Q & A Table of Contents
I Have The Resources, But They Don't Give Me Credit
From: Jim, Clovis, California
Question: I am trying to lease a new car. Although I can make the payments,
I have "B" credit and the lessor feels that they hold all the cards. What do
I do?
Response: You need to investigate both your BATNA (Best Alternative To a
Negotiated Agreement) and that of the lessor. As regards yourself, is there
a way to improve your credit rating through communication with credit rating
agencies or governmental units? Can you improve the monthly lease payments
by making a larger up-front payment? Are there other lessors who might
compete for your business? Could you take advantage of favorable interest
rates on car loans offered by your bank or others, by the car manufacturer's
financing arm, or some other source of funds? Have you looked at the tax
advantages offered by borrowing money using your house as collateral and
using it to buy a car?
The potential lessor's BATNA may relate to their relationship to the
dealership; if the car dealer is hurting, perhaps the dealer will be
motivated to put pressure on the lessor to treat you more favorably. If you
are not buying the car from a car dealership that pressure might not be
available. The lessor's representative may have a monthly quota to meet or
other forces that influence his/her motivation to make a deal with you.
Your research on that will give you more information on the real balance of
power involved. Make a wide range of assumptions about the decision-driving
issues involved, then ask questions to see which of those assumptions are
valid and what that information tells you about the real balance of power.
Always ask questions and try to think out of the box. It is likely to help
you reach a more favorable solution to your problem.
Good luck,
Steve
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