I just saw this offer: $339 / month for the CTS. Question is if Cadillac looks only on credit score when decides what tier I’ll be? Or Like Dodge / US Bank will give me hard time and put me in tier 3 because I don’t have loan history? (my score is ~751 - Dodge doesn’t care, they want you to have a loan on your credit history. When I applied my credit was even 781 and still tier 3…)
All auto loan institutions including those that do leasing will look at your auto FICO scores.
Having no auto history will be viewed the same by lenders. Developing an auto loan history will definitely help you immensely with getting cleared for leasing.
You won’t know for sure if you’ll be approved unless you actually apply. Too many inquiries without making a purchase will reflect poorly what history you do have, however.
Didn’t you previously say that you made inquiries a few months ago trying to get a challenger?
Yes. Charger, not challenger. See also in my question. Therefore when I saw today the Cadillac, I’m first asking here before do another credit application. On Sept. my credit score was 781, now 745 because I tried in few dealerships to get the Charger, but sometimes was put on tier 3 and the price jumped to $500 / month, sometimes I got denied. Now my score is 745, so wondered if Cadillac only looking on score, or same story like the Charger
Most likely same story as charger, if anything it’ll be worse because of the lowered credit score and inquiries without actually taking a loan.
Have you thought about buying a cheaper, used car with a lower financial commitment than a luxury sedan like a CTS? Banks take those types of things into considerations.
No. don’t want with dealing with selling the car. Rather lease a car, pay monthly, then bring it back at the end of the lease.
Are there cars that only look on credit score and not credit activity? I think 745 is still high credit score…
What about if I’ll pay everything in advanced? I once was by Cadillac dealership (didn’t apply, just visited and saw the cars) and asked what about if I’ll pay the whole lease in advanced? They agreed and they said my monthly month will be like tier 1 - is it a good idea?
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It’s called a “one pay” and it’s definitely worth exploring. I don’t know if the same credit situation applies.
Best of luck.
Your credit score is never a specific number. There are many formulas used that vary depending on the criteria of the lender requesting your reports. For example, 10 years ago I had a couple of late mortgage payments. My consumer FICO was 681. However when leasing a Subaru, of which is handled by Chase, they had me at 712 because of 8 previous car loans/leases with a perfect payment history. Chase, looking to provide a car loan, put more weight on previous car loans and less on that mortgage. Now if I were to apply for a Chase mortgage, that score would have been much lower, perhaps 650 range.
Anyway, the finance manager called Chase and asked for a bump from 712 to 720 and Chase agreed, qualifying me for top tier rates.
You just also described the process of buying a used car and then trading in the car.
I’m not sure that one pay lease will build up credit worthiness which is what you need to do.
anyone familiar on one pay and how it reflects on loan history?
The MF on Cadillac leases are pretty low right now. On the Edmunds forum someone asked about a CTS in NJ and MF was quoted at .00024. XT4 and XT5 also have low MFs right now. Incentives not as good as December though, so would only lease a Cadillac if you can get an aggressive discount off the MSRP. Negotiate a deal and then if you get a good price mention your situation, maybe they can get you to a higher tier credit rating.
This is what I was thinking… he has the cash to make a one pay, but doesn’t want to start car loan history by getting a cheaper used car for two or three years and then simply trading it in or selling it?
I really don’t think selling a used car is THAT much of a hassle, but to each there own.
Trading a used car in or selling to a different dealer is easier than turning a lease in, IMO. But whatever, OP can keep making up reasons to not go this route and continue to bomb his credit score with credit rejections.
Interesting take on this. I’ve returned leases AND sold/traded a car I owned and the latter always seemed like much more of a hassle. Maybe its the NE market that I’m in whereby the dealer always wants to fight to the death…
The credit score you’re looking at might be different from the credit score that the dealerships / USBank are using to assess your credit worthiness. Where are you getting your credit score from? Most people use FICO, but the free credit monitoring websites like Credit Karma uses Vanguard 3.0. So while Credit Karma will give you a general indicator as to how you’re credit is moving (up / down) it’s not going to be an exact match for what your FICO will report.
There’s also variants of the FICO score, in which they tweak the calculation of the credit score based on risks for that specific industry. So on the surface your credit score is good, but the FICO Auto Score 9 XT also looks at how the rate of your credit card balances are going up / down, how much more over the minimum payments are making, and the rate of credit utilization over the past 3 years.
Exactly. I can make one pay, but don’t want a used car. I also asked dodge if I can make one pay on the Charger - they said no. Only Cadillac said yes. Is it a risk to make one pay? What about if the car is total / get stole? will I get the money back? Or I loose the entire amount ?
So let me ask you - assuming that I’m buying now Charger or new Cadillac - can I sell it after 1-3 years to a dealer? Is it how it works in the US? I was thinking that dealers would only buy cars in a really bad condition, paying very little.
Would dealers pay the market rate for a used car? (it’s doesn’t make sense - if they need to sell it to somebody else, they need to make some margin - why would they pay me then the market rate for a used car?)
You said it easier than turning a lease - in other words, if I buy a new car, pretty much keep it in a good condition, then after 2-3 years go to any dealer - they’ll pay the market price for the car?
Whoa, there are some major misunderstandings here, maybe I can help you out…
Dealers will give you what some might call a “trade-in” value for your car, but really it’s the wholesale value. The wholesale value for a car assumes the dealer will need to refurbish the vehicle and intends to turn over a certain percentage of profit on it so when they turn around to sell it they’ll get the “retail” value.
Retail is basically buying the vehicle from a dealer or institution where as the “private party” value is buying it from an individual person who’s not considered a dealer. The private party value tends to be in between the wholesale value and the retail value which is why people say you’ll get more money for your trade if you try to sell it on your own.
For example, let’s say a 2015 Lexus IS250 with 35k miles costs 25k dollars at a dealer, or the market retail value… the dealer more than likely paid 18k or 19k at either an auction (the “wholesale value” or from a trade, if they decided to keep it and retail it. So you’ll pay 25k for it, but if you wanted to turn around the next day and sell it back to a dealer or trade it in, you’ll get less than 18k for it. That difference of 18k and 25k is the “negative equity.”
Now, if a dealer says that they are going to “wholesale” your car and sell it at auction, expect to get the absolute worst offer for it. If they will try to retail it at their store, then you may get a decent offer since they believe they can turn it around for a quick profit.
You can take care of the car all you want, but my experience has been that dealers will tend to always offer you the “wholesale” value at trade regardless of condition because they’re assuming worst case scenario and want to make the most amount of money off it.
You can do research on the different values of your car by going to Kelley Blue Book, NADA, or asking someone with access to the Mannheim auction system. Mannheim is probably the most accurate representation of what a dealer would offer.
You can sell your car at any time once it becomes yours, but just know that unless you’re buying a Ford GT, your car will always be worth less as soon as you buy it.
This is why I recommended you finance a cheaper used car. You have less risk to assume while you build up your credit. A lease isn’t bad, but you don’t seem to be having luck leasing what you’re interested in.
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After applying I got a letters from US bank saying we got denied, what was my credit score, etc.
Actually , in a previous answer on this forum, somebody suggested that I’ll ask the dealership for the reason I got denied. I was thinking, going again, ask them, maybe they’ll not want to give me the reasons, etc. - then, I see one day on my desk the letter from US Bank. I’m looking at it to see again what they exactly writing there - besides my credit score it says very clearly I can get a full report within 60 days for the reasons I got denied. Just need to mail them the request. Which means, I don’t even need to go to the dealership.
So I’d say the advice I got here was a very good advice.
The denial letter from US Bank didn’t give you a list of possible reasons for your denial? The few denial letters I’ve gotten when I was younger always had a bulletized list of factors for their decisions.
They usually included lack of credit history being the major factor for the consideration. To be expected for a 20 to 22 year old kid.
A single pay on a GM saves .00042 (1%APR) MF for 24-30 month lease or .00073 (1.75% APR) for 36-48 month lease. Most Caddys right now are less than .00042 except for some Escalades, so doing a single pay makes little sense. GM requires minimum MF of .00001 (.02% APR) You would save more money by putting the single pay funds into a retirement or brokerage fund than doing the single pay. Plus, you wouldn’t have to deal with getting some money back if the car was totaled/stolen or if you wanted to get out of the lease early.