Tesla lease denied due to lack of credit history

[NigelM]

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.

Ok, you were refused (and you understandably don't want to share private details) so that's a reason to post a warning thread that the Tesla lease is "a joke/waste of time" and the rest of the world should think twice because you didn't like the answer you got?

 

[hyperpretension]

Setting up a lease financing subsidiary and issuing a press release about it just so it can deny credit to this guy sure seems like a strange practical joke to play. Tesla must really have it out for him.

 

[Lloyd]

Tesla has other startup costs that they are depreciating, and likely do not need the tax credit in the current year (see annual report). If they don't need it and can't use it then they can't pass it on.

 

[AnOutsider]

Ok, you were refused (and you understandably don't want to share private details) so that's a reason to post a warning thread that the Tesla lease is "a joke/waste of time" and the rest of the world should think twice because you didn't like the answer you got?

Agreed. This is like posting a warning about *insert bank here* that denies your loan, or *insert screenname here* on *insert dating site here* that rejected your advances.

 

[xza8]

Looks like the details were overwhelming so I revised the original post.

I'm sure if you take home $80K/month gross, you would be annoyed if someone told you that your business can't afford $2K/month.

 

[matbl]

With those numbers I can certainly see why you are irritated.
A quick question that isn't obvious to me as non-american. What do you mean by lack of credit history? That you couldn't or didn't want to provide a history or that there isn't one (no previous credit)?
Not having previous credit while having good income is usually what gets you a loan/credit on this side of the world. Having bad credit history or not wanting to provide one (hard to avoid with our systems) will not get you a new loan/credit no matter how good your income is.

 

[Al Sherman]

With those numbers I can certainly see why you are irritated.
A quick question that isn't obvious to me as non-american. What do you mean by lack of credit history? That you couldn't or didn't want to provide a history or that there isn't one (no previous credit)?
Not having previous credit while having good income is usually what gets you a loan/credit on this side of the world. Having bad credit history or not wanting to provide one (hard to avoid with our systems) will not get you a new loan/credit no matter how good your income is.

Our credit scores are based on more than just income. We take a hit on the overall score for NOT using credit. I never borrow money, and I have one credit card which is paid off monthly. My credit score is consistently downgraded due to not using enough credit. It's not a big enough hit that I would be denied credit (guessing) but it IS a downgrade. I'm guessing I would easily get a leased vehicle from Tesla if I signed a personal guarantee. I could be wrong.
Maybe the question is: what is the OP's current credit score?

 

[NigelM]

Looks like the details were overwhelming so I revised the original post.

I'm sure if you take home $80K/month gross, you would be annoyed if someone told you that your business can't afford $2K/month.

That's polite of you to share details. Sure it's annoying but I still have to say it's a little naive, you'd have a hard time getting a TV on credit from Best Buy with no credit history. That's the way the system works in this country.

(I'm in the same situation as Al and have been for years.)

 

[ItsNotAboutTheMoney]

Looks like the details were overwhelming so I revised the original post.

I'm sure if you take home $80K/month gross, you would be annoyed if someone told you that your business can't afford $2K/month.

I couldn't co-sign on a car loan (for a much cheaper car) a few years ago because of a lack of credit history, despite having enough cash to buy it outright and more than enough annual disposable income to pay for it within a year. So, I sympathize but I think that your OP was off the mark. Credit history is not just about ability to pay, but a record of whether and how you pay.

 

[matbl]

So the credit system encorouages you to use more and more credit? Man that's stupid, no wonder the 2008 crash happened.
Ok a little bit OT, I know.

 

[NigelM]

So the credit system encourages you to use more and more credit? Man that's stupid, no wonder the 2008 crash happened.

Not quite correct. The system encourages you to use credit regularlyand meet all your payments. Not using credit, not meeting payments, or using too much credit can/will negatively affect your score.

[/OT]

 

[green1]

I'm sure if you take home $80K/month gross, you would be annoyed if someone told you that your business can't afford $2K/month.

Actually, that doesn't mean a thing, without knowing if he also spends $90K/month. Credit scores aren't just about how much you make, they're about whether or not you are likely to repay your debts. If I was the lender, I wouldn't care how many millions you make, if your history doesn't say you pay back your creditors you aren't getting a nickle from me. 2K/month is an awfully big loan to give to anyone with no credit history.

 

[ElSupreme]

Looks like the details were overwhelming so I revised the original post.

I'm sure if you take home $80K/month gross, you would be annoyed if someone told you that your business can't afford $2K/month.

If you have crap credit they won't care how much money you have, since you don't seem to pay your bills anyway.

If you are clearing $80k a month just buy the thing cash!

 

[Teriyaki88]

Lack of business history is the biggest factor for the decline. My banker hat says 1) wait until your company meets the criteria or 2) buy the car personally if your personal credit score is strong and you meet the criteria, then lease it to the company. Consult your tax person prior to doing so.

 

[dsm363]

Maybe it's time to establish a line of credit for the business now so you can pay it off, develop a good credit score and not run into this in the future. Might not help you this time around though.

 

[dflye]

If you are clearing $80k a month just buy the thing cash!

I thought he said gross income, not net income... if the profit margins are low or other expenses are high, $80K/month gross may not translate into enough buffer for the credit checker to think that $2K/month is a safe risk for them.

 

[FlasherZ]

Our credit scores are based on more than just income. We take a hit on the overall score for NOT using credit.

Well, kinda-sorta. Having a *lot* of credit and a ZERO credit balance is bad. But having just 1% outstanding makes you jump to the top of the heap. This graph from Credit Karma:

 

[ItsNotAboutTheMoney]

So the credit system encorouages you to use more and more credit? Man that's stupid, no wonder the 2008 crash happened.
Ok a little bit OT, I know.

Not really OT, it's really what the thread is about.

The credit rating system doesn't really encourage anything, it's a measure of your worth to lenders. They like people to
- carry a comfortable amount of debt
- make regular payments on time
- keep accounts open instead of paying off early and switching a lot.

How you value that rating is up to you.

 

[xza8]

The reason was lack of credit history, not bad credit; missed payments = nil.

I am now second guessing if I still want the P85+ or a more luxurious car since $120K opens up a lot of options.

 

[SFOTurtle]

The reason was lack of credit history, not bad credit; missed payments = nil.

I am now second guessing if I still want the P85+ or a more luxurious car since $120K opens up a lot of options.

So you have little or no credit history, get refused (rightfully) when you seek a $100k loan without any such credit history, and then complain that the process of getting a loan from Tesla is a "joke" and a "waste of time." Hmmm, I think we have a clearer picture now. How is Tesla (or any other potential creditor of something north of $120k) supposed to know you are a good credit risk with no credit history? Moderators: I would suggest revising the title to something like "Tesla lease will be a waste of time for anyone who has little or no credit history."

If you were looking to buy a Tesla only for the "luxury" of it, let me know when you can find something else that is electric, has 200+ miles of range, does 0 to 60 in less than 4 seconds, and looks like a Maserati.