Jump to content

Auto Financing


Recommended Posts

If this is not the correct forum, if mods would help get it where it belongs I would be appreciative.

 

c7e9f6134f4a2eb4b98549ff49b0f78d.jpg

These are my auto 8 scores. According to Experian, my Auto 8 is now 693 (as of today’s update).

 

I was 580 a month ago. I got a lot of inaccurate and outdated info deleted. I got a secured discover card with $2k balance, a Capital One secured $1k limit, and a Credit One Amex with $300 limit (yeah, I know, but it’s Amex)

 

I gained about 100 points across the board in a little over a month.

 

I have 3% utilization in credit. 3 years perfect hx with car payment.

 

I’m a 1099 employee and want to lease for tax benefits. I like the Mercedes AMG C63 that is roughly $1,000/mo lease.

 

What do I need to do? Will Mercedes accept this with $200k annuAl income? Or do I need to wait for 720 Auto 8 FICO?

 

Other advice or suggestions is appreciated.

 

 

Sent from my iPhone using Tapatalk

Link to post
Share on other sites

7 hours ago, DocB said:

If this is not the correct forum, if mods would help get it where it belongs I would be appreciative.

 

c7e9f6134f4a2eb4b98549ff49b0f78d.jpg

These are my auto 8 scores. According to Experian, my Auto 8 is now 693 (as of today’s update).

 

I was 580 a month ago. I got a lot of inaccurate and outdated info deleted. I got a secured discover card with $2k balance, a Capital One secured $1k limit, and a Credit One Amex with $300 limit (yeah, I know, but it’s Amex)

 

I gained about 100 points across the board in a little over a month.

 

I have 3% utilization in credit. 3 years perfect hx with car payment.

 

I’m a 1099 employee and want to lease for tax benefits. I like the Mercedes AMG C63 that is roughly $1,000/mo lease.

 

What do I need to do? Will Mercedes accept this with $200k annuAl income? Or do I need to wait for 720 Auto 8 FICO?

 

Other advice or suggestions is appreciated.

 

 

Sent from my iPhone using Tapatalk

 

In general leases have stricter qualification requirements than purchases, and like most credit decisions your score in only one factor.

 

Do you have a prior auto lease in this general payment range reporting?  Is your current car loan with MBFS?  Is your DTI on solid ground?

 

You may have a shot if everything else is in order and they pull Experian.  I think there's little/no chance if they pull Equifax.

 

 

Edited by cv91915
Link to post
Share on other sites

I am not sure where MB's tier structure falls for leases, but you more than likely won't be top tier, which will be very costly in terms of your lease.  I would guess they may be able to get you over the hump with a bit of nudging if they pull one of your lower scores.  You will almost certainly be required to provide proof of income, and if you can prove the $200k has been steady for a couple of years I would venture to say you'd get approved.  I think you are underestimating your payment however as the "offers" that they show are on base models with a significant down payment or dealer contribution and at top tier credit.  Once you add options, and a likely adder to the rate you are probably going to be well above that.

 

If you aren't really familiar with leasing I suggest you do some reading over at leasehackr to educate yourself.

Link to post
Share on other sites
Oof mods are asleep and Hege is away. What is the purchase price of your beloved AMG and where did you get a $1k/mo lease price from? Is it 3y/36k? With two secured cards and a credit done... I question. 

6ab9f0fad8ab8206ec9fdf3ce3a2776f.jpg

c4f4fb90078e2167d67c983a8328f89f.jpg


Sent from my iPhone using Tapatalk
Link to post
Share on other sites
I am not sure where MB's tier structure falls for leases, but you more than likely won't be top tier, which will be very costly in terms of your lease.  I would guess they may be able to get you over the hump with a bit of nudging if they pull one of your lower scores.  You will almost certainly be required to provide proof of income, and if you can prove the $200k has been steady for a couple of years I would venture to say you'd get approved.  I think you are underestimating your payment however as the "offers" that they show are on base models with a significant down payment or dealer contribution and at top tier credit.  Once you add options, and a likely adder to the rate you are probably going to be well above that.
 
If you aren't really familiar with leasing I suggest you do some reading over at leasehackr to educate yourself.

I believe I have read somewhere on Mercedes website or perhaps somewhere else the top-tier is 720+. What I am unsure of is whether it would be negotiable to have them use my experience score, or whether they would blend the mid score from all three.

My Experian is now 693 Auto 8. So I think I may be able to get it to 720 in a couple months.

Proof of income is not an issue.


Sent from my iPhone using Tapatalk
Link to post
Share on other sites
Can you prove your income via tax return schedule C Line 31?
Can you tell me what tax benefits a lease would grant you that a RISA would not?

My income by tax return has been $190 to $220k for past 10 years. Part of that has been as W2 and part as 1099. I work in emergency medicine, so W2 vs 1099 is dependent upon the pay structure of the physician group I am working with. But I’ve been, but I have worked in the same position for 13+ years.

There are a couple of reasons I am looking at lease vs RISA. Per my tax advisor, lease is cleaner. I may deduct whatever percentage of my lease payment is related to business use. And that is high. Probably 80% business use.

Secondly, luxury cars lose a lot of their value (nearly half) in the first 3 years of ownership. I understand I can deduct depreciation, but I don’t want to be left with a vehicle in 3 years that I owe more than what the vehicle is worth.

For the sake of simplicity, I would rather simply hand the keys back and get a new vehicle every three years.

I have previously leased an Infinity with the same payment amount (2012 to 2015).


Sent from my iPhone using Tapatalk
Link to post
Share on other sites
 
In general leases have stricter qualification requirements than purchases, and like most credit decisions your score in only one factor.
 
Do you have a prior auto lease in this general payment range reporting?  Is your current car loan with MBFS?  Is your DTI on solid ground?
 
You may have a shot if everything else is in order and they pull Experian.  I think there's little/no chance if they pull Equifax.
 
 

I don’t have prior lease through MBFS. I do have one at same payment through Infiniti.

My DTI is solid. I have 3 credit cards and carry $20 balance on each of them to show payment history. I have a $50/mo payment on a $500 installment loan so I have more installment loan history. I lease a home for $2700 per month. My other car has a $650/mo payment.

That is totality of my debt.

My story is this... had great credit until I got divorced on 2013. And I took a beating financially. I just didn’t apply for any credit other than my car after that shellacking. I paid cash for what I needed.

My score has jumped about 100 points over last month as I have been contesting reporting that is dated. I’m still waiting for a few more to fall off.

I established new credit as described. But my car payment is 3 years aged and I have 54 months now without missing a payment.


Sent from my iPhone using Tapatalk
Link to post
Share on other sites
 
 
This offer is $9,984 + ($1,067*36) = $48,396 + tax to drive "$78,000" car for 36 months.  I'm hoping your aiming to come out quite a bit better than that.   

I do hope to negotiate a better deal or find a deal at lease hacks. However, the deal you described is not very accurate....

You quoted $48,396 + tax to drive the vehicle for 3 years.

I’m a 1099 with an LLC. The lease payments are 100% deductible as a business expense for the portion of the vehicle that is used for business purposes. And that would be an estimated 80% of the time.

So I would actually be paying roughly $9,679 to drive the $78,000 vehicle for 3 years...or $268 per month. And that is absolutely worth it to me.


Sent from my iPhone using Tapatalk
Link to post
Share on other sites
1 hour ago, DocB said:


I do hope to negotiate a better deal or find a deal at lease hacks. However, the deal you described is not very accurate....

You quoted $48,396 + tax to drive the vehicle for 3 years.

I’m a 1099 with an LLC. The lease payments are 100% deductible as a business expense for the portion of the vehicle that is used for business purposes. And that would be an estimated 80% of the time.

So I would actually be paying roughly $9,679 to drive the $78,000 vehicle for 3 years...or $268 per month. And that is absolutely worth it to me.


Sent from my iPhone using Tapatalk

Tax deductions dont work like that. The money is still coming out of your income. The only money you'd be saving is taxes on the deductible portion. In the 32% bracket with 15% SE tax you'd get roughly 20k in tax savings. So it'd still cost you about 30k to lease the vehicle for 3 years.

Link to post
Share on other sites
5 hours ago, DocB said:


I do hope to negotiate a better deal or find a deal at lease hacks. However, the deal you described is not very accurate....

You quoted $48,396 + tax to drive the vehicle for 3 years.

I’m a 1099 with an LLC. The lease payments are 100% deductible as a business expense for the portion of the vehicle that is used for business purposes. And that would be an estimated 80% of the time.

So I would actually be paying roughly $9,679 to drive the $78,000 vehicle for 3 years...or $268 per month. And that is absolutely worth it to me.


Sent from my iPhone using Tapatalk

By this logic, why not get a Bugatti Veyron?

Link to post
Share on other sites
20 hours ago, cv91915 said:

 

 

This offer is $9,984 + ($1,067*36) = $48,396 + tax to drive "$78,000" car for 36 months.  I'm hoping your aiming to come out quite a bit better than that.  :) 

Also, that $1,067 assumes tier 1 credit, which you may not qualify for.  I would expect a bump in payment of $50-$100 a month based on higher interest rate (I am guessing a bump in the MF from between .0005-.001 depending on where you fall).

 

That said, all we can do is speculate. I would suggest you either visit a dealer or a lease broker so you'll know exactly where you stand, rather than play the guessing game.

Link to post
Share on other sites
Even worse didn't realize social security tax stops at 137k in income so only save 35% percent of the 40k so the vehicle would still cost you roughly 35k over 3 years.

Appreciate the feedback. I don’t know what your professional background is. But I would say that my tax advisor is both a CPA and tax attorney. He is aggressive but not reckless.

That being said, I have until recently earned between $200 and $240k per year and paid at or less than 20% per year in total taxes.

As a self employed individual, he has advised me of what expenses I can list as operating expenses, reducing my taxable income. And among those things are a leased vehicle.

Along with alimony paid, I have been able to reduce my taxable income to $140k. And my projected savings for leasing a vehicle are based upon discussions I’ve had with him and his advise.

I trust he is correct. That’s why I pay him. But I’m not a CPA or a tax attorney. I’m just a dumb ER doc.


Sent from my iPhone using Tapatalk
Link to post
Share on other sites
4 hours ago, DocB said:


Appreciate the feedback. I don’t know what your professional background is. But I would say that my tax advisor is both a CPA and tax attorney. He is aggressive but not reckless.

That being said, I have until recently earned between $200 and $240k per year and paid at or less than 20% per year in total taxes.

As a self employed individual, he has advised me of what expenses I can list as operating expenses, reducing my taxable income. And among those things are a leased vehicle.

Along with alimony paid, I have been able to reduce my taxable income to $140k. And my projected savings for leasing a vehicle are based upon discussions I’ve had with him and his advise.

I trust he is correct. That’s why I pay him. But I’m not a CPA or a tax attorney. I’m just a dumb ER doc. emoji2371.png


Sent from my iPhone using Tapatalk

If I were you I'd run by all these pertinent comments with your tax man and see what he says. Two years ago my brother got a notice from his tax man months after filing that he owed over $20K. His tax man did the returns and he's been going to him forever.

Link to post
Share on other sites
5 hours ago, DocB said:

reducing my taxable income

No one has offered an opinion that differs from your CPA. 

 

There is a difference between a tax deduction and a tax credit

 

A tax credit (which this isn't) would be a dollar-for-dollar reduction in your tax obligation, so every dollar you spend would get you a dollar back later.  The benefit of a deduction is limited by your effective tax rate, so you get back a corresponding fraction of your cash outlay.  

 

Further, no one is saying you can't afford the car.  My main point in commenting on the price is that the offer is horrible for that vehicle.  I wouldn't spend OPM on that offer.

 

 

Edited by cv91915
Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.




  • Member Statistics

    • Total Members
      180,857
    • Most Online
      2,046

    Newest Member
    Jamesbrownbey
    Joined
×
×
  • Create New...

Important Information

Guidelines