Poor credit leasing - buddy declined for ford but OK for jeep?

[4FordFamily]

Have a buddy with a 580 credit score, no bankruptcy, foreclosure, or judgements. He was accepted at jeep for a lease on Cherokee but declined by ford for a lease on an explorer.

Does he have any options? Better to try another dealer or same restrictions?

Why would Chrysler be ok and not ford?

I tried to convince him to come over to the blue oval "dark side". Anyone have experience with this? I work in the finance/lending industry so I am somewhat informed but also confused as to how this can be.

I am new to leasing I just leased my first vehicle (my '16 explorer) so I am less useful than I should be.

 

[blwnsmoke]

It is actually pretty simple.. Ford doesn't have to sell your buddy a vehicle where FIAT has to. Ford has become very protective of their loans and making sure someone actually qualifies and can pay for the vehicle.

Perfect example of FIAT, they had 113 billion in revenue but only made 377 million in profit. FIAT is willing to gamble and offer low credit score customers a loan/lease because they need to sell a vehicle and make money.

Ford on the other hand made 7.4 Billion in profit (see the difference??). Ford credit made $232 million in profit..

Only .12% of their loans are 60 days past due and their average FICO credit score was 741 which is unheard of in the industry.

Ford has tightened their belt.. no more low credit score loans to have to write off ever since they have recovered from the automotive crisis. Ford is Ford, if Ford denied the loan, it is denied, doesn't matter the dealer. He can try a bank for a loan but not for a Ford lease.

FIAT is going to either go under, sell off other brands or merge with someone else. They've already tried to get GM to merge with them, they sold off Ferrari because they needed cash, they've delayed much of their remodels, they are killing off 2 models.. they are just in BAD shape all thanks to Sergio.

 

[chefduane]

^ What he said. I think the housing meltdown due to the insane mandate of Dodd-Frank taught a lot of folks some lessons about money lending.

 

[tmg19103]

^ What he said. I think the housing meltdown due to the insane mandate of Dodd-Frank taught a lot of folks some lessons about money lending.

Ford learned it a ways back. Ford did not take auto bailout money when the economy tanked when the real estate bubble burst. They continue to play it smart enough. This is one thing I really respect about Ford

Overall, the auto industry the past several years has been pushing subprime auto loans with extended durations like crazy.

That bubble popped this past summer/fall, but due to all channel stuffing by auto makers dealers still have a ton of inventory to move, but I expect the industry overall to be tightening lending standards soon enough.

http://www.zerohedge.com/news/2016-...nnel-stuffed-much-lehman-and-gm-went-bankrupt

 

[182RG]

Have a buddy with a 580 credit score, no bankruptcy, foreclosure, or judgements.

However, he still has a pretty lousy credit score. He should be working on raising it, vs. leasing a new $50K SUV.

 

[4FordFamily]

I agree that conservative is the best approach it's one of the main reasons I like Ford. It's unfair though to assume his issues are due to lousy decisions. There are plenty whom divorce and error landed them a crappier score. I deal with FICO reports every day, believe me I've seen it all.

 

[Lewisra]

It's unfair though to assume his issues are due to lousy decisions. .

Personal responsibility deflection, is the major issue.

 

[4FordFamily]

Personal responsibility deflection, is the major issue.

Yeah I see that a lot, too.

 

[ocracokeBound]

Ford learned it a ways back. Ford did not take auto bailout money when the economy tanked when the real estate bubble burst. They continue to play it smart enough. This is one thing I really respect about Ford

Overall, the auto industry the past several years has been pushing subprime auto loans with extended durations like crazy.

That bubble popped this past summer/fall, but due to all channel stuffing by auto makers dealers still have a ton of inventory to move, but I expect the industry overall to be tightening lending standards soon enough.

http://www.zerohedge.com/news/2016-...nnel-stuffed-much-lehman-and-gm-went-bankrupt

That zerohedge article is bs https://research.stlouisfed.org/fred2/series/AISRSA

 

[peterk9]

Have a buddy with a 580 credit score, no bankruptcy, foreclosure, or judgements. He was accepted at jeep for a lease on Cherokee but declined by ford for a lease on an explorer.

Does he have any options? Better to try another dealer or same restrictions?

From what I can tell, his only option is to raise his credit score. No sense going to another Ford dealer since the financing will still have to be approved by the same Ford Credit.

Peter

 

[cwescapexlt4x4]

Maybe get something cheaper, increase FICO score/pay down debts and come back a few years later.

 

[tmg19103]

That zerohedge article is bs https://research.stlouisfed.org/fred2/series/AISRSA

There is a difference between the two charts. Zero Hedge chart is unsold inventory. The Fed includes inventory that has been sold but not delivered.

Fact is, consumers are really not buying anything but cars. Retail sales weak both online and in stores over the holidays. Home sales have slightly improved but still historically weak.

Yet cars are flying off the shelves. Two reasons. First, people hunkered down, bought used cars and held onto them after the '08 crash and now need a new one. Second, the past several years auto makers have extended the duration of loans and lowered lending standards.

I stated automakers are now starting to tighten their lending standards, which will cut down on production/inventory. The Fed chart you posted makes that point as as you see a dip recently in all inventory - including sold but not delivered. The Zero Hedge chart is just unsold inventory. There is a big difference between the two, and unsold inventory is a concern that demand is slowing.

 

[HughCares]

However, he still has a pretty lousy credit score. He should be working on raising it, vs. leasing a new $50K SUV.

Agreed....the fact that he has a lousy credit score but still believes he should be in a higher priced vehicle he obviously can't afford is amusing in itself. Building up his credit score and leasing a lower priced vehicle (or buying an older used one instead) is what he should be concentrating on. No wonder so many people today are in bad/poor financial situations when they let their "wants" override their "needs". Just stupid....(just because you can afford the payments doesn't mean that you should do it)
Live within your means people....

 

[peterk9]

I don't need an Explorer Platinum but I want one.

Peter

 

[182RG]

Live within your means people....

$20 says a new Cherokee is in his driveway...and he's already buying mods. What a great society we live in....

 

[Lewisra]

$20 says a new Cherokee is in his driveway...and he's already buying mods. What a great society we live in....

Can you afford that bet?