Like I said - your length of credit is too short.
So what is a good length of credit? Many of our customers do not even have any history of credit. Isn’t it about how well you have been making payments etc…credit mix. I have seen people with 20yo credit, and a score of 590-600.
Its a combination of credit score, history, age, total debt. It not just based on one factor. Thats how all creditors work.
What is length of credit?
The length of credit (or age of credit) on your Credit Dashboard is the average length of time since you opened your credit accounts or loans. Your length of credit includes accounts and loans reported to the credit bureaus, whether they’re open or closed. Keep in mind that accounts usually stay on your credit report for 7 to 10 years after they’re closed.
In addition to the average age of your accounts, lenders will usually consider the age of your oldest account and the age of your newest account.
Why does it matter?
Keeping your credit utilization in check is a strong indicator to lenders that you can spend responsibly; the lower your credit utilization, generally the better for your score.
In addition to looking at utilization, lenders often consider the amounts you owe on your accounts, and both usually have a high impact on your credit score.
Lenders want to see that you can use your credit and manage it responsibly.
What can you do?
Consider keeping your oldest accounts. Be thoughtful when you open new accounts.
When you consider closing an account, think about the effect it will have on your overall length of credit.
Be thoughtful when you open a new account, too; when you do, it will lower your average length of credit.
0-48 months - low
48-72 months - OK
72+ months - good
1 Like
Lol 
Well I for sure know people who have leased suuuper expensive cars with 40 month credit history. My dad bought a 60k Infiniti having only 1 car loan account on history, credit age of 5 years total (but use of only 2 accounts), and some small credit card. What’s funny is that he got a 3.49% rate also on it!
You might want to consider your insurance too. It may end up being nearly as much as half the lease payment if you are 20 years old and trying to lease a $64k car.
I’d rather be spending my money on a place to live on my own, or saving it if i was 20 years old and living with my parents. Spending $600-700 a month on a fancy car that isn’t going to get ANY equity isn’t the best decision this young… just saying.
5 Likes
3.49 isnt the best rate and also a 60k car isnt super expensive. But since, you work at a dealer when your ready, run the numbers see what they say. Thats going to be some real time advice rather than someone online right?
Good Luck
1 Like
I see your point for sure. I did get my insurance quote already, and payment is actually very reasonable, a little more than a base camry to insure (surprisingly).
Guess you are right. Thanks!
72 months at 3.49 with 0 down is actually good though.
That statement isn’t true for everyone.
2 Likes
It’s actually not. My last car loan was 1.9% on a 72 month loan, and that was inflated as it was a used vehicle.
Anything over 2.49% on a vehicle loan is not “good” for anyone but the bank.
My $.02…If you are taking a 6 year loan on a car, you should reconsider how much car you are buying, You’ll be out of warranty for at least 2 years, will have maintenance to worry about, as well as a car payment.
That’s why you lease haha!
I think the OP is/has already decided on what they want to do. OP, I would highly suggest maybe looking at a cheaper car for the sake of being responsible. Not to be personal but you are young. I would suggest maybe getting something a bit cheaper (Maybe a 3 series? Q50? Lexus IS?) I would suggest getting quotes for the vehicles as it’s definitely not cheap to insure a leased vehicle. They have specific requirements for it (100k, 300k, 100k, collision and comprehensive, etc.) Also, god forbid, you lose your job, what will you do when you have a car that’s $600 and insurance that’s $200-$300. Are you able to cover that for atleast 6 months if you lose your job? Just some things to think about. If I have offended you in any way, I apologize.
1 Like
Thank you for the insight. I really appreciate these good suggestions. Having a financial buffer for 6-12 months (including payments, insurance, gas, was actually the first thing I took into consideration) in case of job loss is a must for sure! The insurance premium what I pay for my car is going to be equal to the insurance rate of the 540i (already ran the numbers), so that doesn’t change. Gas wise same expenses.
You’re welcome. I have made similar mistakes in cars so I try to give insight when I can. Hopefully you make the decision that best serves your short term/long term goals. It’s better to start off small and build up then to go all out and possibly crash and burn. (sarcasm).
1 Like
I agree! It’s good to have everything planned out.
What is your ideal car? If wanting something unique, powerful, and fun for this young part of your life when you have no real obligations (like kids, wives, etc.) then I’d almost argue that one of the smarter things to do is to get a reliable depriciated sports car.
Literally one of my best financial decisions when it came to a car when I was young was getting a Lotus Elise. They tend to cost $30k, and will always cost around $30k. I bought one from a guy off the forums for $26k, drove it for two years, dead reliable, insanely fun, cheap to insure, and then sold it for $36k.
Next one I am looking at is a Lotus Evora, 2010-2012 models can be had for $40k, again super reliable, and just simply does not depreciate.
Slightly newer M3’s I think are good buys as well. But basically think of the long term implication of a $600-700 monthly lease payment. That’s $22-26k you are simply throwing away in the prime of your saving life. While you could do a zero down car payment for a $40-45k car on a 5 year loan, and as long as you pick a car that doesn’t depreciate much, you are sort of insulating yourself from being upside down unless you changed your mind right away. 2-3 years later, you have only lost a few thousand in depreciation, taxes, and the occasional repair. Certainly not $22-26k that’s for sure. And you end up with a cooler, more fun car than a 540i which is really just a luxobarge.
Newer Porsche 911 or Cayman also spring to mind. Not the older ones with the IMS issues that loom over your head, but I think 07-08’s are now getting into the $40-50k territory.
1 Like
I see your point. I just want a 540i