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gr8ful2try
Posts: 6
Registered: ‎11-05-2012
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Negotiating price on lease with bad credit score

I'm looking to get approved for a lease.  I had a bankruptcy that was discharged in 2009.  I'm fairly confident that the dealer will work with me since my income is now north of $200K and I could afford to put a decent amount down.  

 

Any advice on negotiating the price?  Is it best to get that down before discussing lease terms?  I've been cagey about what I can put down because I'm sure they will want whatever I say I can put down.  From the dealer's standpoint, where does the salesperson and finance person make their commission?

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xiownthisplacex
Posts: 260
Registered: ‎08-29-2011
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Re: Negotiating price on lease with bad credit score

The commission depends on each dealer, but it is always from gross profit. It also depends on the car, if it doesn't have a lot of markup, there isn't much gross to begin with.

 

Certain manufacturers require a certain credit score in order to lease.

Also, if you're looking to put a bunch of money down, you should just buy and not lease. Never put a lot of money down on a lease, that's how they make their profit.

Negotiate the price first, do your research, such as edmunds and truecar before you go to the dealer. If possible, contact their internet department, that should speed up your process.


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Cadillac-XTS
Posts: 1,837
Registered: ‎08-20-2012
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Re: Negotiating price on lease with bad credit score

+1

Established Contributor
guydiver
Posts: 565
Registered: ‎08-30-2007
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Re: Negotiating price on lease with bad credit score


xiownthisplacex wrote:

The commission depends on each dealer, but it is always from gross profit. It also depends on the car, if it doesn't have a lot of markup, there isn't much gross to begin with.

 

Certain manufacturers require a certain credit score in order to lease.

Also, if you're looking to put a bunch of money down, you should just buy and not lease. Never put a lot of money down on a lease, that's how they make their profit.

Negotiate the price first, do your research, such as edmunds and truecar before you go to the dealer. If possible, contact their internet department, that should speed up your process.


Yep, ditto, +2, what he said.:smileyvery-happy:

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gr8ful2try
Posts: 6
Registered: ‎11-05-2012
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Thanks for the answer.  I guess I didn't have notificatio...

Thanks for the answer.  I guess I didn't have notifications set, so I'm just seeing thgis.  To update you, I did not get approved when I was offering to put $5K down.  In fact, they said that that there was no way they could offer me a lease under any circumstances.  They did feel that they could get me a purchase, but the rate was really high.

 

I told the finance guy that I could put $20K down and his tune changed pretty quickly.  Now, I can pretty much get any car on the lot that I want.  My preference has been to get something really nice for a 24 month lease so that my payments are fairly low.  I'm told by the dealer that if I make all of my payments on time, my next lease will be at their absolute best rate (haven't seen that in writing yet though).  

 

I've been viewing the $20K as kinda the cost of doing business after a bankruptcy if you want to drive something nice, but I realize I'm not going to come out ahead in any mathematical equation.  Even after putting $20K down, the cost of a purchase is really high with monthly payments more than dounble the lease.  I'd rather not lock myself into anything too long term if possible.  Any advice of trying to strike up and structure a better deal?

 

 

Established Member
riverbluffer
Posts: 14
Registered: ‎07-22-2012
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Re: Thanks for the answer. I guess I didn't have notificatio...

Hello,

 

I work in the car business and I have purchased many cars from dealers as well so I have a little insight as to how the game works.

 

Leases generally require perfect credit, so if you are iffy about your credit situation then just stay away.  Leases are also horrible when it comes to building equity in yourself.  Generally, it is more expensive to lease than to own.  When you lease, there is usually a ton of up front fees you have to pay and then at the end of the lease you have to option to buy (but you must qualify for a loan) or to turn it in to the bank and possibly pay additional fees depending on how you drove the vehicle.

 

Buying new usually yields lower interest and longer terms.  Used gets you higher interest and shorter terms.... all based upon credit of course.

 

Dealers make profit based on markup, so it's imperative that you research prices of specific vehicles in your area before you go into a dealership.  As a sub-prime consumer, the dealership will get an approval sheet from a lender stating contract rate, buy rate, required down payment, bank fees, max finance amount, and max term.  If you do get an approval with a car dealership, be sure to ask to see this approval sheet so you know exactly dollar for dollar what kind of deal they are giving you.

 

Always negotiate the bottom line price of the vehicle instead of payments!  Once you and the dealer come to terms on a purchase price, you can just use a simple loan calculator to see what your payments will be.  If the dealer gets you hooked on payments and you have no idea what price you are paying, the dealer stands to make a ton of profit off you!

 

Bottom line is, just do as much research as possible and never go into a dealership compulsively!

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Creditaddict
Posts: 20,909
Registered: ‎10-23-2007
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Re: Thanks for the answer. I guess I didn't have notificatio...


riverbluffer wrote:

Hello,

 

I work in the car business and I have purchased many cars from dealers as well so I have a little insight as to how the game works.

 

Leases generally require perfect credit, so if you are iffy about your credit situation then just stay away.  Leases are also horrible when it comes to building equity in yourself.  Generally, it is more expensive to lease than to own.  When you lease, there is usually a ton of up front fees you have to pay and then at the end of the lease you have to option to buy (but you must qualify for a loan) or to turn it in to the bank and possibly pay additional fees depending on how you drove the vehicle.

 

Buying new usually yields lower interest and longer terms.  Used gets you higher interest and shorter terms.... all based upon credit of course.

 

Dealers make profit based on markup, so it's imperative that you research prices of specific vehicles in your area before you go into a dealership.  As a sub-prime consumer, the dealership will get an approval sheet from a lender stating contract rate, buy rate, required down payment, bank fees, max finance amount, and max term.  If you do get an approval with a car dealership, be sure to ask to see this approval sheet so you know exactly dollar for dollar what kind of deal they are giving you.

 

Always negotiate the bottom line price of the vehicle instead of payments!  Once you and the dealer come to terms on a purchase price, you can just use a simple loan calculator to see what your payments will be.  If the dealer gets you hooked on payments and you have no idea what price you are paying, the dealer stands to make a ton of profit off you!

 

Bottom line is, just do as much research as possible and never go into a dealership compulsively!


Okay multi fold....

To the Poster:

What car do you want to lease?

What is your current Credit Score "FROM" the dealer that said they can't lease to you?

Do you have any good accounts reporting currently? and any bad since BK?

 

To this poster above:

I for sure found in the past I was unable to qualify for lease but Buy was easy.... now in the last 3-6 months (and talked about in my auto threads) I was completely flat out denied MANY purchases or given 18%+ on purchases but approved for ALL leases I applied for BUT did get Tier 3 Ford and Volvo, Tier 2 Acura and Kia and Tier 2 then pushed up to Tier 1 for Infiniti!!! Which is what I leased.

 

As far as figuring out the numbers i downloaded an app on my phone that you can ask for all the figures from car dealer and put them in and it will telll you how good or bad it is bascially if barrying tons of stuff in the end of lease so it looks good on front end.

but in end I would put down as little as possible on a lease... for me that was Registraion, Tax on lease you pay monthly instead of all up front like a purchase.

 

Also got some VERY interesting denial letters and scores which I just don't know even where or how!!!

Lexus said I was a 563 I think it was

Toyota said I was in the upper 590's

Kia was pulling around 668 I think and Infiniti was pulling 687 which I wasn't even getting on a Fico score, so I don't know where it came from (My auto enhanced fico was usually a bit lower or a lot lower!)

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New Member
gr8ful2try
Posts: 6
Registered: ‎11-05-2012
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Re: Thanks for the answer. I guess I didn't have notificatio...

I'm trying to decide between a 2013 Infiniti G IPL Convertible ($58,880) or a 2012 Audi A5 Cabriolet Prestige Model with S Package - not S engine- (MSRP is $57,750, but the rep said final price would be significantly under that).  

 

I've been approved for a lease or purchase for the Infiniti.  It was important to me to keep my payments reasonable.  I get big commission bonuses every month, but I want to be able to afford the car with just my base.  Even with $20K down, my purchase payments were going to be $900-1,200, which is why I was more interested in leasing.  I finally got the term sheet, but I'm not sure how to read it to know if I'm getting screwed.  What app is it that you mentioned using?

 

I haven't contacted Audi yet about financing.  After driving both, I'm still not sure which I like better.  The Infiniti is A LOT of fun to drive, while the Audi just feels more luxurious.  I'm not sure if Audi will even let me lease, but I think I'd be more comfortable purchasing an Audi.  I assume their value would hold up better over 5 years than the Infiniti.  

 

Here are my terms for teh Infiniti (let me know if I'm leaving out something importnat).  $58,883 gross capitalized cost, $19,999.99 down, $415 monthly payments, 24 month lease with 10,000 miles per year (I drive very little, so this isn't a big issue), Reg Fee of $493, $1427 tax on capitalized cost reduction, ACQ of $700, Capitalized Cost Reduction $16,794, Adjusted Capitalized Cost = $42,090, Residual Value = $41,193, Depreciation = $896, Rent charge = $8,295, Total Base Monthly Payments = $9,191, Purchase at end of lease for $41,193.  

 

Does it seem like a decent deal all things considered?  My Equifax score was a 617, though I'm not sure what score they got.  I'm planning to reach out to Audi to see if I could even qualify and what kind of deal I could get.  

 

 

New Member
gr8ful2try
Posts: 6
Registered: ‎11-05-2012
0

Re: Thanks for the answer. I guess I didn't have notificatio...

Audi came back.  They said that they could not do a lease because this is a 2012 (even though it is new).  They also just dind't think I would qualify.  They can do a purchase at $15K down, 60 mos, 5.9%, $859/month with no payoff penalty.  The payments are affordable, but would be a little bit of a stretch to make assuming zero commissions, which seems unlikely for the forseeable future though you never know.  I'm leaning toward the lease, but open to advice.  

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Creditaddict
Posts: 20,909
Registered: ‎10-23-2007
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Re: Thanks for the answer. I guess I didn't have notificatio...

For what ever reason Infiniti won't show APR specials on the convertible but I would assume under 5% at best rate, I had 4.9% for 72 Months on QX and although totally different times, they have not really gone to far off those APR's on today's cars but leases have gone up on the QX.

I have not been in this Audi or drove a new one in some time so I will give you the luxury but as for sustaining value, I would bet money on Infiniti over Audi... but could be wrong wrong wrong.

VW=Audi

Ifninti= Nissan

 

I would buy a Nissan, I was trying to buy a VW so I say this with hesitant, but I rather buy a Nissan OVER AND OVER before a VW!

 

with $20k down, I think it is SILLY to lease!

If you are scared about high payments from the standpoint of paying them with no commission take the loan 72 months with $20k down... you should fall under $650/month

if you are in California PM me... but Infiniti is usually pretty straight forward which is another reason why I LOVE THEM!!

 

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