I am being told I can’t get Tier 1 credit interest rate for my lease because this is the first time I am having car payments. I have a 750+ credit score, never missed or been late on any credit card payments. I am wondering if the finance department is trying to pull a fast one on me. They are saying I need a cosigner to get the tier 1 credit interest rate.
Alfa Romeo doesn’t use a MF in their leases and uses Ally Bank interest rates. Tier 1 is considered 0.37 for a 24 mo lease.
Happened to me when I leased my first car - needed my parents to co-sign. I was pretty young and had a great credit score, but no prior revolving loans
Is it over 750 on the basic free credit score sites? They use a very generic formula that gives you a decent picture of your credit score, but there are specific FICO scores just for auto lenders. They put more weight on things that could tank your auto lending score but would put a smaller dent in your generic credit score. You’ll get dinged heavier for no vehicle credit history when applying for an auto / lease loan compared to having no vehicle credit history when applying for a credit card.
Thank you everyone! I really appreciate the input.
I was told I can get the tier 1 interest rate if I have a cosigner with a higher credit score than mine. My cosigner would be out of state and the finance department was saying the car would have to be registered to the cosigner and not me. Is this true? She also said that it would hurt my credit outlook if I have a cosigner because on the next lease or purchase the bank would want another cosigner.
Your cosigned will be first on the contract since they are approved for tier1, so that is where the car will be registered. Also, it will not hurt your future credit outlook to have a cosigner as long as you make your payments.
Interesting. I financed my first car in 2010 - a new Challenger. I put down $8k and financed $32k. Ally approved me at Tier 1 for their 0.9% promotional APR. They never even asked for verification of income. I had assumed it was because my score was around 730. Maybe it was due to the amount I put down.
The thing most people don’t know is that they have a different credit score for different types of loans. Most car companies use specific data to generate the score that deals more with non-revolving credit because you’re only required to pay interest on that type of credit. Not knowing your specific situation but they should be able to show you the report they pulled and also Alley usually has tougher restrictions that automakers financial companies.
On my first lease we told the finance if I don’t get qualified without a co-sign then we would walk away from the deal. Finance pushed me thru on my own.
Ally pulls your FICO score. And @DNJA you are right, the score I was shown was different than what my credit score was when I checked my score on Credit Karma.
Update: I worked out a deal to offset the cost of the extra $500 in interest by getting the dealer to reduce the cap cost.
Thank you all for your insights. I’m happy to say, I finalized the deal!
