Hey guys. Pejman Ghadimi here. Welcome back to another Exotic Car Hacks video. Today, we are going to look at a really, really interesting part of the exotic car ownership equation which is exotic car financing. So many of you have emailed me and asked me, "How is it that you can drive" "a Lamborghini Huracan for" "$800 a month?" "How is it that you've been able" "to drive some of these other" "exotics for just $400-500 a month?" "How does that make any sense?" So, first off. We're not going to cover the entire Exotic Car Hacks strategy today. If you want to learn how to own an exotic car at a fraction of the cost, of true or perceived ownership, you can actually click the link in this bio and take the full free training. Today, what we're gonna look at is: What do banks look at in order to approve a person for an exotic car? Because, reality is, that exotic car financing is extremely different from normal car financing. You see, contrary to what most people believe, exotic car financing is EASIER for you to specifically get approved for than normal car financing as long as you meet four specific criteria -- We're gonna look at today. But, you should consider that the banks do break down exotic cars from regular cars based on badges. Meaning that certain cars are considered exotics, like Maserati, Ferrari, Lamborghini and even Rolls Royce, etc... While other cars, like Mercedes, Porsche, etc., are not considered "exotic" even though they do have exotic models. And this is very important to understand because it does give you a competitive advantage when you're buying a BMW i8, a Porsche GT3 or GT2RS, compared to buying a Lamborghini -- Gallardo, Huracan, etc. And so, while on the surface, you may say, "Well," "PJ, why does that make a difference?" "They're both $200,000..." It doesn't really make a difference to me, but it does make a difference to a bank, which looks at one as an incredibly leisure-based vehicle, and looks at the other one as a necessary vehicle you're taking to work. Now, I know that's not always the case, but that doesn't matter. We just need to understand how banks think. The other misconception in the exotic car financing realm is really that 144-month financing makes sense. One of the big misconceptions is whenever I write an article or I've done a video for the course, Exotic Car Hacks, and I've shared how I was able to drive a Huracan for $800 a month, a lot of people started coming to me and saying, "Wait a minute..." "That doesn't make any sense," "You must have gotten 144-month financing with a really large down payment." Part of the things I teach in the course is actually to almost never put a down payment, and, in many cases, try to avoid that as much as possible, especially if you're buying the cars right, because in many cases, you're buying the cars below the book value that is in the bank's interest to be financing. So, in other words, you're giving the bank, from its perspective, an asset - not a liability. Many of the things, again, that I teach in the course. But... Once you actually take a look at the 144-month financing from Woodside Credit, some of the leasing programs out there, from Select Leasing or Putnam, or some of these other companies... At first glance, you may think, "Well yes, great deal, lower payment," "Very okay... 10-15% type," In some cases 20% type down payment. And it seems like the cars that currently weren't affordable become affordable. Reality is one of the big mistakes people make when it comes to exotic car financing is really focusing on the wrong thing - which is the payment. And this is what we're not going to do today: We're not just going to look at a payment as a reason you can or cannot afford a car. One of the big, BIG principles we teach at Exotic Car Hacks is to make sure you're always taking in consideration the overall ownership cost. Because while you might be paying $2,000 a month to own a car, versus $1,500 a month -- Which may seem more affordable... If the full $1,500 a month is leaving out-of-pocket and going straight into interest, then you're ultimately losing $1,500 a month. However, on the other hand, if $1,000 of that is going straight into principle, then you're technically only losing $500 a month on that specific payment. One of the things to understand, though, is that if the car itself never actually loses value -- Like using some of the strategies we teach. Then, technically, by the time you're exiting the vehicle, the actual principle that's gone in the car is only there in the loan for you to get back out. The interest is where you lose. Now, we're going to take a look at what are the odds that a bank is going to approve you for specifically an exotic car loan, not just a car loan. Now, while this applies to some luxury aspects of car lending, mainly this is an exotic car guideline. So, the bank looks at these four different criteria, which I want to point out here. The first thing the bank wants to see when you're financing an exotic... And it doesn't mean they won't go below this score, but obviously we all know that your credit score matters. And so, the way banks look at credit scores is they either take a combination of your three major credits, or they use usually TransUnion or Equifax as their kind of core go-to credit pull. One of the things to consider too is that, you know, in most cases, banks always want a premier tier-type credit to be lending on a leisure-basis. Because, obviously, you are trying to be borrowing money to have fun for an exotic. You don't need to borrow money in order to survive and go to work -- To drive a Ferrari to work. So, what ends up happening is banks look at scores as a big part of it. They're like; "Are you trustworthy" "in your day-to-day life?" "Are you gonna be trustworthy" "for something that is fun-based?" So, what they look for to be able to give you a faster approval is specifically your credit score of 7... 720 And while we've seen credit scores as low as 680 get approved, in some cases 650, if some of the other criteria are -- Remember, these are the four kinds of criteria, so if these four are met -- Your approvals are faster, without any income verification, and in many cases, enable you to take more money out to have $0 down payment. Now, this is important to understand, because any variation of these four boxes will end up either requiring documentation, or will end up requiring a higher down payment to offset what they consider your risk for exotic car lending. So, the first thing they're looking for is your score. The second thing they're looking for is what they call lines of credit. Now, one of the things that people misunderstand about financing a car is that a bank would look at the loans that you have, such as a big house, and use that to allow you to buy an exotic car. And that is NOT the case. A lot of times, banks, when it comes to exotic car financing, will only look at comparable car trade lines. Meaning: What was the most expensive car you have ever financed? And a big misconception here is that if you financed two $60,000 cars, they will easily give you a loan for $120,000 And that is not true. Banks will typically only look at one specific trade line: The highest one you've had for a car. Off of that, they will want to go to what they call LITERALLY a 60% above that trade line dollar. So, if you financed in the past roughly about, for example, $50,000... they would very comfortably go to $75,000. $80,000. In some cases, as much as... 200%, which is just our... It's just 100% more, which is like double the amount you've done. So, if you financed a $60,000 car in the past, they would be comfortable going to, of course... The next step, which is... You know, double that. Which is $120,000. So, the point here, is that, again, they're looking for at a max, and this is -- I'm gonna write here, the MAX. they're looking for 200% -- Meaning... Double what you previously financed as a car, and only a car. And then comes this other box. Which is something that a lot of people don't seem to, again, understand about how banks work. The employment category. Most of us know that if you're self-employed, or working for yourself, you're obviously not paying yourself all of the money that you're owed in your business. and you're finding ways to, of course... Pay less taxes. This can come and burn you really hard. Especially when you go get a car loan and you're showing only $50,000 on paper... But, in reality, you're making $200,000 - $300,000. One of the biggest mistakes entrepreneurs make is just going ahead and cutting themselves down on their taxes, ultimately killing their borrowing capacity. However, for employment, here's what a bank really looks for when it comes to exotic car financing. First off, they want to make sure that you're employed in a profession that is stable. So, there's an extra bonus point if it's stable. Now, what do I mean by that? So, they want to look for stable in two ways... Either that you've been there at least 3 years, or that it's a profession that is unlikely to go away: A doctor, a lawyer, you know... A physician... But, on the other hand, if you're a consultant, a marketer, a sales guy... Those are "unstable". So, they're looking for track-record in "stability". They also want to look at the track record based on your core income. Never your commissions. So, never-ever-ever, on your employment, application put down the you have commissions. Only put the core of your employment, as a whole in the salary section. This will SIGNIFICANTLY increase your chances of getting approved, and significantly decrease your chances of actually having them ask you specifically for tax returns to match that. So, they love W2, they hate 1099's. So, one of the big things that's important is to always come across as though you're a W2, even if you're not. Now, I'm not asking you to lie in your application. Make sure you're careful about that. What I'm saying is that to make sure that you, again, position yourself for a better chance of success. So, make sure that when you're actually putting that down, you put your entire gross income, rather than break your income down that way. The other thing they're looking for when it comes to employment, is your salary. What they want to see, in general, which you may not know because none of them are saying this... They want to see that you at least make the same amount as the car -- Not payment... But cost. So, if you're buying a $185,000 car, and you're only making $50,000 a year... It's probably a bad bet for them. However, if you're buying a $185,000 car, and you make $200,000 on your application, then that is going to, again, facilitate less paperwork, and them feel better about the deal. So, again, the employment then needs matching income to the actual car. And this is very important to understand, because this is the employment. Now, one of the final things that they look at that, again, is never disclosed anywhere, that no one's telling you, except here at Exotic Car Hacks... Is your residence. One of the BIG things that people don't realize when buying an exotic car is banks always want to know where you live. They want to know where they can come and repo their cars. That's right. If you don't pay, they want to know where you live. Like where are you? What is the likeliness that you're not going to pay for your car? That's what we call your "Credit Risk". And the big thing that comes in part of that is your residence. Now, you may not have known that before, but banks hate renters. They hate people who rent properties because they're mobile, and they can quickly move from one place to another. And they just don't like that. What banks really love is people who own their homes. Now. There's two types of home ownership they LOVE. The first one is if you've owned your home for more than 3 years. Meaning you've lived there at least 3 full years. They absolutely love that. And the thing they love even MORE than anything, that actually holds so much weight that if one of these boxes wasn't even there, they wouldn't even care... Is if you own your home outright. One of the BIGGEST approval ratings from a bank is when you own your primary residence without any loans because it tells them that they become the number one priority when it comes to repaying your loan. Now, listen, this is important to understand because when it comes to repaying your loan... Right? They want to make sure you're about to, and what usually banks look at is saying... First, you're always gonna pay for your home, because you want to roof over your head. Two, you're always gonna pay for your car. And so, when they know that your home is paid off, then they LOVE the fact that the first thing you're gonna pay for off is your car. And therefore your income doesn't matter as much because that's still the priority, now. They know that even if you make $10,000 a month, and are getting a $30,000 loan per month type of payment, you're still gonna pay that. So, using these four things, basically, which is this is either paid off, or at least three years... That's what they look at. Depending on where you fall into each... Depending on how strong these are... This is pretty much the 100% ratio. So, if you think about that: 25%, 25%, 25%, 25%... Holds the weight of how a bank makes a decision towards exotic car financing. If we understand that, then what that means is that if one box is really out... Or it's just 10%, or 20%... This is how the ratios determine to see where you fall into, in terms of their approval. The more you meet the 4 boxes, the less documents you need, the less proof of income, proof of verification, proof of employment you need, the easier it becomes. Now, one of the big, big no-no's, when it comes to employment, which is just a trick here, I'm going to teach you... This is directly from the course, is that if the employment, in itself, shows that your phone number is the same as the business phone number, then you're automatically going to require tax returns. So, one of the big things here is to make sure that your personal number is never used for your business number. And always make sure that someone can Google your business and a real business listing would come up, a website, or something indicating that a real business exists. Obviously, if you're John Smith, you don't want to own "John Smith Contracting". It would be horrible for you to then think that you're working for a person whose last name is the same as your own, so it wouldn't make any sense. So, understanding this will significantly improve your opportunity or your ability to finance an exotic car over normal car. Now, I really hope you found this video helpful. I will try my best to do more and more videos like this for you in the future -- If you promise to subscribe, hit the LIKE button and let me know your comment as to if you've ever been declined or denied an exotic car loan and why. And I'll be happy to help you through this. And, of course, remember that the free training is still in the link right below this video, where you can, of course, take this incredible training and learn how to own the car of your dreams without worrying about the D.R.I. -- Depreciation, Repairs or Insurance. Things that I teach, not only in the free training, but also teach in the course, in full, for any of our 3,000+ members that are already part of Exotic Car Hacks. See you on the next video, hit subscribe, hit LIKE, I'll see you next time.
