What did you want to know?Does anybody care to comment on leasing and credit ratings??
Both car purchases and leases show up under the same heading of loans on credit reports.
With a car purchase, lets say its a 50k dollar stelvio you got for 38 grand, your liability will show as 38 grand and each on time payment made will help your credit score and each amount your liability is reduced also helps your score.
To be clear, credit reports don't report your assets. Underwriters who are considering extending you credit will attempt to calculate your assets but your credit bureau report does not.
What it does do though is look at amount of credit you have available vs credit you are using, age of accounts, number of accounts, timeliness of payments, account standing, and delinquincies/public records/ chargeoffs.
So back to your 38,000 dollar liability. .... you will start off with this being a new account with full liability... no equity as you havent made a payment yet. As you pay it down it continues to look favorably to your credit as the account ages, as you make timely payments, as your account remains in good standing, and as your equity increases (used credit vs available credit decreases)
A lease deal is not really much different than a purchase as far as sealing the deal actually. You negotiate the "sale price" on a lease just like you do on a purchase. I negotiated 24% off msrp on the giulia. It states these figures right in your lease contract just like a purchase contract.
Where the lease is different is how it looks on a credit bureau report.
Lets say i leased that same 50k truck for $399 per month and that rate was based on 24% off msrp, the rental fee/money factor, and agreed upon residual. So my three years of payments will equal roughly $14,364
For the leasee, the liability or the auto loan/lease account will actually start out showing a $14,364 liability as opposed to a 38k dollar one. Same positive benefits apply as you pay it down as does the purchase loan.
So the credit bureau and credit rating scores really dont care much if you purchased or leased. Actually the leasee will show a lower liability but as long as youre making goid payments that shouldn't really matter.
Where these things become more important is to underwriters. When people are looking to extend you credit they are looking for assets versus liabilities.
In this case leasing vs buying could be completely advantageous depending entirely on HOW the person is leasing and buying and what their total asset and liability picture looks like.
As an example, many people do 6 year loans on cars nowadays. Theyll be upside down for likely 3 of those years. Theyll look bad compared to a leaeee who is into a stelvio for $399 per month.
On the other hand you could have really gotten duped on a lease and be paying out $2000 per month on a 911 versus someone who did a 3 year loan on one and is already at year 2. That person has more equity because they didnt make a bad deal and paid it off more.
Ahh but now what if i did that $399 a month lease and then took the $434 per month i saved and bought a rental unit with it and now have equity and cash flow in that unit while the $833 per month car buyer has nothing but a 3 year old alfa?
Just way too many variables on this so i wont even go into everything that our decisions in life make when being considered by underwriters.
You asked about credit reports so lets just stay with that. Both car loans and leaes are looked at similarly by the credit bureau robots with the lease showing up as a lower dollar value liability.