Went to see a Z06
 

During my day off yesterday my friend, who has been looking for a Z06 Vette for awhile asked me to come along and visit a few dealers with him. He found one he liked and it sounded like it was a good price. It was a private sale for a 2006 Z06 with 25000 and it looked pretty nice. My friend is a few years older than me and has more than enough annual income (est. $90,000.00+) and he wanted to finance in full with no early payment penalties. That's where the funny stuff started happening. The asking price on the car was $40500 and he wanted to finance around $38000 but after spending time on the phone with underwriters at Wells Fargo and Chase he was approved but for no more than $29,xxx.xx. We assumed they didn't want to take a risk on him but when we spoke with the underwriter he said it wasn't that they won't approve him, they don't value the car anywhere near $40,000.

I found this extremely funny, so a 2006 c6 Z06 has depreciated so much that the banks do not view it as having more value than slightly less than $30,000?!? I picked on him all night using terms like "worthless power" "enough power to turn you upside down before you turn it on" and reminded him if he buys one now anything over $30,000 he overpaid for. Moral of the story, Chevy is all big power and no value, that's what you get when you flood the market with cars even as powerful as the z06.

I wonder if they were looking at the right car. A '06 Z06 is worth around 40k with that mileage, but a base C6 of the same year and mileage is only worth about 30k.

If it were true that the Z06 was only worth 30k and no more, they would not sell for those prices. Even if your friend couldn't get financed for the full price of the car there are many others out there that have done it.

Its the 5 year rule dude. Banks do not like to finance cars over 5 years old, especially not the entire selling price. His problem is zero downpayment. Its not that the bank thinks the car is not worth it, its the risk factor. To them, lending 40k to purchase a 6 year old car is risky business.

Ah that's right. Didn't think about that.

In all my years, I have never seen a bank worry about the risk of a car loan as long as the car is within KBB or NADA values. Without knowing your friends credit history, credit rating, and current debt/income ratio, we really can't determine where the risk is for the bank or why they came back so low.

I just know I have never had a bank or credit union come back with a lower loan amount than I was asking for and this was always for full purchase price, new and used.

Steve might have a point that they looked at the wrong model.

Our rules are probably different here in Canada but we have a 7 year rule at the bank I work for.

So if a car is 2 years old (7 - 2 = 5) we can do a five year loan MAX. If the car is 6 years old (7 - 6 = 1) We can only do a 1 year loan.

Now, that does not have anything to do with the value of the loan. When we look up the value of the vehicle in the black book, our internal one will tell us what the retail high and low is and then what the maximum loan value can be.

Now, I looked up a 2006 Z06 with 40,000 KM's and here are the value's I got:

Retail Values
Retail High - $43,300
Retail Low - $35,425
Maximum Loan Value - $41,225

So, I would say that $29,000 would be very close to what I could do as well. Assuming, 1. vehicles in the US sell for less (more of them, less import expense etc.) Plus the value of the Canadian Dollar (Which right now is worth more then the $US but not normally)

It's going to depend on the institution. I am sure there are institutions here that would give 100% financing on that Z06 to a qualified buyer.

I'm with Steve. The US seems a lot less regulated then Canada in regards to loaning money. In Canada most banks have the same guidelines for stuff like that because it is the law however, I will tell you. If a rule is going to be broken it's going to be for someone that has amazing credit. Not sure how old you are or your friend is but to get "amazing" credit your talking probably 7 to 10 years of great repayment history and one thing many people don't take into account is net worth. I could have amazing credit and a great income but if I spend it all and don't show savings or an increase in worth it's yet another thing banks will knock you down for.

My friend has tier one credit, more than enough income and was going to put $5000.00. The reality is that because the car is 6 years old the banks do not like it. I'm sure he could get it through a dealer but that's more $. NADA values on this car are not good. Term of the night "worthless power." Haha...american cars makers always oversaturate and overproduce.

I totally understand what you guys are saying. My friend is a little young, he's 24, but he has thus far paid off an S2K, 1M and recently a Lotus Exige S (yeah he's crazy). He lives at home, his parents live overseas but maintain a home fully paid here. He has little to no monthly expenses other than car insurance, there is no reason why not to give him the full sales price because of his current standing. Sure maybe a credit union but Chase, Wells Fargo and PNC said no way we value the car at less than $30,000.00. Something to think about when lusting for an old Vette....you'll keep it forever and you'll be upside down from day 1.

Tell your friend to try applying for a loan with a Credit Union. They usually have better rates and are a little more lenient. However, credit score, etc. will still have an affect.

6 year resale doesn't seem too bad considering MSRP was probably 65-70k. Corvette actually scores pretty decently on resale value if you look around.

Please don't think I am trying to bring your friend down... Just "trying" to explain what might be happening lol.


Does your friend have any savings? If not they probably don't like that either lol I know, picky picky.

When you have hardly any month expenses they WANT to see net worth, I.E. savings. Otherwise, where is all the money going?

The next thing still might be credit. Although he has paid off all his loans has he paid them off too quickly? A lot of people think, "hey, I am going to get a 5 year loan and pay it off in a month to help my credit" When I look at a credit report, I don't see HOW much a payment was I see was that ONE payment, on time, late or was there even a payment required.

A on time payment is going to help, late payment hurt and no payment required is going to do nothing.


So what I am trying to explain is, yes he may have had lots and lots of loans and paid them very quickly and on time but you also need length of payments to build credit. Getting a 5 year loan and then paying it off the next day does little to nothing to your credit.




Beyond all that, banks are stupid /end thread lmao

He has substantial savings, honestly man he could walk in and pick up any car he wanted, his credit is not the issue. The Z06 has no value in the eyes of Chase, Wells Fargo and PNC and frankly that is surprising and hilarious.

Lol ya that's funny. We would loan as I said around 40 but only for one year lol