Fair Isaac and Co. is introducing FICO 08, an improved scoring model designed to help lenders make a more accurate assessment of risk when accessing applicants. In light of increasing levels of delinquencies, as well as declining recovery values (the amount a lender is able to recover after a reposed vehicle is sold at auction), lenders have been looking for a better model to predict the likelihood of a loan default. According to Mortgage News Daily (1/7/08), Fair Isaac predicts that FICO 08 will help lenders reduce default rates on consumer loans between 5 and 15%.

The fundamental elements that FICO evaluates in computing a credit score will remain largely look and feel the same. Lenders and creditors will continue to look at:

o Payment history: Has the consumer consistently paid their accounts on time in accordance with the terms of their loan or credit arrangement?

o Amounts owed: How many accounts have balances, the amount owed on each and what proportion of available credit is being used.

o Length of credit history: Number of recently opened accounts and inquiries, the time since recent account openings and is there a re-establishment of positive credit history?

o New credit: How many recently opened credit accounts and credit inquiries are on file?

o Credit mix: How many and what types of accounts are open?

The difference with FICO 08 will be the weight each of these factors will carry. FICO 08 will more finely “slice and dice” information. According to Credit Technologies Inc. “Each scoring model is divided into scorecards, (also referred to as Population Segments.) The current FICO model uses 10 score cards. FICO 08 adds 2 more, now dividing the population into 12 segments (eight for people with good credit and four for people with bad credit.) This could result in a slight change of a consumer’s credit score either up or down “

FICO O8 will also better identify young or thin credit files, who may now have high scores even though they have relatively few accounts, many recently opened. Consumers actively seeking new credit will be more easily identified, allowing creditors to more accurately gauge the potential risk in granting too many new accounts at once.

Another difference will be in how FICO 08 looks at credit files. A greater consideration will be given to the mix of credit a consumer has, such as a credit card or revolving account, as well as an installment loan or mortgage. This, according to Fair Isaac, shows that the consumer can manage multiple payments on different kinds of accounts. FICO 08 will place greater importance on borrowers who use a high percentage of their available credit. Accounts at or near their limits will generate a lower score for consumers.

FICO 08 will be harder on “repeat offenders”, those consumers who are consistently delinquent on their accounts, and more forgiving to those with only an occasional slip up. While delinquent accounts have always had a negative impact on a FICO Score, consumers who have a number of accounts currently past due will generate a even lower score than they currently have. A consumer with only one derogatory or delinquent account won’t be dinged as hard, and in fact, a consumer in arrears in one account who also has a number of accounts in good standing may generate a higher score under the new system. However, FICO 08 will draw a greater distinction for serious delinquencies over 90 days late. Multiple delinquent accounts could significantly lower a consumer’s score. According to the Better Business Bureau (BBB), the new scoring method is more forgiving of minor slip-ups.

A very significant change coming is that FICO 08 will no longer consider “authorized users” in computing a credit score. This is in response to curtail the use of “piggybacking” or “credit sharing”, where a creditor with a low score is added to an account of a non-related consumer in an effort to boost the first consumer’s score. If a consumer’s only credit history includes authorized use accounts they could see their credit score disappear!

Consumers who are considered a “lower” risk under FICO 08 may start to get better terms from creditors. A consumer deemed to be a “higher” risk under the new scoring system may find less than favorable terms, or may find it tougher to even get credit. Consumers who occasionally mess up, have a good mix of credit types, with a single delinquent account may actually see their credit scores rise. Consumers who consistently mess up, have balances at or near their credit limits, are 90 days late on multiple accounts or have authorized user accounts in their file, may see their credit scores drop. Additionally, FICO 08 will not “ding” a credit score for multiple related credit inquiries. A consumer shopping for a mortgage or an auto loan who applies to multiple lenders will not see their score drop because of the inquiries.

So, when will FICO 08 come into play? Experian is expected to begin using the FICO 08 in the first quarter of 2008, while TransUnion believes they will be ready by the second quarter of 2008. At this time, Equifax has declined to offer FICO 08 due to litigation regarding “VantageScore”, which is a joint venture, started by all three bureaus in 2006, to compete with Fair Isaac’s FICO scoring system. The lawsuit, filed by Fair Isaac, is based on unfair and anti-competitive practices which are meant to harm the FICO brand. The legal action has caused Equifax’s relationship with Fair Isaac to remain “strained” until the lawsuit is resolved, says David Rubinger, Equifax spokesman, as quoted in the December 19th, 2007 edition of the Wall Street Journal,

When FICO 08 is implemented, many consumers will not see a significant difference in their scores. According to Tom Quinn, Vice President of Global Scoring Solutions for Fair Isaac, as quoted in the December 19th, 2007 edition of the Wall Street Journal, “Overall, more consumers will see their FICO scores go up slightly than will see their scores drop.”

Exactly what the future holds is unclear whether FICO 08 will affect the buying patterns of your lenders remains to be seen. One thing for certain is the publicity surrounding FICO 08 may raise the anxiety level of your customer. Being able to effective communicate what they can expect will go a long way in easing their anxiety. If change is indeed inevitable, it’s best to be ready for it!

Most Frequently Asked Questions

Introduction: In today’s world of motor vehicles, with the average cost of a new vehicle continually raising, it is now more important then ever to fully understand the options of vehicle leasing.

In my opinion, the List Price/Window Sticker or MSRP of today’s vehicle is priced so that leasing will reflect the best way to acquire the vehicle. In my 30 plus years of vehicle leasing, here are some of the most Frequently Asked Questions I have received from my prospective clients.

1. Should I lease or buy?

When you lease a vehicle you will be able to have a lower monthly payment and will have a much lower cash outlay.

You will be able to afford to lease a car that you probably would not be able to afford to buy?
You will have lower maintenance costs since most new cars come with a 3 year warranty which will cover most major repairs?

You will be able to drive a new car every 3 years.
There will be no trade-in or resale hassle at the end of the lease.
Your sales tax will be less on a new car lease since it is only calculated on the monthly payment, where on the purchase of a new car you must pay 100% of the tax on all of the vehicle the day you buy it even though you will never use 100% of the car.

When you lease a vehicle you will, conserve your working capital, avail yourself of an additional source of financing, make a minimal investment verse buying a car that will depreciate faster then you can pay for it. Remember one of the basic rules of economics is that if it
appreciates in value, own it. But if it depreciates in value, lease it.

The motor vehicle manufacturers of the world have realized that in order to keep new vehicle pricing high they must keep the used car prices high.
They can not keep used car prices high if they cannot control the used car market. So therefore by over inflating the price of the new car and then under depreciating it which then makes the buy-out prohibitive, they are forcing the car back to them. Which allows them to set the used car value? Which in turn enables them to keep the new car prices high.

Just think of it, if the cars were priced based on real market value and then depreciated on real future value, (since technology has enabled most cars to be made better today then they ever… were as in the past 50,000 miles is not longer the point of obsolesce), then most people would buy the car at the end of the lease and keep it for another 2 to 3 years and it would kill the 3 year business cycle? It is a stated fact today that the average car has more on board computer technology built in it then the first Apollo space capsule had?

2. What are the advantages of leasing?

More car, less money down, less tax to pay. Economics still dictates that if it appreciates own it, but if it depreciates lease it. You own your house and you lease your car.

3. Mileage?

Mileage is a key consideration. If you do 12 to 15,000 miles a year you should fit easily into most leasing programs. But be sure that you properly estimate you mileage and be sure the lease is written to accommodate your needs.

4. If I don’t use my mileage allotment can I get a refund?

You will be responsible for any excess miles at the end of the lease, but in most leases you will not get any refund or credit if you do less.

5. Term of lease?

Most leases run 36, 39, or 48 months, but there are special leases where it may be to your advantage to go shorter or possibly longer?

6. What is the capitalized cost?

This is the cost of the lease. It is the sum of the acquisition cost of the vehicle plus any added on items such as taxes, bank fees or any special equipment.

7. What is the residual value and where does it come form?

It is supposed to be the projected future value of the vehicle. Future values are projected by looking at used car sales market reports and seeing what a similar used vehicle is selling for today.

8. Money Factor?

This is the factor which is applied to the sum of the capitalized cost and the residual value to give you the monthly lease charge.

9. How is the lease calculated?

The capitalized cost less the residual value divided by the lease term gives you the monthly depreciation. The monthly depreciation added to the monthly lease charge gives you the monthly payment.

10. How are taxes calculated?

Each state calculates taxes differently. In NY it is the monthly payment times the lease term times the tax rate.

11. What is the Bank Fee and or Acquisition Fee?

This is an amount the lending institution charges to administer the lease paper. Or it could be a cash capitalized cost reduction disguised as
a bank fee or acquisition fee.

12. Security Deposit?

This is a refundable fee that the lending institution charges to secure or minimize their risk on the lease.

13. Can I put down additional cash to reduce my monthly payment?

Yes, any cash you put down is deducted form the capitalized cost and reduces the amount to be financed and lowers the monthly payment. This cash down is taxable.

14. Who insures the vehicle?

You, the lessee insure the vehicle. Insurance can be arranged by the leasing company and added to the lease.

15. Maintenance?

You, the lessee, are responsible for all maintenance that is not under warranty and or included in the manufacture’s maintenance plan. Full or partial maintenance programs car be added to the lease by the leasing company.

16. License, Title and vehicle inspection?

All registration fees are billed to the lessee as a one time charge.

17. Manufacturers’ rebates and incentives?

All rebates and incentives are applied to the capitalized cost for lease calculations.

18. Can I buy the vehicle at the end of the lease?

Some leases give you the option to buy the vehicle at the end of the lease, but in most cases since the value of the vehicle up-front has been inflated and it has been under depreciated, the option to buy is too high. In most cases it is less expensive to lease a new car then to buy the old one. Again this is all in the marketing scheme of the major motor companies today so it forces the used car back to them and they can control used car values.

19. When I lease is the manufacturer’s warranty still in effect?

The manufacturer’s warranty is the same whether no matter who buys or leases the car. It stays with the vehicle.

20. Can I lease a used vehicle?

Yes, in some instances it is advantages to lease a used vehicle. However it is most likely to be on a late model more expensive car that has low mileage and has been properly residualized form the original lease.

21. If I lease a used car does it come with a warranty?

Only if it is still under the mileage and time of original warranty. But you can buy an extended warranty form a warranty company to cover major parts of the engine and transmission. This is always a good investment and highly recommended.

22. What is my responsibility at the end of the lease?

You the lessee are responsible for excess miles, body damage, glass damage, neglect or abuse, excess wear and tear and any unusual tire wear.

23. What is the difference between a closed-end lease and an open-end lease/finance lease?

The major difference is who is responsible for the resale of the vehicle. With the closed-end lease you, the lessee are responsible as mentioned above for the leased vehicle. With the open-end lease you are responsible for the residual value. You can pay off the value and the vehicle is yours or you turn it in and are responsible that it sells for the residual value. If it sell for more, then you are credited back the proceeds, but if it sells for less then you are responsible for the deficiency. Open-end leases are best on trucks that have a longer life or high line cars that may appreciate in value or in the case where you may need an unusual amount of mileage and it does not pay for you to buy the excess mileage option.

24. How come the ad in the newspaper or on TV is always so much lower then what I can get?

Creative advertising is usually the case. To put an ad in the paper, on TV or radio is very costly and if a car dealer does so he better be able to get your attention. Most car dealers only know how to sell if they get you to come into their showroom. So they must entice you with something eye popping ad. What they do is back out every conceivable cost out of the amount they must capitalize in the lease and then offer mileage, terms and a vehicle which would not really work out for anyone in any situation. When the real sale is made it is a totally different story with many hidden costs. The unaware consumer only sees or hears the monthly payment, gets all excited and runs into the dealer ship where it becomes a different story.

25. Credit Score?

It is very important that the consumer know his credit score before he every starts to go shopping for any vehicle or for any major purchase for that matter. Most car dealers advertise their specials based on you qualifying for the super preferred rate and if you don’t then of course it is a whole different story. A different story that usually plays out at the last minute when you are left with know other option but to take their deal or be ready to walk to work tomorrow morning.

26. Can I end the lease early?

No, the leases written today based on over inflated vehicles which are again under depreciated make it impossible to get out of a lease without incurring substantial costs.

27. What is excess wear and tear?

This is usually defined by any thing on the vehicle which will need to be repaired to allow the vehicle to be sold for what it’s speculated value is. If you are concerned with a car dealer or leasing company when negotiating a lease you should get their written definition of excess wear and tear.

28. Should I make any necessary repairs before I turn in the vehicle?

Yes, when you know you have damage or excess wear it always pays for you to get the repairs done in advance yourself rather then leave it up to the car dealer or lending institution.

29. Does it make a difference who I lease form or should I just look for the lowest monthly cost?

As you can see from reading all of the above that it makes a ton of difference who you lease form. Check references and do your homework and do not fall for the lowest price at first sight.

30. Car dealer or Professional Leasing Company?

When you have a choice usually do your due diligence first with a professional leasing company. It is important to remember that the professional leasing company has no interest in the make and model car you lease but only in you the lessee. The professional leasing company wants you to have a great leasing experience, get the vehicle you want, at the cost you want to budget cause he builds his business on building a relationship with you. At most, not all, car dealers it is unfortunate but the only way they know how to sell is by playing a game. They must get you in the showroom. The guy who sells you the car shakes your hand and could care less about you or if he ever sees you again. It is likely that he is not building his business around you and if you go into the dealership a few months later that guy probably does not work there anymore? So in my opinion you should lease form the professional leasing company whenever possible.

Perhaps you want to compute your auto lease payment every month? Then you might want to consider using an auto leasing calculator.

Definitely, if you are in the market now for a vehicle, you need to have a good idea of what the central numbers and figures are involved in your auto deal such the leasing payment every month, the cost and expenses of the contract and the possible maximum saving that you can obtain as compared to the car purchase.

An auto leasing calculator effectively provides you with a relief from all the stresses of having to compute these figures, afraid that you cannot handle the complexities of such computations. What you have to do is simply enter all the important number and data into your lease calculator and voila! You now have all your details about monthly payments as well as other specific leasing costs and expenses.

The numerical figures and values that you have to obtain from your auto dealer about a particular lease that you might be interested in include estimated residual value, capitalized cost, the duration of term of your contract as well as the money factor. It is advisable that you create assumptions and change the figures to determine the effect such changes has in the lease payments.

For example, we know that the residual value is an estimate of what the car might be worth once the contract ends. Try to input into your calculators different figures and estimates to obtain various scenarios and know the ones that are beneficial to you.

The difference between Computer Financing and Leasing Computer, is in a nutshell, with one you own the computer and the other one you don’t.

Computer Financing

This option is the one where you own the computer. Companies can help customize a financing plan where you can pay an affordable amount. At a predetermined point the computer is shipped directly from the factory to you. You own the computer upon receipt, not the company, AND in some cases no one has owned or touched the computer prior to you.

Leasing Computers

Computer leasing is where you are shipped the computer after applying for credit. You must have good credit and be able to prove that you have the ability to make monthly payments until the computer is paid in full. During the time that you are making the payments, you DO NOT own the computer. The leasing company owns the computer.

Computer Credit Benefits

The benefits of computer financing is that not only do you own the computer, but that the computer you receive is one of the best computers on the market at the time the computer is shipped. Meaning, if the company goes to order the computer and the quoted hard drive is obsolete then you get the newer (most likely bigger) hard drive with no extra fees or hidden costs.

Companies usually offer several different flexible payment plans, but should there be a disruption in your income, you can usually contact the company and they can make arrangements to help you through the rough times. Most companies are there to make this a win-win situation for everyone. After all, if you’re not happy you won’t recommend them.

Credit repair

This is a big thing to a lot of people. Some computer credit companies have created a credit repair program that works hand-in-hand with their financing plans. They all work slightly differently. A couple scenarios are:

(1) the company will report you payments (on time or not) to the credit bureaus or

(2) upon successful completion of the agreement, you will receive a letter that states that you met the payment agreement for X amount of months which you send to all the credit bureaus.

In either case, as long as you make your payments on time your score should improve.

Be Aware

Computer Financing Companies strive to make it affordable for you so that you have more than one option. Remember to ask questions like “Is this a used computer?” “Does it come with software?” “What happens if I can’t make a payment?”

One size does not fit all. If the company does not offer several computer financing options are they really flexible enough to help you? Choose a company that may work “outside the box” and will create a financing plan that fits you.

News reports this summer have revealed that automotive leasing of new cars, trucks, vans, and SUVs is really taking a beating. Chrysler has left the leasing business completely, while Ford, GM, and Toyota have scaled back on leases. Blame higher than normal depreciation on larger vehicles for this trend, one that threatens to remove an important financing option for consumers.

But leasing could still be the best decision you ever made.

Despite the vagaries of the automotive financing market, leases are still being pushed. If you really want to lease a Chrysler, Jeep, or Dodge vehicle you can, but you’ll have to make that leasing arrangement with your own leasing company.

Why would anyone want to lease a car these days? For the following reasons:

You’re not stuck with a car you no longer want – These days, most new vehicles are financed for 60, even 72 months, leaving drivers with a fairly old car once it has been paid off. That shiny new 2009 model won’t look so nice in 2015; will you hold onto it to 2020 and beyond?

You avoid a major depreciation headache – People who bought a new truck or SUV a year or two ago are finding that they are worth a lot less today. Normal depreciation can whack one-third of the vehicle’s value within one year’s time, but some larger vehicles are worth less than half of what buyers paid for them just a year ago. With a lease, the auto manufacturer absorbs unexpected depreciation, not you.

Major maintenance and repairs aren’t your problem – Own a vehicle for longer than three years or 50,000 miles and you’ll start to dish out big bucks for maintenance and repairs. Tires, brakes, water pumps, and other components can go, adding to your cost of ownership. Switch vehicles every three years and you’ll be doing minor maintenance only.

You can trade up to new technology – Reiterating the first point, you don’t want to be stuck with a car you no longer want. Even more compelling of an argument for leasing is that much of the new technology being planned today will be standard in a few years time. Fuel thrifty engines able to produce more horsepower while consuming less gas will be dominating the market as will various hybrid models, select diesel engines, and tiny three and four cylinder engines.

Of course, if you do choose to lease you’ll make payments on a car that you’ll never own. Also, if you drive more than 12,000 or in some cases 15,000 miles per year, then leasing won’t be a viable option for you – in that case you’ll pay a hefty per mile charge for every mile above the lease agreement. The risk here is that you could be saddled with a hefty bill at the end of the lease term.

Ultimately, leasing is a personal decision one that should be weighed against other options. Paying cash for a new vehicle is the best way to go, allowing you to negotiate the lowest possible price while snagging a big rebate. In reality, few of us can afford an all cash transaction, but that option is also available.

Contract hire is one of the options offered by leasing companies that has steadily grown in popularity. It’s a great option for any company looking to lease a vehicle because it has many benefits that can help to make your leasing experience a great one that you won’t find with many of the other options. The contract hire option is designed for companies while individuals can take advantage of the personal contract hire option.

When you choose this option your contract will be tailored to meet the requirements of your business and the length of the contract will vary according to your needs. To help you get a better idea of what you can expect from leasing with the contract hire option, the benefits and disadvantages are listed below.

Benefits:

These days, the used car leasing scheme is definitely an attractive deal in so many ways. It certainly helps in getting you and your family into your dream high end vehicle or SUV for much lower payments every month than if you are to buy a brand new one. You must however be ready to do some real homework and thorough research in order to get a nice vehicle lease deal.

Like in the case of with new car leasing deal, when it comes to used car leasing schemes, your research on the price must actually focus on the important figures. These are the values of the car, which are mainly the beginning market value and as well as the estimated residual value. This can be difficult for anyone to make a correct prediction simply because there is no set price on used cars. Likewise, the residual percent figure is solely pegged to current retail value. It is advisable to utilize various sources in order to approximate the value of a second hand car. It can be the dealerships you know or online sources such as car evaluating tools like Cars.com, which is one of the most popular in the internet.

Another means of pinning down a nice estimate is by making comparison between the leases of the given vehicle to the lease of a brand new one of the same model. This will provide a clear difference between the lease of a new car and that of a used auto. Like a new car lease scheme, used auto leasing is much more attractive especially when the residual values have the least depreciation. You are offered the better chance of getting a good bargain in the luxury cars that possess better values as used cars.

Most used car leasing deals do not come automatically with gap coverage. Such is a special coverage that is offered normally on new car lease to cover the client in case the leased auto is stolen, lost or damaged. Car insurance policies only cover the worth of the vehicle during the time of loss, and not what is still owed on the contract. The difference can actually run into hundreds of dollars, or even thousands. Therefore, it is a must that you do not get into used car leasing deals with no gap coverage. It can be arranged separately with the lease dealer or vehicle insurance company.

If you need equipment fast but do not have the resources to buy out right than leasing is what you want. Leasing equipment could be a better alternative choice to purchasing, dependent on your current position and wants. Today, leasing is general practice in business. Eight out of ten U.S. Firms lease part of their gear. Leasing is acceptable for almost any business at any stage of development. Comparing leasing to purchasing when you purchase a chunk of hardware or vehicle, you typically need to pay for it in full either by utilizing money or by financing the balance. After you finish stumping up for it, you own it. Hardware leasing, from a different perspective, is basically a loan. The bank buys and owns the gear and then ‘rents’ it to a business at a flat monthly rate for a set duration. With a lease, you pay just for using the kit. But at the end of the lease period, you might finish up owning nothing.

When you lease equipment you leave money in the bank that may be used for other purchases. Since lease payments are customarily smaller compared to regular loan payments, you do not have to pay out as much every month. However, take into account that a lease isn’t cancelable like a loan or other debt. If you want to get out a standard loan you can sell whatever you financed and clear the loan, or perhaps refinance it. So you’ve got to be sure you make the payments when you enter into a lease. So what forms of gear make the most sense for a small company to lease? The most typical items leased are office hardware, PCs, trucks and autos. Commercial equipment leasing offers a large range of benefits, from consistency with costs to increased money flow. Leasing permits you to simply and cost-effectively add equipment or upgrade to a total new piece of machinery to meet future wants. This permits you to transfer the danger of being caught with out of date hardware to the leasing company.

Leasing is largely an alternative choice to conventional financing and can be great for companies not ready to get company loans. 100-percent financing in numerous cases, leasing needs no deposit.

Ease and convenience – signing up for a lease is straightforward, and lease agreements can be structured to meet your individual necessities. Kit leases can go from two thousand to $ 4,000,000. Leases for at least $100,000 typically need detailed financial info from the business, and the leasing company conducts a rather more intensive credit research than it might for a small business. Lease terms range all the way from twelve to sixty months, dependent on each particular situation.

Most leases can be structured so that payments are made while operating instead of up front capital funds. This could eliminate or reduce capital budget delays. You can always buy the equipment later if you have enough money on hand. Leasing preserves your working capitalization by requiring only a minimum up-front outlay of money. Operating leases are often treated as a 100-percent, tax-refundable business cost paid from before tax revenues rather than after-tax profits. Cover against inflation – Lease payments are based primarily on the dollar’s current price.

Generally, the company selling the equipment will work out the payments directly with the leasing company. Be certain to get quotes from a considerable number of leasing firms. It is also a smart idea to request referrals from pals and business colleagues. In addition, ensure you understand with whom you are dealing. Are you speaking to an equipment broker person who simply structures deals? If so get them backed thru any of the major leasing corporations. Or are you woring with leasing company that’s essentially putting its own funds on the line? Brokers can be of benefit because they have useful knowledge about the leasing market and will help you find the best leasing solution for your wishes. But as when coping with any sort of salesman, you are accountable for handling the required groundwork. Do your own homework to make sure you barter the most favorable lease agreement for your company.

If you want to get approved at the best possible terms when buying a car, it’s important you know a car lender’s credit guidelines before you apply for credit…especially if you’re bankrupt.

It will save you time and frustration–but more importantly, it will help you avoid credit inquiries that may lower your FICO credit scores up to 12 points per inquiry.

Step 1 in making a lease or buy decision is to determine a lender’s credit guidelines.

You start by asking if they lend to people with a bankruptcy. If so, on what terms?

That’s right. You have to be upfront that you’ve filed bankruptcy. Don’t hide it. We have to face the fact that some dealers just won’t work with people who’ve filed bankruptcy. So our job is to find the ones that do.

Some lenders will only lease to people with a bankruptcy. Others will only offer purchase financing. Yet still others will only lend using a hybrid of the two–this is especially common in Texas.

Ask the finance director at the dealership to direct you as to what structure the manufacturer prefers.

And here’s a quick tip for you: if your bankruptcy doesn’t appear on the credit report your lender pulls–then, in the eyes of the lender, you’re not bankrupt.

The only lenders I would consider using are:

- First choice: Captive lenders (car manufacturers)

- Second choice: Banks (not finance companies)

- Third choice: Credit unions

Ninety-nine percent of the cars I’ve leased over the years have been with captive lenders. Just one was leased by a bank.

That particular deal came from a conversation I had with Amy, the finance manager at the local Land Rover dealership here in Indianapolis. I told her I was open to her financing recommendations, but I preferred financing through the car manufacturer.

I told her my current FICO scores. She immediately said that with my scores she could do better through a local bank. I signed a credit application and told her to go for it.

The next day I signed a lease agreement with that local bank. Being open to her advice literally saved me hundreds of dollars a month on that car.

So be flexible…but be careful. It seems most car dealers call all of their funding sources banks. When in reality some are banks, some are credit unions, and most are sub-prime finance companies.

Here is a list of some of the most commonly used sub-prime auto finance companies:

1. HSBC Automotive

2. Capital One

3. AmeriCredit

4. WFS Financial

You want to pass on the sub-prime finance companies–unless you have exhausted all other options. Sub-prime lenders should be your last resort.

And only use credit unions if they report to all three national credit reporting agencies. How do you find out if a credit union reports to all three credit reporting agencies?

Simple–you ask. Ask the branch manager at the credit union if they report. And after you get the loan, check all three of your credit reports and make sure their trade line appears on each one.

The three worst luxury captive lenders to lease or purchase from after bankruptcy are:

1. BMW

2. Mercedes

3. Porsche

The three worst mainstream captive lenders are:

1. Honda

2. Kia/Subaru

3. Toyota

What makes these the worst?

Once these lenders see that you’ve filed bankruptcy, they are less likely to work with you. However, if they are willing to work with you, they’ll want you to be at least several years from discharge and have perfect credit during that time.

Now that I told you how bad the above six lenders are–there are times where they may offer you good deals. For example, if one of the above happens to be the biggest dealer in your area, they may be able to offer you special deals that a smaller dealer can’t.

Of course, things change all the time with captive auto lenders. They change their credit guidelines on a whim to meet their own financial goals. So, it’s always a good idea to at least research these dealerships–just don’t get your hopes up too high.

OK, so you’ve done your research and narrowed down your choice to one or two car manufacturers.

Step 2 in making a lease or buy decision is to purchase your FICO credit scores.

It’s important you have your most recent scores when you talk to car dealers (just like I did with Amy). It puts you in charge.

When you enter a dealership with your FICO scores, the dealer will know you’re a more informed consumer and cannot be taken advantage of. Just know that the FICO credit scores auto dealers use are a little different than what we see as consumers. The scores the dealers review are called FICO Auto Industry Option Scores. The good news…these FICO scores may be higher than your normal FICO scores if you paid all previous auto loans as agreed.

Some car dealers have told me that if your FICO scores are higher than the scores the dealer reviews–they may even use your scores to get a better deal.

You can buy your scores from myFICO.com.

Step 3 is to interview the remaining car dealers on a deeper level.

Start by asking them these questions:

- Which credit reporting agency do you use to make a lending decision?

- What is your minimum credit score requirement to get approved?

- What credit score is needed to get the best interest rate?

- Do your lenders prefer offering lease or purchase financing to a bankrupt debtor?

- What incentives are there to lease or purchase right now?

At this point it’s important to remain open to either leasing or purchasing. Evaluate your options and incentives. Remember, you’re buying the financing. In other words, the most important factor is the willingness of the lender to loan you money.

I personally view the lease versus buy decision in three ways:

1. If you’re recently recovering from bankruptcy, the only thing that matters is if you can get approved at an interest rate you can afford through a lender that reports to all three national credit reporting agencies. So you should only consider lenders that are bankruptcy friendly.

2. Once your credit scores begin to increase, you can start selecting cars based on which credit reporting agency the lender uses to determine if you qualify. Obviously, you should choose the lender who uses your highest FICO credit score to make a lending decision.

3. When your scores are high enough…or two years have passed after your bankruptcy…or your bankruptcy doesn’t appear on the credit report the lender uses, then you can choose almost any car you like. But make sure you still do your research and use your credit scores to help you compare interest rates, terms and incentives.

Do you want a really nice car but don’t think you can afford it? Do you think you are stuck with a crappy car that barely runs? Think again! You can get a really nice car when you look at executive car leasing and the best car lease deals that are available to you. All it takes is finding good car lease deals for cars that are in the executive class by playing dealerships against each other, or by looking online.

New car leasing deals are not hard to find, all it takes is looking in the right spots for them. For example, you should try looking online for leasing deals. There are many online dealerships that offer excellent deals to those who lease through them. You can even lease some brand new executive cars through online leasers. As well, you can find people who want to transfer a lease to someone else. They can’t afford the lease, but you can, so why not take their lease and begin enjoying a new car at a discounted rate?

Another option is to look at dealerships and see what kinds of terms and rates they can offer you on the lease. Then, take that information and see if you can get other dealerships to lower their rates and costs for you. You will be surprised by just how much you can save by doing this. Dealerships don’t like it, but there is very little that they can do about it.

So, is leasing a car a good idea? The truth is that whether or not you go for executive car leasing, leasing a car is a good idea. Finding the best car lease deals for that executive vehicle is an even better idea! There are many lease deals out there for you to choose from, but you need to make sure you get the ones that are going to work the best for you. Don’t just settle with what you think is the best, because there may be a better one around the corner, or on another website.

Leasing a car is becoming the go-to option for many people in tough economic times. They can get discounted rates, shorter terms and better cars with leasing. Even if they want executive car leasing, they can get it and afford it by finding the best car lease deals online, or in their own city.