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Tesla lease denied due to lack of credit history

Discussion in 'Off Topic' started by xza8, Apr 16, 2014.

  1. xza8

    xza8 Member

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    #1 xza8, Apr 16, 2014
    Last edited: Apr 19, 2014
    My company was denied a car lease from Tesla Finance despite excellent personal and business tax returns.

    I'm not going to post numbers as that is not the point of this thread but just wanted to let fellow members know that you should think twice before considering them as I wasted time and a hard inquiry on my report for nothing.

    Update with Details
    - a personal guarantee was agreed, it is part of the leasing program
    - the principal earned almost a million in salary
    - the company earned several millions in net profit
    - the company has $1M+ in cash

    The reason was lack of credit history.

    Since I like the car, I will just buy the car outright despite the wife nagging that I should get a Porsche (already have one, want something new).

    So my advice is unless you have excellent credit history, think twice before applying for their lease as you may waste a hard hit on a super tight underwriting process.

    Update #2:

    Going to get a Panamera GTS instead... love the quality of the interior and the roar of the V8.
     
  2. dsm363

    dsm363 Roadster + Sig Model S

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    Is Tesla the one administering this lease program or does someone handle the program for them?
     
  3. Chickenlittle

    Chickenlittle Active Member

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    I know no details but credit relies on more than income. You mention good tax returns but not credit scores of company nor principals
     
  4. gavine

    gavine Petrol Head turned EV Enthusiast

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    Also how long you have been in business? I know that has a lot to do with business lease approvals as well.
     
  5. yobigd20

    yobigd20 Well-Known Member

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    need..more...details...
     
  6. Canuck

    Canuck Active Member

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    There's mention of personal tax returns but no mention of a personal guarantee - was one asked for and refused? If so, it makes sense Tesla would refuse if the owner of the "excelllent" business bawked at a personal guarantee. That would be a sound businesss practice on the part of Tesla.
     
  7. gaswalla

    gaswalla P4201/85/airsusp/pano/19i

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    This is good to hear, as a TSLA investor
     
  8. yobigd20

    yobigd20 Well-Known Member

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    forgive my noobness but what is a "personal guarantee"?
     
  9. Canuck

    Canuck Active Member

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    If the business goes under, Tesla can go after the owner and his personal assets.
     
  10. Ven Rala

    Ven Rala Member

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    I was told that personal credit scores are used also (even though it is a business lease), perhaps this is the problem
     
  11. AlMc

    AlMc 'Senior Moments' member

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    Any vehicle I have leased in the past through my small business has required my personal guarantee. I believe this is standard. The business has been in existence for about 30 years. My first business leased vehicle was when the business was less than five years old and a personal credit check and business tax return was required, as I recall. Subsequent leases only required my guarantee.
     
  12. tga

    tga Active Member

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    I was a partner in a small business way back when. We applied for business credit, and the bank was more concerned about the creditworthiness/income of the partners than the company as a whole (although part of that was due to it being a startup with minimal income). Personal guarantees were a must in our case.

    And there isn't really a "Tesla Finance", anyway. It's all done through Wells Fargo and US Bank, right?
     
  13. Gizmotoy

    Gizmotoy Active Member

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    No longer correct, actually:

     
  14. AmpedRealtor

    AmpedRealtor Active Member

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    Maybe your credit sucks? Maybe you refused to sign a personal guarantee? Maybe you haven't been in business long enough? Maybe your income is insufficient? Without telling us the actual reason for the denial, your post is rather meaningless. Having nice tax returns doesn't get you a lease. There are other factors.

    What was the reason for your decline?
     
  15. Canuck

    Canuck Active Member

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    We need the OP back to answer the personal guarantee issue. Really, his business has nothing to do with the lease because no lender will provide a business with a leased vehicle without a personal guarantee unless you are fortune 500 company. Without an answer, it seems he wasted Tesla's time and not the other way around.
     
  16. tga

    tga Active Member

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    You're right, I missed that blog entry. Kinda surprises me - I would have thought there'd be better uses for their cash than financing cars, but whatever...
     
  17. green1

    green1 Active Member

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    Or more to the point, they have better uses for the customer's cash than giving it to finance companies... There's a reason traditional dealerships push their financing so hard, it's a major source of income.
     
  18. invisik

    invisik Member

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    That's unfortunate.

    I wish the business leasing would have been around when we purchased in March as we really wanted to do that instead of buy.

    -m
     
  19. tga

    tga Active Member

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    I'm not sure I understand your point - I meant that I would think there are better returns to be had by spending the money on strategic investments like the gigafactory, expanding the production lines, designing the X and E, or rolling out Superchargers in underserved areas (New England comes to mind). These could easily be double-digit ROI, vs a couple of percentage points for financing a car (especially since they have no problem selling everything they can build anyway).

    Every time a car dealer has tried to push their financing on me, it's been with an outside bank with which they've arranged a kickback for loan origination. They've always tried to discourage me from the car company's financing arm, "save your cash", etc.
     
  20. Ven Rala

    Ven Rala Member

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    Also important to note: the $7500 tax credit is NOT available on the business lease. I heard Tesla can't claim it(which I don't understand why) so they can't pass it on to the leasee.
     

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