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

I think it's just that they are only willing to finance an auction value on a used car of that age to limit risk. If they repo the car they will just sell it at auction, not retail. I'd suspect for other cars it's going to be a similar deal... they won't finance full retail.

Retail resale isn't really a problem with the Corvette. Look it up, it's very competitive.

I just looked this up on NADA and it's in line with the good stuff.

https://lh6.googleusercontent.com/-g...alecomparo.jpg

I doubt the same banks would give your friend full retail for the two P-cars. They'd probably go off of some auction value.

:iagree: A credit union will make it happen.

Regardless of what the numbers say, it is obvious that the Z06 is not a financial sound investment but a matter of how much $ you want to pay for the POWER. You'd have to end up marrying the car trying to sell even a year or two later will be difficult if you want a premium asking price. All in all...I'm happy he passed, I just couldn't get over the American build quality and it doesn't help that we drove around in his Lotus Exige S all day yesterday.

This is not unique to the corvette. Banks don't like hanging out significant amounts of money on old cars. This is not new.

Hell, go check into how much money you can finance for a 2009 370z.

Hardly any car is a sound "investment."

Obviously there are some exceptions.

The only power in a Z06 that is worthless, is the power that goes untapped due to either lack of driving skill, or lack of confidence to USE the power.

Furthermore, if you think buying a Z06 should be a solid investment, much less almost ANY car now-a-days that isnt ultrarare, you should probably let a finance guy do all your investing and stay out of that realm.

I am aware that no car is a sound investment, but you're drawing to broad a picture. A z06 depreciates far faster than say a BMW 1M or m5. I love the power and torque as much as the next guy I just don't think I want a car worth significantly less than what the current market asking price is. That and I don't think a Z06 looks very good, it looks good because it is a z06.

NOPE.

http://i36.photobucket.com/albums/e3...101/deprec.png


second row is based on Edmund's predictions, top is based on TMV from purchase in 06 until now.


The 1-series M coupe is going to look awful simply due to the fact that most were purchased at far over MSRP.


BMW's are notorious for awful depreciation.

I stand corrected. Oh well, he's still on the hunt though I keep telling him to save $ for a home, retirement, emergencies and stop buying toys. You would think that an s2k, 1m, and exige s would satisfy a guy!

You won't believe how many people on the BMW forums are convinced the 1M will hold tremendous resale value due to the limited production and that the car will be a "collector's item" :bowrofl::roflpuke2:

:icon17:

about as crazy as the people that think the 370z will become a collectors item.

The demand and fanboys for the 1M right now is extremely high, with that said I expect BMW to do something to cash in on it. Come on man, those guys who bought the 40th Anniversary Z and don't drive it will cry if you tell them its not a collectible.

:drama: :rolleyes:

The guys buyin 1ms with markup now are like the guys who jumped on the early gt500s

what a mistake that was...my buddy got his M at msrp but still very expensive

I'm just going to be blunt.
He supposably makes $90,000+?
Supposably has "substantial" savings to pick up any car he wants?

If he needs financing for a $40K car with zero down, he can't afford it. Perhaps that what the bank is seeing. Living at home? No monthly expenses? Pay for the damn car with money! You know, that green paper stuff?

For cryin out loud. Some people...

You're missing the point. Yes, he can pay for it all in cash but frankly an all cash purchase is too much up front liability. The rapport with the bank is solid, he's not the problem. What he usually does is buy the car, make payments, invest in his businesses and then when he doesn't feel like having the bank make any more $ off of him, pay it off. Bank is happy, it made some $, he is happy the car is paid off. I've seen him do this a few times, always made me a little jealous because I was always making payments on my Z. When your bank loan officer rolls his eyes when you walk in and says uh oh what color is this one, you are not the problem.

Good luck getting into a C6 Z06 with reasonable wear/miles on it for less than HIGH 30's. Even a 2006 with a lot of highway miles.

The only complaint I have about my Z06 was the fact that the interior needed some real work. Structurally and mechanically, the car was amazing.

FYI, I payed $65K for my Z06 new in 2011 and when I traded it in 2012 I got what amounts to $55K for it if you consider that they claimed they gave me $58K and stuck me with MSRP on my 370Z (about $3500 over the invoice that I saw for the car).

So...new-car hit, 4K miles, 1 year ownership I only "lost" 9K on it? Do you think you can find a car that has run 10's stock, and runs the 'Ring in the 7:2X's that will depreciate less? Lets see 'er!

He should find a new bank.

+1, my CU has treated me with polite respect from the time I first joined them. So far they have financed both my Z06 and my 370Z for me, both in painless procedures. When I move, I plan to still keep 'em.