First of all, I'd like to hello to everybody! *Hello!* I have browsed these forums for close to 5 months. I decided it was time to join so I could start interacting with everybody

Anyways, I am going to be ready to lease my MINI on August 15th (will be financially ready at that point). 2 days ago I went to MINIUSA.com and built my MCS and then applied for financing. BAD NEWS - I received the following email:

Dear Brent:
Thank you for allowing MINI Financial Services the opportunity to process your credit application for a MINI Cooper. We have reviewed your application, and we are unable to approve your application for credit as submitted. This is not the notice that we are required to give you by federal law. We will send you written notice of this along with other important information by mail.
We encourage you to contact FERMAN MINI OF TAMPA BAY at (727)490-6464 to discuss what opportunities may still be available for you to join the MINI family.
Thank you again for allowing MINI Financial Services the opportunity to provide your automotive financing needs.

I was devestated. I reviewed my credit report and credit score before I applied. Could it be that I only have about 3 years of credit history? My score is above 700 and I make enough income to afford the car payment. I have never made a late payment on anything in the past.

I am very confused and don't know what to do from here! I just wanted to vent and see if anyone has been through this similar situation and what my options may be!

Thanks in advance, everyone, and it's nice to finally be a part of NAM!

 

If you've never had a car payment at all, or at least a car payment as high as this one, that is likely the reason why.

With limited history and no expensive items, denial is common in today's tighter credit market.

Dealer will definitely be able to finance you through a 3rd party bank, but expect a rate in the double digits.

Alternatively, try a credit union.

 

Sorry to hear about that... but don't worry with your credit score you should easily be able to get a loan even with your short credit history.

First off check your city's going car loan interest rate at bankrate.com. Then talk with the Business Manager at your dealership to see what rate they might be able to offer you. You don't have to accept the first rate they come back with. They want your business and will work to find a lower interest rate if you push them. I received a rate 2% lower than the intial offer just by asking for it.

Many folks here have gone with a loan from Penfed.org. I choose to stick with my local credit union as I have been with them for years and they gave me a good rate. If you don't have a local financial institution that you would like to work with Penfed might be worth considering. For more info check out this thread... https://www.northamericanmotoring.com/forums/showthread.php?t=136362&highlight=Penfed.com

Good luck!

 

How does this work with leasing? I have never had a car payment under my name. Can you lease through a credit union or a bank? Thanks for the help!

 

You will better off buying. Leasing is only a good option for self-employed people who can write off their lease payments as a business expense on their taxes.

 

Thanks for your responses and for the info on PenFed Definitely looks appealing. I am one of those cases, however, that wants to get a new car every 3 years as well as be under warranty for as long as I have the car.

 

This is a common misconception. Leasing can often be a great way to buy a car, even for "regular" people. Assuming you would like a new vehicle every 3-4 years, leasing is the most cost effective way to do this in most cases. However, if you are the type of person who owns cars for 5+ years, leasing is probably not a good option.

1. It allows people to drive a vehicle that might normally be outside their affordability range.

2. It allows people with "CAR ADD" to get in and out of cars relatively often.

3. You will always have a car under warranty.

4. Manufacturers often run lease specials when they don't have finance specials. For example, I am leasing my 2006 E55 for the equivalent of 1% interest. MB Financial was running an E55 lease special in mid-2006 because they were launching the E63 in 2007.

Now, if you are trying to lease your mini and Mini Financial denied you: there are other banks who will lease cars, but the rates and residuals tend to be all over the place. It will most likely not be as good of a deal to lease outside of Mini Financial.

 

Most of the in house financing is through a bigger company. like Household credit. They want you to have absolutely zero debt in order to get financed through them. Check with your bank and credit unions to see what the best rate is. Our rates varied from as low as 5.7 to 8% with a beacon score of 786. Just keep looking for the best offer.....

Just cannot justify to myself a lease vs buy. It seems like I am throwing away my money for a lease. Lastly, I don't like the restraints of mileage. I drive a lot over the year and It wouldn't be practical for me to lease.

 

Thanks for the heads up, I was confused about that. So when I goto the MINI payment calculator for a lease, how accurate is that thing? I understand there is tax on top of your monthly payment, but is there a higher "%" based on your credit worthiness? Also, by the looks of things, is it looking like I may need a co-signer? I will be almost completely debt free by August 15th (the day I plan to order).

 

I hear ya trojanman.

I was giving the (lazy) short answer that is true for most people... especially since as you say he would be going outside Mini.

 

Look at this, It's called Payment Saver, it's kinda like a lease but is not really one. Just give them a call and find out, I'm sure you wont be denied with them, I had no previous car payments or big credit history, I think we are on the same situation, I can easily do car payments with my income, but I don't have a big credit history and my score is above 700, call them and ask the about that payment saver, then if you want to enroll, do everything online, they will approve it right away and send you a check in a day or 2.
There number is: 1-800-247-5626, they are doing 4.25% for car loans, if your not Military you will need to pay 25 dlls to open an account and then you can apply for the loan. Here's the payment saver link calculator, also look for the normal car loan calculator:

https://www.penfed.org/productsAndRa...Calculator.asp

 

Hey man! That looks amazing! Better than any deals I have seen! The only thing is that I am looking to lease!

 

Why is it that you want to lease? you want to get a new car every few years or so?

 

Yes, I wanna trade up every three years or so. Also nice to always be under warranty :D

 

Well they have this: "Sell, trade, or refinance** at the end of your loan term" Like I said I'm not familiar with that option but I remember they told me "is like a lease" when I asked him how come that one has lower monthly payments. You should call to find out, doesn't hurt...

 

Yeah, I might just give them a call and talk to them about different options. It just looked like at the end of the saver one, you have to drop 12k at the end. I guess I will have to read further into it and call them!

 

Good luck! let us know how it goes!

 

Thanks! I will! I can't wait for these next 2 months to go by! I am tempted to go order it tomorrow, lol!

 

I know what you mean, I was saving money for a big down payment, then I read that post about penfed and for 4.25 I said what the heck, So now I can't wait to get my MINI S, 1 week more to go, I can't sleep at night sometimes

 

Man! One more week? That's awesome! I'm more than 2 months and I literally had a dream about it the other night!

 

OK, let's put this "leasing is bad" issue to rest, once and for all. First, and this is VERY important: leasing makes the most sense if you tend to be in and out of cars every few years. If you are a long-term car person, then forget about it!

COST TO OWN A $28,000 MINI COOPER S FOR 36 MONTHS

Leasing
Total Drive Off (up front money): $1700 (approx)
Monthly payments: $402.34 x 36 = $14,484
Disposition Fee: $595
Total Cost: $16,779
Residual: $18,200 (amount required to purchase the car at this time)

PURCHASE LOAN @ 4.5%
Total Drive Off: $2520 (sales tax + doc/license fees)
Monthly Payment: $522 x 36 = $18,792 (assumes 5 year loan)
Total Cost: $21,312
Balance Remaining on Loan: $11,482

SO, leasing for 3 years saves you $4,533 out of pocket vs. traditional financing. I will concede, however, that if you intend to lease the vehicle for 3 years then purchase it outright at the end of the contract, it is definitely a worse deal than if you just financed traditionally up front.

There are some other forces at play here, namely the excess equity you build with a traditional finance loan as well as the true market value of the car vs. lease residual. These are more advanced concepts I would be happy to explore if someone wanted the detail. However, it's too much info for this "leasing 101" exercise.

 

It's hard for me to say how accurate Mini's lease calculator is, when compared with 3rd party banks.

Generally speaking, Mini Financial will have a slightly higher money factor (interest rate), but a much higher residual (higher is better). However, for the past few months Mini Financial money factors have been LOWER than the 3rd party market. So, Mini Financial is most definitely the best way to lease a Mini in today's market.

 

Extended warranty?

 

We were denied by Mini Financial at first as well. We don't have the greatest credit, but it's not horrible. Our MA actually called and talked to some manager like person at Mini Financial, told them he had never seen someone so excited to buy a car.

Whatever else he said worked, we were approved! Good luck getting your baby!

 

3one3, I too got the same email as you but when I went into the dealer and filled out a new application I got approved. They said 'something' was wrong and they couldn't fully access my credit report. My last car loan was probably 8 years ago so it wasn't showing up on my credit report that they pulled but when I told them I was going to put a descent down payment down they quickly changed their tune. I have great credit too. Now I am going to look into the Penfed loan as it seems to be the lowest interest rate around but the finance manager said he would work to get me a low rate but I just don't see them beating PenFed.

Good luck and don't stress about that email. About a week later I got a 'you're approved email" that cracked me up.