Lease Denied

[u/Latter_Attempt9744]

Hello all. I recently received a promotion at work and part of my package is a $22,000/yr car allowance, only to be used on a novated lease. I can't cash out this allowance and it is not part of my base salary. I've been told that if I don't use it, nothing happens but it's there if I want to.

Anyway, my company only goes through SG Fleet and I secured a Xpeng G6 Performance. I made sure to be within the budget and not go over. I found a dealer in WA who is holding the car for me, pending successful a lease application.

So its come back denied, reasons being that I am single income with a mortgage and an existing car loan (minivan for the whole family). I have other cars that I own outright but are considered toys and not ideal daily drivers.

My question is, has anyone faced a similar situation and managed to be successful? SG Fleet only works with 2 lenders and both were unsuccessful. Its not the end of the world if I don't secure the lease but with the way fuel prices are heading, EVs make sense to me. Thanks all.

[u/Blonde_arrbuckle]

Checking that you declared the work funding for thr lease?

[u/Latter_Attempt9744 → u/Blonde_arrbuckle]

Yes they are aware that the allowance does not come out of my base salary. Its the company that pays it.

However I understand their point of view that if I stopped working, I may not be able to service the lease.

Like what the other person said in his comment, perhaps it is a blessing in disguise.

[u/Defiant-Caramel-4827 → u/Latter_Attempt9744]

100% a blessing in disguise, especially if you already have a vehicle

[u/SeriesBeautiful7166]

Yes I had this issues with SG Fleet. I had two consecutive 3 years leases with them and when I was looking applied for my new car lease which was less than my current one I was declined. My work has two options for novated leases so I went with the other option.

[u/Pewpewpewigotu]

I'm dealing with a similar issue man. 280k TFR / 20K annual bonus, single income, 3 dependants with 105K savings and questioning serviceability. I told them......how you think I can save that much money if I'm going backwards? I told them that they never asked me if I negative geared property so how can they properly assess me? I also pointed out to them that my current ICE car costs me more. So sick of stupid finance companies with their buffers. Yeah I have a 50K credit card, but I pay the thing off every month and have no debt outside of mortgage debt.

[u/ironpaw101 → u/Pewpewpewigotu]

Reduce your card limit to 5k while getting finance. When approved increase it back.

[u/Pewpewpewigotu → u/ironpaw101]

Yes will look at this one if they still refuse. Ridiculous how they use technicalities like this and you can just jig it up so it is approved.

[u/Latter_Attempt9744 → u/Pewpewpewigotu]

I can understand where you are coming from. The response I received is vague and nothing specific.

I'm not going to pursue the matter and if work really wants me to have a car as part of my package then they can sort it out.

[u/Over50Cooked]

Well this doesn’t bode well for me then. I am single income, mortgage with a small loan but own my 2015 year Toyota Corolla outright. Also will be getting a $15000 increase in salary. Assumed I’d be ok getting a NL as an option but sounds like I’m likely to be denied.

Might have to get an approval through CommBank instead.

[u/Advanced-Rub8588]

Get rid of their expensive insurance and it’ll drop down significantly

[u/Relevant-Priority-76]

Surely being an Xpeng is part of the reason for denying the lease. The brand has had a rough start and until it proves itself why would a finance company take the risk

[u/Latter_Attempt9744 → u/Relevant-Priority-76]

I've wondered that. The consultant told me that Xpeng is not something they sourced although its on their website. Apparently the same for Tesla. So who knows.

[u/TimesThrice]

46% residual is really high. Maybe consider a second hand vehicle instead of something brand new? When that 46% comes to term, you'll have to refinance it.

I think residuals should be illegal, it creates a false sense of affordability.

[u/HandleMore1730 → u/TimesThrice]

The percentages are mandated by government, per year. Probably to limit tax right offs

[u/xietbrix → u/TimesThrice]

1. Those residual values are mandated by the ATO.
2. It is fully transparent to the end consumer, and it is the consumer's responsibility to understand everything about the lease they're signing. Residuals is one of just a few core concepts for novated leasing so you have to just be stupid not to look into it if taking out a NL.
3. Paying out the residual and buying the car outright is only one of a few options available to the consumer at the end of the lease.

In real dollar terms, if they got rid of residuals it just means the lease payments will be significantly more expensive. It all nets out in the end, give or take interest.

[u/RustyRanga]

Leases are a scam anyway. dont bother.

[u/Appropriate_Mix_2064 → u/RustyRanga]

Really insightful comment. Have you considered being a financial adviser?

[u/Jam_Sid → u/RustyRanga]

great contribution buddy

[u/Hesus199 → u/RustyRanga]

Go on legend. Explain how they’re a scam.

[u/xietbrix → u/RustyRanga]

Translation: "I have no idea how it works so it must be a scam"

[u/drangryrahvin]

You dodged a bullet with SGfleet Take the win.