4

I am 19, but I'm employed as a software engineer, making six figures. I want to lease a very expensive sports car, but I'm not sure if my age will stop me from doing this.

I've had three credit cards, and my credit score is ~720, because I've always paid them off on time. My score (according to the sites I check on) is negatively affected by the fact that I've only got a few accounts, and the high credit utilization in the past (because the limit the cards is low, in the $500-$1,000 range, and I utilized that every month).

That's all the credit I've got to speak of, though. Does having a higher than average income offset the lack of credit that someone my age has? Will dealers lease to a 19 year old?

Improve this question
  • 7
    Dealers will happily lease anything to anyone. Lenders may see you as higher risk, which would be reflected in higher interest rate. You may also want to look at insurance quotes first, they may be through the roof for the combination of your age and the kind of car you're looking at. – void_ptr Mar 16 '18 at 2:17
  • 1
    I know you say you "want" and I am not trying to tell you what you should have. I do suggest considering more long term effects of leasing vs buying, as well as exorbitant vs sensible budget allocation. I understand 6-figure income is amazing at your age. You obviously have a desired taste for finer things. Imagine if instead of allocating what seems like "dispensable income" towards "toys", that you made that money work for you...effectively setting up your future for absolute wealth which would permit a long-term extravagant life-style. – Dustin Mar 16 '18 at 10:07
  • 4
    What are your life goals? If they are to appear rich in favor of actual wealth then proceed with your plan. Dealerships are very adept at helping people meet that goal. – Pete B. Mar 16 '18 at 10:47
  • 1
    Another thing to consider that without experience is hard believe...Your current financial situation may very well change drastically. By this I mean a multitude of "unforeseeable events" could happen, for which a more prudent financial management style can protect against. Examples: Your company goes out of business, cuts employees, cuts pay, your sector becomes saturated, unforeseen life-expenses arise etc. When in a good situation it is all too easy to believe that "the good times will ALWAYS roll." – Dustin Mar 16 '18 at 11:44
  • 2
    Also keep in mind that new cars deprecate in value faster than most other things. So consider this a dabit against your own future! – Daniel Mar 16 '18 at 13:42
4

Will dealers lease to a 19 year old?

This is the TL;DR version of your question.

At 18, you can enter into legal agreements, including buying a house. A lease of an average car is a far lower expense than the average house. Keep in mind, it's not the dealer that leases you the car, it's really the leasing company or bank. The car salesman has made a sale whether you buy or lease.

If you are tracking your credit score via a service such as Credit Karma, you'll discover that utilization has a short memory. As a blogger, and tinkerer, I've tracked my score, let the (main) card we use show high utilization for a cycle, and in future cycles paid in full before they reported the balance to the credit bureau. I watched my score drop and recover by a swing of over 40 points. in short, while the 720 is good, I'd suggest you look to see the day they report and pay the full balance so zero is reported. That should get you higher by at least 20 points.

You can get a firm answer by calling the car dealer. They are in business to move cars. If their financing partner will do the deal, they'll be happy to tell you.

I'd fail you as a Money.SE member if I didn't offer a warning. I don't know what 6 figures means. Are you making $100K or $250K? And how expensive is the car? Is it $100K MSRP? More? Spending your money is your decision, of course. But, in the same manner I'd talk someone out of buying a house that's 6 times their income, I'd hope that you look carefully at what the total cost (i.e. the deposit, monthly payments, maintenance, and insurance) will be. Since we know nothing else about you, such as your current saving rate or housing situation, it would be tough to advise what percent of your income you should keep the car at. A good rule of thumb is for housing, whether rent or home cost, is 25%, and car, about 10%.

Improve this answer

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.