Just Graduated? Heavy Student Loan? Buy A Bimmer!
Freshly minted college graduates usually aren’t the best credit risk – especially in today’s unpermissive environment when it comes to jobs. BMW thinks otherwise and declared that a good student needs a bimmer for graduation. On credit. Real credit. No more phony college credits. This is the real thing!
BMW started a College Graduation Program to get college graduates and young professionals in a bimmer and debt. According to a press release, “the Program encompasses both leases and loans and applies to new and certified pre-owned BMW and MINI automobiles, as well as BMW motorcycles.”
You need to either have graduated within the last 12 months, or are eligible for graduation with an undergraduate or graduate degree within the next 4 months and have a bona fide job offer. That’s pretty much it. Oh, payments shouldn’t be more than 25 percent of income.
One of my clients graduated from College with $35,000 in debt and had 540 fico scores and was able to get a $29,000 loan for a car at 22% INTEREST HAHAHAHAHAHAHA. That's like a goddamned Macy's credit card. I did my best to talk my friend out of trying to buy a CLS500 cause he really thinks he can afford one making less than $50,000 a year, even though these crap dealerships would sell him one for like $18,000. I tell ya, credit risks are HILARIOUS. Ultimately, he realized he couldn't afford it when he took my advice and called Insurance and they told him his insurance would be over $500 a month.
This is serious groupthink trending. The autoblog that this crowd draws are naturally more inclined to buy cheaper, older, cars. So while I concur this deal with BMW is bad news a large chunk of STEM graduates are walking out the door making 50K+. I have a friend getting ready to graduate with her MS in psych and places are killing to hire her at 60K and up. The jobs for skilled players are out there and need to be filled. The heyday of BMW though has passed, the switch in Britain from Mondeo to BMW just as the switch from Camry to BMW in the US is done. We simply can't afford to buy 3-series cars like we used to. That being said, a good BMW brand new really isn't out of the price range of a kid who landed in a 40-60K job who went to 4 years of a regular state college or commuted to a more expensive school. Seriously, I walked out of undergrad owing less than 20K and I borrowed for 4 years.
My advice to any college grad is to buy a new or nearly new Civic (or a similar car) for cheap, reliable transportation to work and for play. Then work on getting those student loans paid off early, get a house, work on investments and the rest of live's expenses. Later you can get that car you've always wanted and it will be a nice reward. Debt just sucks... making those payments and worrying about it. Personally my debt (including a mortgage) is about 10% of my income, and that is with owning three nice vehicles.
I don't think the credit card companies are allowed to park themselves on campus anymore and pitch credit cards to the naive, so BMW has stepped in to fill the void. God help any student that falls for this.