Personal Finance

Credit checks: Leasing VS Financing?

  • Last Updated:
  • Feb 11th, 2017 5:55 pm
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[OP]
Jr. Member
Oct 16, 2014
194 posts
15 upvotes
North York, ON

Credit checks: Leasing VS Financing?

On the same car costing $25,000.

When dealer is doing a credit check, does it matter if you're leasing or financing?

For example you want to lease at $350/mo in 36-months. Do they approve/decline your credit based on $350 x 36 ($12,600), or still the full $25,000 price of the car?
2 replies
Deal Addict
User avatar
Dec 12, 2006
4340 posts
559 upvotes
Messed Up Area
The check will be same.

As reality lease/purchase payments are close. And they will determine if you can afford payments with current debt as well.
Newbie
Dec 31, 2013
37 posts
19 upvotes
Mississauga
when broker check your credit he calculates your Total Debt Service Ratio
which is equal:
Housing expenses (per Gross Debt Service Ratio) + Credit card interest + Car payments + Loan expenses
divided by
Annual Income

So in your case, it will be $350/mo * 12
Alex Shapovalov
Taxory accounting services

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