So first off, sorry if this has been answered, I searched and didn’t see an answer.
To my question, do dealerships/lenders try to give a lower residual with a good money factor to make up for people with less than optimal credit?
I went through a bankruptcy last year, and according to my experian credit monitoring service I was around a 660 on FICO 8, today when the dealership pulled my credit I was at 630. Either way, when I told them before authorizing my credit check and after they sent it out, they came back both times with an rv of 44% when I’ve spoken to other dealerships and the the rv ranges from 50-54% on this vehicle.
Residual is set by the bank. Most likely they used a different bank for financing due to the credit score. US Bank for example will tend to have lower (more realistic) residuals on their leases versus the captive finance company.
The finance source sets the residual, so they may need to switch finance sources to secure an approval. Many of the captives will also force the lower tier approvals to do 15k mile per year leases, so you won’t get the benefit of doing a low or ultra low mileage lease. I’m sure the leasing company views it as insurance, since in their eyes credit score is directly correlated to the type of care the lease vehicle will see.
If you’re looking at Chryslers and there is a much lower residual it is because they are looking at a US Bank lease… however, based on the credit details provided, I don’t think the lease would be approved by US Bank anyhow (bankruptcy on the bureau is enough for a US Bank turndown without the application even getting to a human).
If you do go the Chrysler-Dodge-Jeep route, Ally is probably your best finance source based on a details provided.
Hey, so I don’t know if I should start a new thread for this or not. Spoke to the finance guy directly. he says they are showing a 50% RV and going through Chrysler only. When I plug the numbers in they give me to the lease calculator I am getting completely different numbers. What am I doing wrong?
The dealer’s calculation looks about right to me. What isn’t reflected in the lease calculator is the security deposit on the dealer’s papers.
In addition, the calculation made by the dealer contains $1000 customer cash. If that’s all that’s due at signing, then the ~$450 payment makes sense.
As you can see, in your own calculation, the amount due at signing is $2,400. If the dealer is only asking for $1,000, those additional $1,400 get rolled into your monthly, yielding a higher number. I’m sure you could get the dealer to structure a deal with $2,400 due at signing, and if they did that, the numbers would probably really close to what you found in the calculator.
