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Established Member
Posts: 39
Registered: ‎04-22-2011
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If You Lease does it go on Credit Report?

I am thinking about Leasing an car, because we are also in the process of purchasing a home as well and the mortgage company that we will be going through suggested that we or I do not purchase a car, until after closing... Anyway,I need a vehicle now, so I was wondering that if I get an Lease does it still show on the credit report and how does it report, would it generally report showing the full purchase price of the vehicle, or what?

 

I really wouldn't put any miles on it at all, my job is 5 miles away, my kids school is 1 mile away, and when I go out of town I just rent a vehicle.  The only thing I am worried about is the approval, I was late on my current auto loan (which is paid off now), back in 2006.

 

Any suggestions would be greatly appreciatedSmiley Happy

Established Contributor
Posts: 582
Registered: ‎10-17-2010
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Re: If You Lease does it go on Credit Report?

[ Edited ]

Yep, it goes on your credit report under installments just as a financed vehicle including the Full leased price of the vehicle at signing say $30,000 for example -- minus my monthly payments, of course = balance reported each month.  Approval is about the same as traditional financing, but dealerships make alot more money pushing Leases than Retail Financing because they get to resell the vehicle again after you return it as well as the upfront kickback they receive for leases over financing.

 

But, I'd warn against a lease.  I did it one time in life and will never do it again.  I had the same thought in mind as you did -- in fact, I only lived 6 minutes away from my office AND had a second vehicle, so I thought, No Big Deal!!!  Boy-O-Boy was I wrong.  Leased vehicles require the highest insurance requirements, therefore, I could not modify my policy.  If you modify your insurance policy below their requirements, they CAN and WILL repossess your vehicle, so I carried sky-high premiums for the full length of the lease -- with that money alone, I could've purchased ANOTHER small car.

 

Also, it was more of a headache in the end trying to prep the vehicle for return -- they want it in prestine showroom condition with a new set of tires if the wear is under specs, etc.  That Kit they send you is to measure each wear-n-tear dent.  Since my lease end timeframe was during the Winter season, imagine me trying to identify and measure dents in our Michigan weather -- hope you have a garage or use a friend or relative's.  You must provide proof of This-n-That such as all recalls, oil changes, routine scheduled maintenance -- no problem there if you save all of your receipts.  I thought it was just my leasing company being a Pain In The Rear, but NOPE -- all do the same.  If you have small children, FORGET IT!!!  If something spills -- they will charge you a minimum detailing fee of $600 if you don't take care of spots and stains yourself.  The dealership made a note that they found a couple fossilized french fries in the cushion of the back seat and told me they MUST make a note of that -- whaaaaaaaat???  But, there's no DING for fossil fries  Smiley Very Happy

 

Then you walk away Car-less and back to square one again.

Valued Contributor
Posts: 1,668
Registered: ‎02-18-2009
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Re: If You Lease does it go on Credit Report?


JayRizzo wrote:

Yep, it goes on your credit report under installments just as a financed vehicle including the Full leased price of the vehicle at signing say $30,000 for example -- minus my monthly payments, of course = balance reported each month.  Approval is about the same as traditional financing, but dealerships make alot more money pushing Leases than Retail Financing because they get to resell the vehicle again after you return it as well as the upfront kickback they receive for leases over financing.

 

But, I'd warn against a lease.  I did it one time in life and will never do it again.  I had the same thought in mind as you did -- in fact, I only lived 6 minutes away from my office AND had a second vehicle, so I thought, No Big Deal!!!  Boy-O-Boy was I wrong.  Leased vehicles require the highest insurance requirements, therefore, I could not modify my policy.  If you modify your insurance policy below their requirements, they CAN and WILL repossess your vehicle, so I carried sky-high premiums for the full length of the lease -- with that money alone, I could've purchased ANOTHER small car.

 

Also, it was more of a headache in the end trying to prep the vehicle for return -- they want it in prestine showroom condition with a new set of tires if the wear is under specs, etc.  That Kit they send you is to measure each wear-n-tear dent.  Since my lease end timeframe was during the Winter season, imagine me trying to identify and measure dents in our Michigan weather -- hope you have a garage or use a friend or relative's.  You must provide proof of This-n-That such as all recalls, oil changes, routine scheduled maintenance -- no problem there if you save all of your receipts.  I thought it was just my leasing company being a Pain In The Rear, but NOPE -- all do the same.  If you have small children, FORGET IT!!!  If something spills -- they will charge you a minimum detailing fee of $600 if you don't take care of spots and stains yourself.  The dealership made a note that they found a couple fossilized french fries in the cushion of the back seat and told me they MUST make a note of that -- whaaaaaaaat???  But, there's no DING for fossil fries  Smiley Very Happy

 

Then you walk away Car-less and back to square one again.


There are two major things people Lease in their life: Cars and apartments/houses. No one ever calls their rent payment their mortgagae but everyone calls their leased car payment their car payment.

yet the standards are very similar: when I leave a leased apartment I have always been given an itemized bill of everything they did after I moved out and was charged accordingly. (My favorite is what they bill for cleaning the stove)

 

Car leases are similar.

 

I dispute your negative experience/opinion on leasing as fear mongering.


Car lease payments are BASED ON THE RESALE CONDITION OF THE CAR AT THE END OF YOUR LEASE- so yes cleaning and dings may well influnce that value. Leaving 4 bumperstickers on the card about how your kid is a successfull whatever at whatever school, is like punching holes in the wall of your apartment. Someone has to fix it.


Lease a summer house/cabin/beachfront and you will be charged for wear and tear damage and such.


Leasing a car can be a great experience if you:

 

1- have a stable job and commute so you can predict your mileage.

2- have stable housing so you know where you mileage will be at the end

3-Fully explore and factor all "lease turn in" fees to your overall payment. (do research some companies charge some do not)

4- Do not expect to have excessive wear or tear to the car (yeah lots of kids can be a problem)

5-Keep in mind IT IS NOT YOUR CAR.

 

But here is the thing: Ford, if you were leasing a vehicle from them offers WEAR CARE which yes you pay for, but it does increase the amount of coverage you get to where you in most cases really can walk away from the lease at the end no money owed unless you went over mileage. (Talk in depth at the dealership to know what is expected of you.)


You get the benefit of, depending on the lease special/incentives, of getting a $25,000 car for around $300 a month. thats pretty darn good.  So yes pay the $100 to have the car detailed before you turn it in (which most people do not want to do because they are giving up the car), or accept paying much more to have the car cleaned.


I have seen people have major damage to a lease vehicle from a car accident and not want to turn it into their insurance company as it would raise  their rates freak when they are told they are going to be charged at turn in, its like Umm did you expect that little elves were going to fix that missing bumper?

 

For an idea of extra warranty and wear care you can get for peace of mind:

http://www.fordcredit.com/redcarpetlease/features_benefits.jhtml

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