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Interest Rate vs Lease Rate
- Know the difference. By definition, the IRS has ruled that to qualify
as a lease, the payments cannot be broken into interest and principal.
Therefore, the term "interest rate" does not apply to a
true lease. Subsequently, some lease companies quote a "lease
rate" (which is NOT an interest rate and can be ambiguous). To
accurately compare rates, we suggest comparing actual payments. In
general, the stronger your credit history and longer your time-in-business,
the lower your payments may be.
Pre-Approvals (letters and credit cards)
- Here's how it works. You receive a pre-approved credit card in the
mail. It refers to you by name and states that you are pre-approved
for a preset dollar amount and may even give you an activation key.
When you call (be cautious of 900 numbers), the finance company will
require your social security number to "activate" your account.
When you hang up the phone, you believe you just secured a lot of
money. However, that finance company will be running a credit bureau
check with your SS# and may or may not approve you. Therefore, they
may or may not activate your credit card.
- How to Protect Yourself
- Be careful. Don't sign a lease or select equipment based on
a pre-approval! Make sure you receive an approval. There is a
difference.
- You cannot receive an active credit card immediately. A finance
company will need to check your credit history using your SS#.
Do not believe them if they say they do not require a credit check.
- Be careful using 900 number. They can be very costly and part
of the scam.
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