I’m helping a relative who has struggled with some periods of unemployment that resulted in a repossession in the last 7 years. They just started a new job that pays really well, but their credit is so bad we’re running into issues even with a co-signer. We were told by Kia that with the repo on his record he would even be denied for a single payment lease. This new job is going to be demanding so I’m just trying to get him something that won’t have any downtime and require only standard maintenance which is why I’m leaning towards new and not used. Getting a 2017-2018 CPO car is seeming like the only option now though.
Before I totally go that route, does anyone know what brands would allow a single payment lease to someone with a repossession on their report and a very low score in general with a co-signer who is above 740?
In general, a lease is harder to qualify for than a purchase.
Aside from the mere presence of the repo itself, one old serious derogatory like that is going to hurt scores for the entire time it reports, however the impact lessens over time. In order to have both an old repo and “very low scores” currently there must be other negatives reporting, which could also present challenges getting approvals or palatable terms.
FWIW, for entirely different reasons we bought a 2008 Lexus RX350 with ~88,000 miles on it for $18,000, and have had exactly 0 issues with it in almost five years. You do not need to have a new car to have a reliable one.
I don’t understand financial institution mentality for not approving people who are paying for the lease upfront. Where’s the risk/reason to not approve even the worst applicants? They’re handing the money to you upfront.
According to an actuary, you are less likely to return it in the expected condition. You are likely paying around 1/3 the cars value upfront, so they are trusting you with the other 2/3rd.
why does your credit score impact your insurance rate?
So you would reach into your own bank account, purchase a car with your savings, and let a stranger with horrific credit drive it around for three years?
And then hope they will return it?
And then hope it’s in fine condition?
And if it’s in bad shape, you would assume that they’d pay you for the damages?
@rickz tough spot but time to look for a different lessor. They need to start somewhere. Someone will take the bite and hopefully, they can be trusted again.
GM has been known to do subprime leasing. IDK what the stips are, but at one time they even tossed an extra 500 or 1000 on the hood just because you had lousy credit (God bless America). Rumor has it, they’ve tightened up a bit, so not sure if it’s still possible, but you might want to talk to an F&I Mgr at a GM dealer and go from there.
I have to agree with the others. Whether fair or not, your credit score provides a gauge to any lender/creditor based on the law of averages. Statistically, those with less than perfect credit aren’t as likely to pay their bills on time/skip bills/etc. Thus the reason your interest rate is higher or your insurance premium goes up (studies have shown that statistically someone with poor credit is more likely to commit insurance fraud). The bank/insurer is taking a risk on you, and to mitigate the potential for loss, you are charged more.
It definitely sucks for someone that temporarily got dealt a bad hand, but is otherwise very responsible. But, unfortunately, that’s how our lovely banking system works.
@Electric last year cow production was wiped, now they went to the bank and asked for a loan. Will you loan them money? You need to prove that you can deliver healthy cows first. But someone will allow them eventually, they just need to find it.
I’m actually impress how the system works. Imagine they go knocking on doors and asked your history. I don’t see any loans getting approved in 1 month. lol Like what I said above, they just don’t give you money for just because. Business is business, right now, the easiest way to get a car is the crazy 27% APR from predator lender to show that you’re trustworthy. And yeah I saw an AD from GM not so long ago regarding low credit approval. GL to OP’s friend. I hope they can get what they needed.
I’m exaggerating but my wife took a 27% loan when she was 18 years old to get a car. FYI, that was 20 years ago and it was a USED “Integra”. she got the car that she wants but I’m glad she totaled it within 6 months and the dealer sold her the GAP, ofcourse she signed it. lol But after that, her credit got better and got a respectable deal on a new leased car. That’s why I can use the 27% interest coz it happened. I’ll ask her if she still has the contract, she kept all of her things before. I have no idea now if she still has it but I won’t be surprised. lol
GM Financial is pretty aggressive, you can get approved even if you’re in the 500s but it requires XS Wear and Tear coverage + 12k miles per year… Nice thing is, if you do a 1-pay, the MF is typically dropped to .00001 and expect the dealer to mark this up 100 bips
