics actually work
I financed an r129 SL500 a few months ago......not sure if it was a financial win, but I'm enjoying it so its an emotional one.
Thanks Ed!
I saw a G63 for 184k sticker with a 100k “Market Adjustment” plus crap like wheel locks making you pay 300k for a G Class if you finance
Honestly...people WAAAAYYYY over estimate the cost and how often maintenance must be done on most exotics....and also overestimate how much has to be done at a specialty place if any at all with as little as most drive them. Also a dealer will always have a guy that knows how to mess with the app heavily to get you approved! And a dealer doesnt approve the loan, a BANK does, and the dealer doesnt make money on the bank giving you more interest. Too many dont know that as i found out selling nice cars/trucks
Great explanation.
I swear this is like the 3rd video on this exact same subject 😂
Hey Ed,
Can you talk about exotic car leasing?
Check out the Q&A we did with Mitch from Premier.
Thank you Ed..
Hi Ed I'm interested in buying a Ferrari F430 2005 model with 45K miles. Was wondering if you can help me purchase it. I have the VIN and all other info which I can share when you respond. Thanks a bunch for tentatively helping me buy my first Ferrari (a boyhood's dream).
I do not care to keep a car long enough to finance it as with a lease I can get a new car every 36 months. I learned the hard way that Maserati has the worst Lease offers, 1400 per month for 48 months plus 5K down is practically the cost of the MSRP of the original price all said and done.
Thank you sir
This was intense, need more coffee
My first car finance was $2500, second was $8500, third was $80000 with a cosigner and last one is $71000. For my next loan I’m thinking $150000 to $200k
Imagine renting Ed to accompany you on your vehicle purchase at the dealership. He would negotiate a complete victory for you.
Great Content: This is important info for a lot of us and I am sure many of us would actually like to learn something real . This 10 mins could be 30 mins - or much more. and have Math displayed .
I have had my eyes on the b7 rs4
1980’s I had a paper round earning £3 a week which was about $6 a week for 7 days a week newspaper delivery on my freestyle bmx
Selling buying Bmx’s then Motorbikes led to cars and if I want something I pay for it with money earned from deals I started doing aged 13 onwards.
When I’m driving a 911 Carrera with money I’ve invested since 1983 I’m a proud geeza
Ed
That Georgia Tech education has done you well. Very good explanation.
Ed, have you ever thought of teaching a course at a local college? You do an incredible job of making concepts understandable without gimmicks and this isn't the first time in doing so.
Ford moved hard on captive financing with the Maverick. I was able to get a Maverick 4% BELOW invoice and Ford's 1.9% rate. They did have 0% on the table for 36 month terms.
Below what they told you invoice was....
One of the most well spoken people on the internet.
which of the various tricks you teach explicitly do not work for low-end vehicles (like a 2022 base model toyota corolla cvt)
None, all pretty similar.
I think people would be shocked if they knew that the vast majority of the super wealthy use credit for their lifestyles. For example, if you have a company with share you can get line of credit based at a certain dollar to value of those company shares. And you pay that line of credit back only when those shares are sold and not beforehand. Real estate is a prime example of use debt to create wealth.
wow. thats free money lol. any other tips?
Im a Dealer and it blows my mind when people want to spend 60k on a car cash to avoid interest, a 2.9% loan is basically free money considering you can use that 60k as a down payment for a house to rent
Never spend your money if you can use someone else's. Why spend all your cash on a new vette? Borrow the money, then you have a new vette and your 80k still.
how does debt create wealth? What really is created from an iou?
I've personally seen billionaires use lines of credit to make large purchases
Thank you for explaining all of this, especially the fact that 0% APR isn’t real.
Great video. A business partner and myself are actually looking getting into the exotic car rental business. We have clientele we have warehouse space and we have funds but are still looking into the financing options like the smart lease for this. I would love the opportunity to maybe ask some questions on your previous ventures in exotic car rental.
Maybe not wise to rent financed exotic cars. I'd be looking into what insurance is going to run you on that before anything.
@@joshuagibson2520 it isn’t to bad. They will put it under ride/share or gig economy.
@@tam6011 I see.
I hope one day we can all just pay a flat 10% and do away with the games.
You go Bk yet?
Will say it again...Ed has the best voice on RUclips 😎
Travis Bell and Doug tell better stories.
"That's why I try to look like I won the lottery 10 years ago." lol! This is what I'm trying to do too lol.
This was just a 15 minute sponsorship ad? Got me good
Watching this made me think of the movie, the big short, explaining how bad mortgages were given out to people who shouldn't have them. This all based on the idea the value goes up and loaning against future value in a bubble. Creepy...
Banks are crooks.
what about that TVR ?
Can't finance them until they have a US title.
Great! But what about Canada…? :)
In my personal opinion. If you have to finance your exotic car, it may not be the best idea. Still need to factor in insurance and maintenance costs. It’s nice to have the car, but if you can’t afford to drive it …
Ed, love the channel. I worked for 2 years in the auto industry and it's crazy all the different ways a dealer will try to make money.
Well, time to get me a Rari 🤣
Buy a 2009 m6 v10 for 20.000 and do the rod barings and have just as much fun or more then any exotic car . Insurance cheaper cost to drive is cheaper and you can go 206 mph .
Ed if I may ask a question my dad is completely upside-down on his Honda and still owes over 8000 dollars on it so do you have any advice if so thank you
I have to ask. How does someone become upside-down on a Honda?
Get 10% off a new 2021 car that he wants and put a few grand down.
Hey Ed!! 🙂
I feel like this is how things are supposed to be but I've had dealers offer me loans for all kinds of vehicles even exotics and I'm not a wealthy person. I do have exceptional credit though, close to 840...
I'm still a bit confused on open ended leases. I've never leased a car before. All my cars have either been financed or bought in cash.
We did a Q&A with Mitch from Premier a few months ago. Check that out.
Ok I got the credit…I now understand what you are sharing in this video. So now how do I convince my wife to let me finance a exotic car? Where’s that video?
It was one of the first videos we made years ago.
@@VINwiki well now I just feel like a stupid ass for asking. My bad
I have a 0% loan from ford credit on my fusion.. i was lead to believe that this was only possible because i got the extended warranty.. and she only mentioned it after i agreed to it.. she did some computer stuff and said i was approved.. is this because ford made enough on the sale of the car combined with with the profit of the warranty? Like i said- she didn't use this possibility in the pitch for the extended warranty.. she only mentioned it afterwards.. so any ideas?
You didn’t read the fine print and got screwed buying the extended warranty.
Yes, at least 50% of what you paid for the Warranty was pure profit. This extra more than paid for the rate buy down to zero%.
I have a high income (200k +) and a decent credit score (720+) but here's the catch - I'm a renter not a homeowner. So I don't really have a credit history of carrying a large mortgage and in rare occasions where I do get a credit card application denied, this is cited as a reason why. How can I overcome this when looking for a 130k loan on a 2022 922?
buy a home then buy a car you have your priorities backwards
Instead of buying a house you can get duplex and then use that as leverage. The only problem I have been seeing with getting cars in your business name is who finance through. For example Ally didn’t require 6 months of business income but they were half a point higher.
@@imchris5000 Not if he or she has no interest in owning a home, the headaches that come along with that and enjoys the flexibility and mobility of renting.
Be thankful a bank is not approving you to waste $130k+ plus interest.
I would contact the sponsor he mentioned?
All I got out of this is to only buy cars that are 100 months old or more.
That is always a good takeaway.
Even the Ad says “Ed shrewdly negotiated” 😭😭 #LifeLessons
Not looking to buy an exotic car, or any new car for that matter, I just like listening to Ed. Lol.
Is £640 a month good on a 52k 360 spider with 3k deposit and a balloon after 5 yrs
Yes.
Hell yeah man hope it all goes well for you man
wait.. he didn't say "So, Now that I have explained that, What's it gonna take to get you into this car today??"
So, money brings money and cars?
I guess the debate I am having is to buy a new Corvette (which would make the wife happy) or look at something I could put together with Premier to get into an "entry level" supercar. Perhaps Ferrari 360 or Lamborghini Gallardo. But in order to make that case to my wife, I guess I would need to have a phone conversation with Premier and throw out some ballpark numbers to see what the payments might look like. I assume if I mention Ed and VinWiki they will spend some time walking me thru what my best option is ?
I once offered a dealer exactly what he was advertising the price for a car. He wouldn't let me use my bank I had to go through theirs. Apparently they got money from the bank on the loan. I walked out and purchased elsewhere. I valued my relationship with my bank.
I don’t understand, so you didn’t get the car to make sure your bank doesn’t lose business?
@@usaclaimsthemoon4198 yes. I did a lot of business with my bank.a local bank not a national brand. I always got better Interest rates and more. What dissed me the most was I was offering to purchase the vehicle at their advertised price. It didn't say anything about having to use their bank. You see ads. Imagine Walmart advertised a whirlpool washer for $299. You walk in to buy it and they say no. But if you put it on a Walmart card (at a higher rate, no early payoff etc) then we will honor the ad
@@usaclaimsthemoon4198 and I got the car. I just got it at a different dealer
@@bodygraber ah makes sense. That’s pretty cool that your bank gives you lower interest rates. I have a National bank and they give me low interest rates based on my credit, but there’s no relationship there lol. Also, glad you got the car!
@@usaclaimsthemoon4198 yes the small town banks are going away. I can remember days of picking up the phone and telling my banker "Hey I'm looking at this or that" and him saying no problem come by tomorrow and sign the papers. It was a relationship with an actual person not a name and score. Unless of course your a multi millionaire or something. They can still probably call, have lunch, etc
What’s truly funny is the majority of people who comment you should be able to pay cash for a $350k car are making payments at 17% interest on the 5.0 mustang or 370z they drive that they didn’t even put 10% down on.
I still can’t get my head around this.
I look like a middle manager "user chooser" from 17 years ago.
Tommy Vercetti outfit!?
i want to see ed call out exotic car rental company scammers
I don’t even have a phone contract. I hate anything that ties me down
And Dave Ramsey 😬. Lol
Dealers will lie and manipulate details about the cars to get loans for buyers. Claim vehicles have options they don't have. I know people who worked in indirect lending at a credit union. I heard stories about how dishonest some car dealers really are when financing vehicles for people with bad credit.
For many of us that is a blessing with good results for all. That was myself when buying my first new car in 2005. I paid it off, loved the car, and was a happy customer.
The dealership made $, the bank made money, and the automaker made money.
Is it Rob Ferretti...
Is it Rob Ferretti...
Luxury tax depending on state.