Automotive

Signed contract but 0% financing turned down due to no income but with excellent credit score. Contract still binding?

  • Last Updated:
  • Aug 23rd, 2021 8:51 pm
Deal Fanatic
Sep 1, 2004
9592 posts
9092 upvotes
macdonlg wrote: I don't understand...you want a loan, have a great credit score but have no income and have not worked due to C-19...how are you planning on repaying the loan?
He could be cash rich.

While he ain't foreign, an immigrant from HK would typically carry $3M CAD with them when the sold their 800sqft apartment but have 0 credit and 0 income when they 1st landed in Canada.

Not going deep into cash vs finance vs lease.... it's very personal depends on how one handle their finances.

For example. Vanguard CDN all cap ETF has gained 24% yoy. If you can take a 0% loan and keep the cash in that ETF, you will be way ahead.

Now of course there are always outliers like that Pathfinder rebate. But 1) who want that shitty CVT and 2) the only cars that need rebate to move are cars you don't really want anyway. And there are always negative outcome when it comes to investment, so YMMV.
Sr. Member
May 22, 2007
509 posts
313 upvotes
cambridge
Xtrema wrote: He could be cash rich.

While he ain't foreign, an immigrant from HK would typically carry $3M CAD with them when the sold their 800sqft apartment but have 0 credit and 0 income when they 1st landed in Canada.

Not going deep into cash vs finance vs lease.... it's very personal depends on how one handle their finances.

For example. Vanguard CDN all cap ETF has gained 24% yoy. If you can take a 0% loan and keep the cash in that ETF, you will be way ahead.

Now of course there are always outliers like that Pathfinder rebate. But 1) who want that shitty CVT and 2) the only cars that need rebate to move are cars you don't really want anyway. And there are always negative outcome when it comes to investment, so YMMV.
If this was the case he could easily use that as collateral with the bank. Clearly he has not been able to satisfy the lender(s) that he is able to pay the loan back along the payment schedule.
Deal Fanatic
Sep 1, 2004
9592 posts
9092 upvotes
macdonlg wrote: If this was the case he could easily use that as collateral with the bank. Clearly he has not been able to satisfy the lender(s) that he is able to pay the loan back along the payment schedule.
Banks ain't giving out 0% loans. And car manufacturers ain't banks.
Sr. Member
May 22, 2007
509 posts
313 upvotes
cambridge
Xtrema wrote: Banks ain't giving out 0% loans. And car manufacturers ain't banks.
Exactly!
[OP]
Jr. Member
Oct 29, 2011
149 posts
16 upvotes
Ontario
macdonlg wrote: I don't understand...you want a loan, have a great credit score but have no income and have not worked due to C-19...how are you planning on repaying the loan?
Buying time. Not going to go unemployed forever...
[OP]
Jr. Member
Oct 29, 2011
149 posts
16 upvotes
Ontario
macdonlg wrote: If this was the case he could easily use that as collateral with the bank. Clearly he has not been able to satisfy the lender(s) that he is able to pay the loan back along the payment schedule.
Or... conspiracy theory, dealer wants a cash transaction and be done with it.
Sr. Member
May 22, 2007
509 posts
313 upvotes
cambridge
whizzard wrote: Or... conspiracy theory, dealer wants a cash transaction and be done with it.
Depending on the lender the dealership may actually prefer a loan arrangement as they get a "significant" kickback so doubt it is that. Put it this way - some random dude knocks on your door and says I am not currently employed and have not been for some time, but these 10 guys can vouch for me as I have paid back their loans in the past. I'd like to borrow a lot of money from you - would you do it without asking anything from them in terms of collateral?
Deal Fanatic
Sep 1, 2004
9592 posts
9092 upvotes
whizzard wrote: Or... conspiracy theory, dealer wants a cash transaction and be done with it.
No. Financing arm of the brand deem you are too risky to take on. Dealer will have no issue to punt that to 3rd party lender to work out a new number to close the deal. But it probably won't be as cheap as your previous deal or the fact that they don't want to put the work in since it may just go to the next guy with less hassle.
[OP]
Jr. Member
Oct 29, 2011
149 posts
16 upvotes
Ontario
macdonlg wrote: Depending on the lender the dealership may actually prefer a loan arrangement as they get a "significant" kickback so doubt it is that. Put it this way - some random dude knocks on your door and says I am not currently employed and have not been for some time, but these 10 guys can vouch for me as I have paid back their loans in the past. I'd like to borrow a lot of money from you - would you do it without asking anything from them in terms of collateral?
Huge difference. I am not the one making the offer. I am trying to qualify for offer presented to me. Not the same thing.
[OP]
Jr. Member
Oct 29, 2011
149 posts
16 upvotes
Ontario
Xtrema wrote: No. Financing arm of the brand deem you are too risky to take on. Dealer will have no issue to punt that to 3rd party lender to work out a new number to close the deal. But it probably won't be as cheap as your previous deal or the fact that they don't want to put the work in since it may just go to the next guy with less hassle.
This i completely understand.
[OP]
Jr. Member
Oct 29, 2011
149 posts
16 upvotes
Ontario
macdonlg wrote: If this was the case he could easily use that as collateral with the bank. Clearly he has not been able to satisfy the lender(s) that he is able to pay the loan back along the payment schedule.
Just caught this. False assumption. I can get a bank loan just not at 0%. No bank will offer 0% financing. That's there business to loan money out to make money. Whereas a car dealership makes money by moving cars as well as offer financing and auto services.
Sr. Member
Jul 18, 2020
753 posts
1217 upvotes
I always wonder, let say you don't have any employment income but you have dividends income from stocks and consistently over a 100K/yr of dividends from the past 5 yrs? Will the dealership consider offering financing to you in that case?
Deal Expert
User avatar
Jul 30, 2007
32067 posts
19275 upvotes
Toronto
I think they want employment income as “better” proof for credit risk assessment

Top

Thread Information

There is currently 1 user viewing this thread. (0 members and 1 guest)