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Hello, I am planning to lease a Benz GLK 350.

My auto score is 633 and I believe it falls in the 3rd tier. I was just wondering if I would be qualified to the lease. If not, then I would need to ask my friend to help me cosign, the problem is that he just recently leased a Benz and also has 2 other cars under his name that are still not paid off yet. However, his income is quite high, probably around 100 to 200k a month. But I would like to know if that would affect his credit should he ever consider to buy a house.

Please let me know.

Thank you

Jun 18, 2013 by Quinn from El Monte, CA in  |  Flag
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5 votes

The short answer is yes, it will affect his credit score.

The more important answer relates to your long-term financial future. I hate to make presumptions based on a short question but I wonder if this car lease is the right thing for you. We all want new things but sometimes the right thing for us to do is wait. Wait to have a better financial picture, wait to clean up your credit score, and wait for a time when renting a car is not the option on the table.

I realize that may hurt but, that is not my intention. With the right motivation like a Benz GLK350 we can do amazing things. Have a goal to aim at, like being out of debt. It is possible to have really nice things, even on a small budget.

Comment   |  Flag   |  Jun 18, 2013 from Kingsport, TN

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5 votes

Those are nice cars. If you don't qualify for a lease, you can always look at buying via an auto loan. Either way your payment will most likely be more expensive the worse your score is. Your best bet is to go to the place you plan on leasing and talk to them about it. When you go, don't get pressured into making a decision right away, just get the information on leasing vs. buying and if either is a viable option and then make your decision based on whether or not you can afford either.

Also, I would not recommend bringing your friend into this if you can avoid it. I have heard too many horror stories where friendships have gone down the drain over trivial matters such as co-leasing.

Comment   |  Flag   |  Jun 18, 2013 from St. Louis, MO

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Hi Quinn! I can't say if you qualify for a lease as that would be up to the leasing company and their specific criteria. If you are concerned that you cannot qualify for a lease with your own credit score, why are looking to spend more money than you might be able to afford? Why would you ask this particular friend to co-sign if you are unsure of his finances? And why would your friend be interested in co-signing for you? I suggest you re-examine your motives for owning this vehicle and decide if it is a "need" or a "want" or a "desire".

Here's an example: You need a car to get to work. Any car will do. You want a new vehicle to get around town reliably. You desire a super-charged sporty convertible to show your friends.

It seems that you are looking for someone to give you a green-light to make this purchase. I can't give you that, but suggest that if you want to lease this car, be sure to pay off some current debt, keep your payments up to date, and clean up your credit score.

You can get a free credit report once a year at: https://www.annualcreditreport.com/cra/index.jsp. Good luck!

Comment   |  Flag   |  Jun 18, 2013 from River Hills, SC

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Quinn, we are all pretty much saying the same thing. If you don't qualify for a standard lease, it is probably best not to go to great lengths to get one. If you overextend yourself by getting a really nice car, it will hurt your credit score badly.

If you try hard enough, someone out there will provide you with a lease, but the rates will not be favorable. Listen to us; try to settle on a vehicle that might be more practical for your financial situation today.

Comment   |  Flag   |  Jun 24, 2013 from Delray Beach, FL

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Andy Tilp, CFP® Level 16


The others have made some good comments. I too raised an eyebrow when I read you don't qualify. I think there is an important question you need to consider. Are you saving, or have you saved enough for retirement. for those years when you won't be earning money?

If you have, that is great, and you can ignore what I say next.

But if not, then I suggest a reality check is in order. It sounds like you may have an expensive lifestyle, which means you will need to save a tremendous amount of money to continue the life style later in life. If your choice is between maxing out your retirement savings or paying for a nice car, then, to be honest, you can't afford the car. That may sound harsh, but decades from now when the car is in the junk yard, you will be happy you put money aside to be used later in your life.

Comment   |  Flag   |  Jun 28, 2013 from Sherwood, OR

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While I have to agree with the previous comments made here, all I can say is, "been there, done that". My Dad taught me early on, that in most cases, owning was better than renting. Now, I will say, there are certain of my business clients where a lease makes more sense than owning... but, not for me.

I drove a new car for many years... along with that monthly car payment, which, at the time was around $300 per month (okay, we're talking the "Days of the Dinosaurs"... 1980's). One day, leaving the office, I needed to head South... office was on the East side of the street, which would require a left turn. Traffic was heavy, and the traffic light just north of us had changed 3 times with me sitting there. Finally, two cars stopped seeing the red light ahead, waving me through... I proceeded cautiously, first looking right, then left, then right and started to pull out. Out of nowhere a couple of kids in a beater Camaro hit me at a high rate of speed while driving in the center lane. Never saw it coming. Somehow I got the ticket, went to court to contest it... I lost. Thus, I was out $18,000 dollars over a five year period in car payment, and was upside down a thousand dollars on the car, which was totalled. Never again... out $19,000 in five years, and there I walking...

Moral to this story is, car payments/leases are an expense... if you can't afford it, don't buy it. If your credit score is in the 600 range, work on that first. And, consider buying a well kept luxury car instead. My last purchase was a car that was $72,000 new, dealer maintained, and was priced where I could pay cash for it instead of making lease or loan payments. My last 4 cars have been purchased that way, leaving money available for my car hobby... old British sports cars... which, by the way, get more compliments than my newer luxury cars... and don't depreciate...

Comment   |  Flag   |  Jul 01, 2013 from Springfield, MO

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