Tier 1-3 Breakouts?

Ask the Hackrs
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1

Is this Tier breakdown still correct?

Tier 1: Above 700
Tier 2: 660-699
Tier 3: 620-659

Also, I know leasing in general requires a better credit score than purchasing but what’s that magic number where it makes sense? Does a hackable deal require a number higher than the number you would need to get approved in general?

2

Were those numbers ever correct? So what tier is someone with a score between 670-699 or 621-659?

And you don’t mean to imply that all manufactures use the same tier ratings?

3

Typo corrected. Sorry about that. I found it 3-4 years ago before I did my current lease. I can’t recall where though but it may have been on Edmunds or something similar.

I actually figured the Tier system was universal across all makes and from lease to finance. I thought it was more of a credit score based definition. I had no idea it varied by manufacture and they determine what a Tier means to them if that’s what you’re saying is the case?

If so, I’m mainly curious to know about Mercedes, Audi, BMW currently. I assume a luxury brand would have a higher Tier 1 requirement than say Toyota or Ford.

4

Every bank is different. Here’s an example

TFS Tier1+ 720+
US Bank Tier 1 700+
CULA Tier A 740+

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5

Thanks Cody. I guess I learned something new today. I assume this is one of the many reasons besides rate that people explore the lease financing outside of Honda, Toyota, etc and go to actual banks or credit unions then to help get them into Tier 1 if they are Tier 2 with another then?

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6

You’re trying to reduce multi-variable calculus to algebra.

  1. what Cody said: different captives cut their tiers differently, many have more than 3 tiers. And:
  2. they don’t all use the same scoring model. (e.g. FICO Auto v8 vs Auto Enhanced Equifax) And:
  3. Captives don’t all generate their chosen scoring model using the same bureau. And:
    3a) some captives that agree on a scoring model and what scores align to what tiers, don’t even use the same bureau in every region (eg they may use Experian in NE and Equifax in SW)
    3b) Big bank captives (Chase I know, but I believe BofA also) have internal scores for their clients that can be used instead of standard score. If Land Rover’s Tier 1 is 720, you are a 700, but you’re a Chase Private Wealth client, they can use that to approve Tier 1.

I’m mainly curious to know about Mercedes, Audi, BMW currently. I assume a luxury brand would have a higher Tier 1 requirement than say Toyota or Ford.

You’re assumption isn’t always correct. A Honda might be tougher to lease than Maserati. Not just high-line vs not, in general it’s a matter of who puts up the money and how much metal do they want to move.

You’re missing a couple other dimensions:

Manufacturers whose captive is their own Bank (BMWFS, VWFS, Ally). Vs Manufacturers who lease through an unaffiliated bank (eg US Bank). Manufacturers whose captive is a major bank (just looking at JLR, Mazda, Subaru, who all use Chase - their tiers / stips / guidance are negotiated between Manufacturer and Bank, so e.g. your Tier 1 Subaru lease might actually be Tier 2 with Mazda).

And it changes from time to time. Appreciate what you’re trying to do here, even if it’s just a map of “clean no trade / no negative / Tier 1 rates for brand X” but I think you might be trying to reduce it a bit too far.

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7

Thank you for the very detailed response. I really appreciate the insight and explanation. I had no idea it would be so complex but it doesn’t surprise me either. It’s good info to know as I start test driving this week to decide what I want next.

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