Past Repossession Effects on New Lease?

Anonymous · ‎08-27-2011

My credit report reflects a repossession from spring 2010. All payments have been on time since that incident. When I'm ready to apply for a new car lease, will that repo automatically disqualify me? Or is it just one of several factors contributing to the total credit score that they'll base a decision on?

Anonymous · ‎08-27-2011

You are probably not going to be able to lease a car for a long time , until that repo ages.

Leases require better credit/scores/history then purchases.

You will probably not be able to lease/buy from the company you were repoed from

Anonymous · ‎08-27-2011

usmc58555, you are following me. I need it, though, and appreciate it. Good advice.

So auto lenders don't rely 100% on the credit score -- they also pull up any dings related to the auto history? Do they pull any other specifics?

Very green here, as my scores might suggest ... appreciate your patience with me.

Anonymous · ‎08-27-2011

Although it is good to gain anectdotal advice from other persons experiences, CREDIT SCORE ALONE DOES NOT DETERMINE A DEAL, RATES OR APPROVAL.

Other factors:

debt to income ratio
gross monthly income, in most cases if you do not make $1,800 a month not counting overtime you are not getting approved.
past experience with that specific lender (good track record may get you approved/bad track record will get you declined)
time on job
length of unbroken employment
Loan to value of new car
type of employment (FT/PT/Self)
equity carried into deal (either positinve in the form of downpayment or negative equity from a trade in)

And last but not least: The WHIMS of the bank, They could suddenly decide that people with a certain score in a certain area are no longer viable, or suddenly decide to lower standards. Or to lower standards for the rest of the month, or to lower standards only on people buying trucks, or people financing between $7,000-$10,000.

ETA: In your case, where it seems you are turning in a lease and will need a new car, I havce some very unpleasant news: You need to save up about 30% of the sticker price of what you are buying to get a deal, or have a co signer. You can also explore with your current leasing company the possibility of buying your lease out.

If you are looking at buying a car this year, there is very little you can do to mitigate the effects of the REPO, unless you have other outstanding issues that you can use the credit repair aspects of these forums to help you with, you really are throwing money away buying into scorewatch or anything like that. A car dealership is going to use an AUTIENHANCED score that you cannot buy/purchase. If the repo is the only baddie, you need to concentrate on mitigating it by saving downpayment, and that may meean making very unhappy choices to save a down payment.

If you are currently leasing, you must accept the fact that as of right now you probably will not be able to buy your lease out or lease another vehicle, and that you may have to make serious sacrifices to save money by the time you need a new car.

Also, if your lease is ending this year (or when it does end), you need to call and ask what end of lease fees you are going to be expected to pay. If you cannot get into a new car (loan or lease) the dealership may not be so willing to forgive/roll in the fees and you may be forced to pay out of pocket several thousand dollars to both pay off your lease, and then still pay several thousand dollars to get into a new car.

Anonymous · ‎08-27-2011

Thanks. Your information is leading to more questions. Hopefully they'll get progressively more intelligent.

My income, job history, length of time employed, etc. are all extremely healthy.

It's literally my credit score and history that sucks.

My question is, are auto lenders rigid or human? Are the lines hard and fast, with no consideration of background, story or explanation? Or can the positives (such as what is listed above, or even a story explaining credit issues) weigh in?

Anonymous · ‎08-27-2011

@Anonymous wrote:

My question is, are auto lenders rigid or human? Are the lines hard and fast, with no consideration of background, story or explanation? Or can the positives (such as what is listed above, or even a story explaining credit issues) weigh in?

A credit union may be more forgiving and willing to work with you. A dealership will work with you within the realm of what they can do (ie: loan/deal structuring, vehicle decisions, which bank they submit to), as it is their job to sell a car. You will need a downpayment. You will be considered special/secondary finance

Anonymous · ‎08-29-2011

Curious if you have an opinion on whether a small, private bank is more or less nimble than a credit union for the purposes listed in this thread. Thanks!

Anonymous · ‎08-30-2011

@Anonymous wrote:
Curious if you have an opinion on whether a small, private bank is more or less nimble than a credit union for the purposes listed in this thread. Thanks!

We speak in generaliites here. Credit Unions are "member owned" and trend to have a higher service level/risk threshold, commitment level to there customers then traditional banks.

There are credit unions that are more stringent in lending then banks. (Penfed for example)

There are banks that are less stringent then credit unions (although they are few and far between.)

I remember reading an article last year about a local bank in either New York or New Jersey that never got involved in all the risky (which also was high profit) lending, housing lending and lending to speculators) that everyone else was doing. The CEO telling how he had to fight the board as they wanted those loans and the money that came and he stood up for not doing it. History vindicated him.

Can there be a small local bank that will be more lending friendly to you then others? Yeah.

Can there NOT be a small local bank that is more lending friendly to you? Yeah.

Just choosing a Credit Union does not guarantee you a loan approval. In fact as I said you could actualy get a credit union that has lending standards you as a person can never meet.. Either institution may have specific lending criteria that you may or may not meet such as time at employer or gross income.

What exactly are the purposes of this thread? You expressed interest in a lease. You aren't going to get a lease. But again we speak in generalities, there is a chance you can get an approval on some type of a lease- I am not God, but I doubt the terms are going to make sense to contract in. Just as an aside, non manufacturer (bank leases like from Capital One) leases have terrible temrs and rates and are never a good idea.

The one thing I have not heard you express is an acknowledgement of what I have said, that with the information given, you will not be able to lease and you need to save some serious cash down for both your end of lease fees and any damage/extra charges.

If you are still trying to posture for a lease, I'm done. I can only say you are not getting one so much. My advice to you has not changed:

1- Explore your current banking relationship by going there credit report in tow and see what they can do for you in a hypothetical situation for a loan/lease

2- Save money NOW for your turn in fees new car purchase. Yes you will have to sacrifice as you will ned real money down.

3- explore your credit union options, local ones with reputations to lend, or if you have a military service background, or family in the military try for Navy Federal Credit Union,

4- If the scores you posted are from myfico, which they are probably not since you have all three scores, understand that your AUTOENHANCED score (used by lenders for the purposes of car loans), since you have a recent repo is PROBABLY LOWER.

Anonymous · ‎08-30-2011

Again, many thanks for your responses. I asked for an opinion, and you certainly gave one. You've also shared strong, useful information. I will say, however, that the need for me to "acknowledge" you in some way is out of line. That is not our relationship in this thread or on this site, nor should that be your expectation.

If you feel you run the risk of repeating information, perhaps don't respond at all. Again, thanks for the help thus far.

GregB · ‎08-30-2011

@Anonymous wrote:
My credit report reflects a repossession from spring 2010. All payments have been on time since that incident. When I'm ready to apply for a new car lease, will that repo automatically disqualify me? Or is it just one of several factors contributing to the total credit score that they'll base a decision on?

All payments on time is expected, not a significant accomplishment. A repo, particularly one that recently, is a huge negative on your credit. It will be far, far worse on the Auto Enhanced versions of a credit score that most auto lenders will use. That will make it very difficult, or should I say expensive, to get another car financed. A lease will be much more difficult than that.

It might be a good idea to work on GW to get the repo removed.