How flexible are lease rates? Or should I buy? - Bimmerfest - BMW Forums



Go Back   Bimmerfest - BMW Forums > Everything Else > Off-Topic

Off-Topic
Everything not about BMWs. Posts must be "primetime safe" and in good taste. No personal attacks allowed. **Note** - Political posting is not allowed (or welcome) at Bimmerfest.

Reply
 
Thread Tools Display Modes
  #1  
Old 07-08-2003, 07:53 AM
Hercules's Avatar
Hercules Hercules is offline
Nick Burns, the Comp Guy
Location: New Jersey, USA
 
Join Date: Jul 2002
Posts: 7,645
Mein Auto: 2003 Audi A4 3.0
How flexible are lease rates? Or should I buy?

Hi all... few more days till I get my car, so I do have questions...

I'm hearing things like 9.1% interest on the lease for my car which to me... is pretty outrageous.

I am getting lease rates of 4.72% from LeaseCompare.com, however sadly I'm not getting approved for those because I don't have prior auto credit history and, unlike with Mazda Financing, I can't co-sign with my father (who does have auto credit history), only a spouse. Admittedly, I've contacted the site and they told me if I'm a first time car buyer, they are not a good service though in the months ahead they intend to remedy that (doesn't help me now though!)

How able is the rate able to go down from the 9.1%? I know dealers have multiple financing options available to them, but how flexible does it get? My credit rating is quite good, FICO score of 701 plus my father is above 700.

The thing is, since I'm not getting approved for 4.72% from LeaseCompare.com as of now, I will still try to use their rates to bargain down though I am curious... should I instead just go and finance it for like 72 months, with 4.5% rates from PeopleFirst? The payments wind up being the same and I'm not putting a whole lot down (thus the 72 month period to keep payments low). I know I'll likely get rid of it in three years which is why I went with the lease instead of the purchase but I wonder...

I'd appreciate ANY insight you can give me. I'm really getting close and I need to have my info down pat!
__________________
Recently Played Tracks:
Reply With Quote
Sponsored Links
Advertisement
 
  #2  
Old 07-08-2003, 10:56 AM
Galun Galun is offline
In a ton of debt...
Location: SF Bay Area
 
Join Date: Aug 2002
Posts: 1,837
Mein Auto: Cars
I will take a stab at this.

Chances are, if you can't get approval for the 4.72% lease reate, you cannot get the 4.5% peoplefirst rate. Your score of 701 probably doesn't matter, since you don't have a payment history. There are strategies to get ridicously high credit scores. Some parents "approve" their children to use their cerdit cards since they were born. By age 18 their children had a clean 18 year history with 800+ FICO score. It doesn't mean they can go get the lowest interest rate on a car since they had no payment history. However, your dad may be able to help you get the lower rate if you buy, since both of you can cosign. It will be a great way to start building a credit history with installment payments (rather than revolving payments, aka credit card debt).

Search the forums and the net for the lease vs buy question. Based on your situation, if you are reasonably sure that you want another car in 3 years, you should lease. However, it seems like you are thinking in terms of monthly payments instead of total out of pocket cost over the entire transaction, which leads me to believe that you are kinda stretching your limits in getting this car. I would recommend against that, but it's your money and your decision so I will just leave it at that.
Reply With Quote
  #3  
Old 07-08-2003, 11:04 AM
Hercules's Avatar
Hercules Hercules is offline
Nick Burns, the Comp Guy
Location: New Jersey, USA
 
Join Date: Jul 2002
Posts: 7,645
Mein Auto: 2003 Audi A4 3.0
I'll be stretching myself for about 4 months, this I know... after which point I'll be hired as a permanent employee and get all the salary and perks that go with it.

My dad is co-signing the lease but with LeaseCompare I can't have a co-signer unless it's a spouse. Thus, when I go to the dealer to get financing it won't be a problem... the problem is the online rates that require only me on the papers and not my dad which makes approval harder.

That said... how flexible is the dealer when I bring him a quote? Let's say I bought him the paperwork from LeaseCompare.com that shows the 4.72% rate, the residual, and the monthly payment. Would they match it? Would they beat it?

Or would they not do either and kick my ass out? That's the real part that's confusing me.
__________________
Recently Played Tracks:
Reply With Quote
Sponsored Links
Advertisement
 
  #4  
Old 07-08-2003, 11:15 AM
Galun Galun is offline
In a ton of debt...
Location: SF Bay Area
 
Join Date: Aug 2002
Posts: 1,837
Mein Auto: Cars
They won't kick your ass out, you are their customer! Worst case is that they won't lower their rate. I don't think they will lower the rate becuase 1) it's probably a rate set by mazda financing (which is complete different subsidiary), and 2) they will just ask you to go get it at leasecompare instead of doing it at mazda financing.

Like I said, the advertised rate at lease compare is for people with great credit history. When they run a credit check on you and see that you have no credit history, they will know that you can't quality for the low rate at lease compare. Think about the American 0% financing deals. Not everybody qualify for it, you probably need FICO score of 750+, and you cannot take the 0% financing deal from GM and match it somewhere else.

Compare the payments of buy vs lease. You may want to think about doing the 72 month buy option, live like a starving student, and use all excess cash flow to pay down the principal. That's what I did with my first car. It took a lot of discipline, but I paid of a 15.99% interest rate loan in 1.5 years (instead of 3), and built a solid credit history.
Reply With Quote
  #5  
Old 07-08-2003, 11:36 AM
Hercules's Avatar
Hercules Hercules is offline
Nick Burns, the Comp Guy
Location: New Jersey, USA
 
Join Date: Jul 2002
Posts: 7,645
Mein Auto: 2003 Audi A4 3.0
My FICO score is 701 (just checked a few days ago at Equifax) so that's a non-issue. I've been working for 5 years, this is my second full time job, I've had credit card debt and paid it all off, etc... my credit history is pretty solid.

The reason LeaseCompare won't offer me the rate is because I have no *auto* credit history... I spoke with them at length about this and they are making changes now that will help first time buyers with no auto credit (but otherwise good credit) to get into cars, though those changes won't happen for some time and won't benefit me right now.

My understanding was, that Mazda would bend and flex because most of the money is made on the financing and not on the car itself, which is why it would be stupid to lose the money they would get and tell me to go with LeaseCompare. I have a coworker here that used to be a car dealer and he said if you bring them the quote, they'd likely just match it so hopefully that will be the same in my case and thus I can walk out a happy camper.

All I want to know is if there would be some leeway in the rate, especially if you say you're taking your money elsewhere...

So don't think I have no credit! I have good credit (for my age hehe), just need to get on a lease and then I have auto credit too! :
__________________
Recently Played Tracks:
Reply With Quote
Reply

See More Related BMW Stories


Forum Navigation
Go Back   Bimmerfest - BMW Forums > Everything Else > Off-Topic
Today's Posts Search
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On



Forum Jump


All times are GMT -7. The time now is 09:30 PM.


Powered by vBulletin® Version 3.8.8
Copyright ©2000 - 2020, vBulletin Solutions, Inc.
vBulletin Security provided by vBSecurity v2.2.2 (Pro) - vBulletin Mods & Addons Copyright © 2020 DragonByte Technologies Ltd.
© 2001- VerticalScope Inc. All rights reserved.