Auto Lease Questions (Mazda)

[cnelson]

I am thinking about leaseing a Mazda 3 sedan, possibly over the summer or towards the fall. I know it seems a bit early to prepare however, I want to make sure I have everything in mind. (If anyone has a 2014 Mazda 2, please let me know what you like/dislike about it)

Ok onto the good a stuff..

Current FICO score is 677, currently I have a bit high utl% right now, but by the time I am ready to lease, it will all be close to 0% util. My score bounces between 650-700 normally.

I currently have 2 open CC, Discover with a 2800 limited, Citi Visa with a 4,000 limit. I had a TD Secured card, but recently closed that out. History for the cards goes back about 2 years. I have one auto installment loan with my girlfriend (her car, she pays, but her credit was not good at the time) that has a balance of 4700.00. All payments on all the accounts paid on time, no collections, badies, etc.

I also recently purchased my first home, the mortgage payment is 1156.00 a month. Not sure if this is showing on my report, I never got an alert for a new account, but I have not pulled the report since before I closed on the home.

I think my DTI may be a bit high, and we may need to pay off the other auto loan before I do anything else for a new one. Or possibly add my girlfriend on the new loan as well, but her credit is still not great, so I think I want to stay away from that option. After tax returns, and by the end of summer I think it would be realistic to pay the other auto loan off if need be. I figured I did get approved for the mortgage with the other auto loan, so if I paid that auto loan off, than taking a new one after that shouldn't be a big issue? But who knows..

My concern is last time I went to lease, probably over a year or so ago.. The guy said I'll never be approved for a lease, because of my lack of credit history/installment loans/etc. Obviously I have come a fairly long way since that. Just not sure if it is long enough?

My income is 37k a year, that is reported. However I also have business, soon to be an s corp. This is my purpose for leaseing vs. buying, as leasing offers better tax opitions if you own a business. the 37k is from another job, that does not include any of business income. I try to keep the business income seperate from my other income even tho, I own the business.

I wanted some opinons on leasing? Best way to go about it? I see right now Mazda has a lease offer on the Mazda 3, for 169 a month in my area. (NJ) Does anyone know how their credit tiers run? where would say a 680 land me? Is the other auto installment loan, going on about a year and half going to help or hurt? I am also open any other good lease deals on sedans, that may differ in credit tier options. Thanks for any opinons, Chris.

[Ditovera]

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@cnelson wrote:

I am thinking about leaseing a Mazda 3 sedan, possibly over the summer or towards the fall. I know it seems a bit early to prepare however, I want to make sure I have everything in mind. (If anyone has a 2014 Mazda 2, please let me know what you like/dislike about it)

Ok onto the good a stuff..

Current FICO score is 677, currently I have a bit high utl% right now, but by the time I am ready to lease, it will all be close to 0% util. My score bounces between 650-700 normally.

I currently have 2 open CC, Discover with a 2800 limited, Citi Visa with a 4,000 limit. I had a TD Secured card, but recently closed that out. History for the cards goes back about 2 years. I have one auto installment loan with my girlfriend (her car, she pays, but her credit was not good at the time) that has a balance of 4700.00. All payments on all the accounts paid on time, no collections, badies, etc.

I also recently purchased my first home, the mortgage payment is 1156.00 a month. Not sure if this is showing on my report, I never got an alert for a new account, but I have not pulled the report since before I closed on the home.

I think my DTI may be a bit high, and we may need to pay off the other auto loan before I do anything else for a new one. Or possibly add my girlfriend on the new loan as well, but her credit is still not great, so I think I want to stay away from that option. After tax returns, and by the end of summer I think it would be realistic to pay the other auto loan off if need be. I figured I did get approved for the mortgage with the other auto loan, so if I paid that auto loan off, than taking a new one after that shouldn't be a big issue? But who knows..

My concern is last time I went to lease, probably over a year or so ago.. The guy said I'll never be approved for a lease, because of my lack of credit history/installment loans/etc. Obviously I have come a fairly long way since that. Just not sure if it is long enough?

My income is 37k a year, that is reported. However I also have business, soon to be an s corp. This is my purpose for leaseing vs. buying, as leasing offers better tax opitions if you own a business. the 37k is from another job, that does not include any of business income. I try to keep the business income seperate from my other income even tho, I own the business.

I wanted some opinons on leasing? Best way to go about it? I see right now Mazda has a lease offer on the Mazda 3, for 169 a month in my area. (NJ) Does anyone know how their credit tiers run? where would say a 680 land me? Is the other auto installment loan, going on about a year and half going to help or hurt? I am also open any other good lease deals on sedans, that may differ in credit tier options. Thanks for any opinons, Chris.

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So a couple weeks ago I purchased a 2014 Mazda3 S Grand Touring hatch after I totaled my previous vehicle. I went to dealership with my own financing from my credit union with a blank check at 3.4% apr. Dealer said they can get me lower apr and wanted to run my credit - after which they offered me 2.9% they said my FICO was 670 I think they pulled auto enhanced because my scores are a bit higher as u can see from signitaure. Either way i took it. I made a 20% down payment which i think had a factor in the lower interest rate. As far as credit tiers I think if you are above 680 they can work with you based on down payment and DTI to get you promotional rates- I live in upstate NY. To give you an idea my DTI was 23% and income is 80K.

Now as far as leases go I would also look into Ford and Kia. They tend to be easier to qualify...

[cnelson]

Thank you for the input. I will no doubt keep that in mind about Ford and Kia, and I do like some of the Kia's and Ford has come a long way in the last few years.

Typically what are the DTI's for auto loans? The last time I got the auto loan, I have little to no debt. With the mortgage I went FHA, and DTI didn't seem to much of an issue. But now with mortgage payments, I know my DTI will be higher.

[bhenken08]

Do you have a car payment now? Will you be trading in that car?

Some dealers will tell you you can't get approved for a Lease because they would rather sell a car than lease one. ( used to work at a dealership)

check out trueprice. com

[CARDEALWIZARD]

Typically, banks are more strict when it comes to leasing than they are with traditional purchasing.  The dealer would rather you lease the car for two reasons.  Customer retention, meaning you will be in the market again at the end of your lease which is usually 36 months, and the second reason is because the dealer usually makes more money when a customer leases.  Most customers don't understand how a lease works and it is more difficult to negotiate the price on a lease.  As far as credit, you usually need at least 3 years in the credit bureau, and some banks will require previous auto credit in order to lease.  You can lease without auto credit if you have a mortgage that has payment history.  I actually prefer the lease instead of traditional financing for many reason, but you have to be very careful when you lease and ask all the right questions.    Modcut

Edited to remove link/advertisement

Shogun, myFICO moderator

[CARDEALWIZARD]

Also when leasing you really need to look at how much the car will depreciate over the lease.  Ford, and kia will depreciate more than a brand like Honda, and when you lease you only pay for the deprecation, so the more tha car depreciates, the more you will pay.  Lease specials with companies like this can mask the deprecation and you may be left with an over-inflated residual at the end of the lease, which means you will overpay if you decide to keep the car at the end of the lease instead of turning it in back to the dealer. 

[Anonymous]

So I went to AHF website applied for pre approved financing and was pre approved for 25k with 7k down for my trade in. Now it says bring the certificate and application into the Honda dealership. I have had 2 loans through AHF in the past the first with my mother co signing a lease and the second was me buying out the lease on my own. I paid off both. Since then I filed bankruptcy due to massive medical bills this year to avoid garnishment. My credit is really not that great. I noticed the application I am to bring in asks if I ever filed bankruptcy. When I check yes will they suddenly change their mind or am I golden due to preapproval? Also I told a acquaintance I know that works at Honda dealership about this preapproval and he told me to come in and "apply" through his dealership. I'm confused and really don't know what to do. Thanks for the advice in advance!