Hi,

I am in the process of taking over my mother's Lexus and we live at the same address. I started the paperwork where Lexus ran my credit report and I was denied. I contacted them and they can't tell me why I was denied as they can't see the information. I hold tier 1 credit above 800 and I see their hard inquiry. I'm really not sure what could be the possible reason for denial and I have still not received the paperwork. I asked them to resend the denial letter so I can tell what is the reason for denial.

I have no debts and my credit is about 800+. I'm really not sure what could be the possible reason for the denial.

Any ideas?

Thanks,

 

I would check your credit reports,In some states you get 1 or 2 free a year and see if there is something that has changed first.

 

Could be age, or income related. Why not just make her payments and drive it as yours?

 

Aside from the hard inquiry, what would happen if you walked into a Lexus dealership and wanted to lease a car? Are you able to go through the motions, get approved, then walk away without following through? I don't know the answer.

If you can lease a brand new Lexus, then you will know it is not your credit, there is something else, and it is the transaction.

Say the going rate for an apartment is $3,500/mo., and a tenant is paying only $1,000, because of some agreement. I cannot wait for that tenant to leave, so that I can get market value for my property. Maybe something is going on like that. In this scenario, I don't want the tenant subleasing the apartment to someone else for $2,500, I want them out. Maybe the finance co. wants out of the deal with your mom.

 

I don't know how a lease works as I've never done one, but through the years I have found tidbits to be interesting....if you lease a car, you cannot get a vanity or special org. plate in PA, without the lessor signing off. This tells me what you can do is very limited (it's just a license plate, why would BMW or Lexus need to add more red tape and delay?). I guess it's not your car, that's the reality. It's just the possession being 9/10.

 

Yes, that is what I have been doing. But I just moved states so thought to put everything under me

 

Have you ever bought, not leased, bought a brand new car from a dealership? According to Lexus, when I leased my first Lexus, one requirement apart from credit and all the other stuff was that I needed to have at some point bought a brand new car through a dealership, otherwise, they wouldn't lease me a car. Toyota did the same thing to my father-in-law and wouldn't lease him a car because he had never bought a brand new car before and didn't have that in his history. I didn't have a problem because I had bought a car before but he ended up having to buy the pickup truck he wanted instead of leasing it. Maybe could be because of something like this?

 

Even though I'm financially fully capable of buying a new Lexus. I have never attempted to buy a brand new car before because I always had tons of points on my license. To avoid paying high insurance payments, I always bought cars under my parent's name so my insurance would be cheap even though I made all the payments. Secondly, I had a repo in 2003 but that was when I was young and stupid bought a brand new car and couldn't keep up with the payments. Long story long, I was finally ready to take over this car but now I got denied so I'll have to continue with what I already was done previously till the lease ends. My next car I can put under my name as I no longer have points on my license.

 

I always had tons of points on my license.
To avoid paying high insurance payments, I always bought cars under my parent's name so my insurance would be cheap.
I had a repo in 2003 but that was when I was young and stupid bought a brand new car and couldn't keep up with the payments.

there are your problems, pick one

 

Repo was way over 10 years ago and I don't think credit inquiry checks your points on license if they no longer exist.

 

This is an interesting requirement. So a young new driver would not be able to lease their first car? I am not challenging what you're saying, I just find it an odd stipulation.

 

I actually think it kind of makes sense. Since technically the car is not yours, you're basically renting the car, they want someone to have experience owning a car, making the payments etc etc... I don't remember now since it was so long ago but I think if you have someone who has bought a car before co-sign with you, then you could do the lease. Which in this case, if a young person wants to lease a car, they can have their parents or uncle or whatever co-sign the lease... and now that I think about it, there is also an age restriction in order to lease. I think you have to be at least 18 or 21, I'm not sure

 

Ex-banker here, not an expert banker, but I've learnt a few things (and certainly not everything) over the years.

Leases often have higher approval requirements than conventional installment loans.

Credit Score is a often a good measure of financial risk, a high score typically indicates low risk, however there's more than just the score...
Type of loan product ...creditors often look at the types of credit you've had in the past, installment loans, lines of credit, mortgages, credit cards, etc. If you've never had an installment or car loan before, the creditor cannot predict your risk level with this type of loan. So you might have a high score, but a thin credit file, which can hurt your chances of being approved.
Debt to Income... does your total monthly debt as a percentage of your total monthly income below the threshold established by the credit provider (typically under 50%, and closer to 39%)
Type of income... are you paid a fixed salary or is your income variable. This can affect your ability to pay a fixed debt regularly and timely.
Employment history... is your employment stable or do you switch jobs often? How long have you been in your current job? Many lenders like to see a stable employment history.

If you've had a repo in the past and never established any other credit (or very limited credit) in the interim, the creditor can only use your past history as a guide to predict your future financial responsibility... so no credit (or little credit) can also be bad credit to some lenders.

... and there's additional criteria that lenders use to measure the type of risk you pose to them. Like most transactions out there, it's a game, and you got to know the rules to play and win.

 

My first thought was that the OP had never taken out -- and never had to pay back -- a loan before. The lending agency would not know what risk you are for defaulting on a loan.

Could the OP get a guarantor / co-signer for the lease (get his mother to co-sign)?

 

Never cosign or ask for someone else to do it for you. My boss said college loans are a truly unfortunate situation, and exception. He told me he was on the hook for 23k/yr. x 4 and just did the same for his son (well that kid got into GS so it was worth it imho). Problem is elite schools are cheaper to attend then mediocre schools, in a way life is such.