Bank approved lease but wants 20% down?

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So I’m trying to lease a car for my weekend car (McLaren). New update at the bottom.

I have never been denied any car loans I’ve went after (neither for this specific one either).
800+ credit, 15-20 car loans in the past 10 years (leases/financing including 3 new exotic cars recently just to add, so it’s not some crazy idea that I’m pursuing here).

The bank in question is Ally Financial.
The car is new, and never titled and has a HUGE discount so it’s a great deal. I got approved with my wife being the co-signer and they asked 20% down (for the total car mind you, not a 20% of the payments kind of thing), so he recommended I go for a solo lease, once again, approved but same thing regarding 20% down.

I have leased multiple cars (at the same time) that add up to this cars value and got approved with 0 down (it’s a lease, why would I put money down in case of an accident).

They want 20% money down for approval though? This adds up to about half of ALL my payments just in upfront down payment. I told him, I don’t want to put this money down because if I total the car, I’m out a lot of money. I’m starting to think the sales manager is actually trying regular financing rather than a lease in this case.

Has anyone been in this boat before?

It’s a pretty big bummer in my eyes, since after putting 20% down, my payment is still relatively high! So I put 20% down of the total car, only less than HALVE my payments, and carry the risk of losing money if some person slams into me at a red light.

EDIT: My total monetary risk here is LESS than me just straight up financing a new loaded 6 series just for clarification due to the car discount.

UPDATE 11/23: What a douche move by the dealer, I called the bank and personally ask them about the money down and they say: “you’re approved without any money needed upfront. I suggest you call your dealer and ask for the reasoning behind the 20% down”.

They literally show me a printout with manager signature with total due at signing of only drive offs with a 20% discount on the car (a good deal for the car), then upon approval, tell me I owe them 20% down. Aka… paying for MSRP. Wow.

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Have you had a car payment this big before?

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Yes, I’ve actually had car payments only off by 200 or so on my other car (which I financed instead of leased). But at the time, I also had a $1100 car payment on the side as well in addition to 2 work vehicles (300 & 400).

Basically, this is less risk than my previous situation.
Another thing also to consider is the fact that this is a lease, so my total risk is only: Car cost - Residual = which is only 30% of the cars value. The residual is 52%, I’m getting almost 20% off, so it’s a smaller risk than if I were to finance even a 120+k car (which I’ve had no problems getting approval for in the past).

4

That seems strange. Are you sure the salesman isn’t trying to pull something.

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It really does sound weird. The total money down is eclipsing over half of the total payments due for the lease period. Also, I texted the guy and asked for the reason, and he said, it’s “because your most expensive car you’ve had is $xxx,000 and this car is $ more, hence the need for the money down”.

The car he’s talking about? My financed exotic that I was paying to OWN.
My leased car was more than this amount that he mentioned (but less than this car in question). So I’m pretty confused. To clarify even further, I’ve had 2 cars at the same time, that add up to about 50-75k more than the car I’m trying to lease (both were leases as well with 0 cap cost reduction).

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If you’ve recently just leased three new exotic cars, without knowing your financial status maybe theres a debt to income threshold you are butting up against? Unless you are rolling in negative equity from something else, not much else makes sense because it appears that Ally has a maximum LTV of 115% of MSRP for McLaren either through markup or negative equity being rolled in.

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My debt to income ratio is much less this year because of new work (aka more income, less debt), and less fun cars. So that’s why I’m a bit confused, I’m calling Ally tomorrow to sort it out. 50k down on a lease in any case is so unheard of for me.

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Try working with the finance manager to waive the down payment requirement.

Bank statements, W2s etc… can be provided to maybe waive that requirement. Ally could
Also be looking to protect themselves generally on these exotics in case of an economic turn down.

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Fair enough, Ill take a look and see what I can pull off.

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If the risk of acident is the issue rather than the upfront money maybe a one pay lease would work better, I think think I read ally gives 1-1.5% off apr if you do so you would have some savings also.

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Are you self-employed?

Regardless…

The down payment is to mitigate risk for the lessor, and there may be macroeconomic factors that are driving the tightening of credit terms for certain types of transactions (i.e., it may have nothing to do with your specific profile).

I would bet that statistically, a McLaren lease would be among the first obligations a consumer would let go if things started to go south.

Economists have predicted 11 of the last 2 recessions, and if you’ve read the news in recent months the topic has been broached more than once.

13

I am not familiar with leasing exotics but a suggestion I have is to look at the used market. Most owners of exotic sports cars have two things in common, they drive them very little and like to always have something new. So these cars are often flipped every 12 months and driven only a few thousand miles each year. There are many unique programs offered by exotic car dealers. Example is a 488GTB, 2019 with 3800 miles on it. The dealer offers the car for retail sale but the contract also provides that you can trade the car in top them after 12 months/5000 miles for what you paid minus $25,000 toward your next exotic.

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Large down payments on exotic leases is not abnormal at all because there are so few lenders that offer leases on them. These are all manually underwritten because, while not many of these leases go bad, when they do they result in big losses for the lessor. Westlake Financial and Amazon Leasing do the bulk of these types of leases and they both require large down payments. Ally seems to be following along because they can when there is no real captive.

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Hope you resolve it. Still without true numbers no clue what you saying. I would hope you would grace us full info.

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The other reason for the down payment is for the dealers profit, they have an approval for a certain amount. Your down payment determines how much they can sell the car for, less down payment, lower selling price or more down payment, higher selling price. It’s not as simple as the bank wants X amount down, there’s allot more to it and without any details on pricing and rates it’s hard to know what’s going on. And when shopping exotics like this, they kind of have you by the cojones because there are not allot of dealers or cars around to shop the deal.

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bump for original post updated.

Basically the bank approved me for the full amount, but the dealership wanted me to stuff their pockets and say the bank was asking for it.

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18

That’s impressive!

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One of my contacts runs McLaren Boston in Norwell MA.

I don’t know a thing about their deals. But if you would like a contact who I know is a good person/very reputable, feel free to ping me.

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I really appreciate it. Feel free to PM me @Bostoncarconcierge

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I called that one!