audimaestros

Hey Guys, first off love this forum. This has the best info regarding Audi on the internet. You guys are just great in helping each other out and giving suggestions and tips.

So, I just wanted to get your opinion on my situation. I'm looking to lease a 2014 Audi A6 3.0T. My credit scores are around 750 in TU and EX. This will be my fist auto loan for lease/finance. I currently have no mortgage history or auto loan history. But, I do have a revolving credit of around $50k (all credit cards combined).

What do you guys think, my chances are in getting approved for the lease through AFS. Any previous first time leasees or experienced leasees or buyers here that can help me out. I would really appreciate your advice/opinions.

feralc

It all depends on your income, and how much the minimum payments per month of the credit cards are.
Let me share with you my experience.
I have never leased a car, I believe it is not financially smart, the rate is higher than buying and I don't like that feeling of "it is not mine" but I have financed two of them, usually I just pay cash for them because I do not like to have any debt besides my mortgage (credit cards are paid in full every month)
I moved to the US when I was 29 years old (38 now) I had no credit history obviously, because I had American Express since I was 23 years old in Mexico, they gave me an American Express here.
I was told I needed to finance a car to start building credit history, so I decided to get a used Porsche Carrera 4, everybody said no, and they told me I needed to get a cosigner. A friend cosigned and back then the rate was ridiculously high at 11.24%
I made monthly payments for a year and then I just paid off the whole balance.
I got another car, the SL55 (used as well) and because of that first year of paying the Porsche, plus never missed a payment in the credit cards, I was approved right away at 6.85% no cosigner needed.

I haven't checked my fico score in years but last time I checked it was above 800
I always pay full balances, have a mortgage, and never miss a payment on anything.
What I am trying to say with this boring story is that you might need the help of somebody to cosign the car because it is your first financed/leased car, but with the 750 score I am pretty sure you will be fine.

Tip: American Express charge cards are meant to be paid every month, so lenders see those balances worse than regular credit cards, for example let's assume you buy a 10k Rolex and pay with your credit card, and usually you don't have 10k balances because that was one special occasion, if you have a balance of 10k in a credit card when they check they assume it is a revolving debt, so if the minimum payment is 5% or 500 dollars, then that is the amount they compare vs your monthly income.
BUT in this same scenario with the American Express, they see those 10k as a a revolving balance to be paid every month, even though you usually don't have large balances.
So the best thing to do before applying to a mortgage/loan is to NOT use a charge card just like Amex for a couple of months, so the balance is zero.
EDITED: And this is very important, the percentage of usage of your credit line is very important, if you buy the 10k watch and your line is 50k you are using 20% of the credit line! because Amex do not have an specified credit line, they assume you are using the 100% of it. And lenders do not like to see more than 50% of credit usage,

Hope this helps (if helps at all)

snagitseven

I would add a couple of things to what Feralc wrote. As creditworthiness re credit cards and other revolving credit, it's not so much the credit line that counts but usage. In other words, if you carry reasonable balances and pay regularly on time, that's better than if you pay off your balances each month if you're trying to establish additional positive credit history. It's good, steady payment history over a period of timethey're looking for while at the same time their appraisal of your ability to pay the monthly payment. Another thing to be aware of, recent loan inquiries or new lines of credit can also be a negative. The longer you have had an active, paid on time account with a (reasonable) balance, the better.

The other biggest factors will be your job history, time at residence and income vs the lease payment added to your other monthly obligations. The lease company will factor monthly rent/mortgage, insurance, revolving credit payments, etc. to determine a ratio. If you exceed that ratio you'll have to find a way to reduce the lease payment, either with a cash cap reduction (usually not a great idea on a lease) or settle for a less expensive car.

Good luck!

feralc

True but by if your due date is (around) 20 days after the monthly closing date, and it gets automatically paid in full, the balance of the card is never zero because you have been using the card for 20 days, and you avoid paying interest.

The lenders do not know if the balance (when they check) is new or carried on from previous months.

irenesbob

Snagit has a great piece on this issue on the A7 board.
I am leasing my 2013 A6 P+. I do not want to try to convince anyone to lease vs. buy or vice versa. One of the factors I see is sales tax. In NYS where I live the sales tax rate is .08375 (8.375 %). The sell price on my car was $49,700 so I would have had to pay $4,162 in sales tax had I bought it. By leasing I pay only the sales tax on the delta between the sales price and the residual (in my case that delta was $24,100). That amounts to $2,018 less in sales tax for the 36 months.
Obviously I have to get another car at 36 months, so there will be more tax dues by my leasing this one. However, when buying a car you pay the full tax up front and do not get a rebate if you get rid of it early. So, if you buy and then decide to sell the car privately and get a new one in three years, you are in a way paying a lot more in sales tax. My take, anyway.

s5blitzer

So true. That is one of the downside for me. I buy all of my cars and maintain them for at least 4-6 years and live in a state where I don't get a rebate of the sales tax when I sell/trade the car. The upside is when the financing obligation is fully met, I am a debt free car owner until another new model with new technology tempts me.

mjfloyd1

How much of that sales tax savings is eaten up by lease initiation and lease termination fees? About half, I suspect. The best thing about a lease is that if you wreck it, you get it fixed and the diminished value isn't your problem. It also makes sense if you can write off most of your lease payment as a business expense. But everyone has their own reasons. One man's trash is another man's treasure. ..

Mike_L

I can't lease. First off, when you lease you need to keep the vehicle stock, or plan on going back to stock before you turn it in. Not something I have ever done. Second, you have to keep the car for the entire length of the lease or get hit hard for early termination. Again, not for me. I don't keep cars for 3 years. And third, I see leasing as a waste of money. You're spending money for the car, but when the lease is over, you give it back and have nothing. At least if I buy, I have some equity when I'm done paying (hopefully. Right now I'm upside down).

The dealers kept trying to get me to lease. I just don't see it as a viable option. German cars have horrible depreciation, which makes the payments pretty high. I'd rather just buy a 8-10 month old car straight up, and let the first owner take the hit.

Omeletpants

I have leased all my cars and my wife's cars since 1989. Cars start showing wear after about 3 years and I dont have to deal with wear marks on the paint and interior. I never have to pay for any repairs or new tires. I have been able to negotiate away usage charges (wife was 1800 miles over last time) and disposition fees When Im done with the car I just turn it in and get a fresh one.

I never understood the argument about "having something" after the last financed payment. Of course you have something cause you paid 200-300 extra for each of those 42 months you were financing the car. Plus what you have is a car with wear and out of warranty.

Mike_L

Actually, with Germans thats not the case. The payments are normally within $100-150 of each other in you stretch out the loan. Using my car as an example, I'm paying $861 a month for 6 years, with nothing down. As a lease they wanted $732 a month for 3 years, with $7877 due at signing.

So I would have paid $34229 with a lease and had nothing to show for it. In 3 years I will have paid $30,996 for my financing, and still owe the same, but it will presumably be worth more than that, so I'll have positive equity in the car and still have a car I can sell to pay it off.