Can You Lease A Car With Bad Credit?

So your credit score is lacking because at one time or another you went through some hard times, made some poor financial decisions and now you have to pay for it... right? Wrong! Just because you have bad credit, it doesn’t mean you can’t lease a car. The problem of bad credit usually reveals itself when applying for a car loan, as the broker pulls up your credit score. A credit score is a calculated, numerical representation of a person’s entire credit history. Usually, if the score is less than 600, lenders will consider the offending party to be a greater risk than someone with a credit score of say, 900. “Subprime borrower” is sometimes the term given to those who have low credit.

Leasing a car can be a good idea for those that lack capital, or if you’re looking to upgrade to a better or different vehicle in the near future. In this sense, leasing can provide more flexibility. Leasing a car allows you to acquire an asset with minimal, if any initial expenditure. Many institutions offer leases specifically designed for people who have bad credit.

Leases are beneficial in that you only pay the portion that you ‘use up’ during your lease. For example, say you lease a car that is worth $10,000 and has a resale value after 3 years of $5,000. You’re paying the difference - or $5,000. When you buy (or pay off a loan) you’re paying back the full $10,000. In other words, when you lease, you are only paying for what you’re borrowing. As an added benefit, there are many lease-to-buy options that allow you to start out with lower lease payments and then buy the car at the end of the lease. This can be more expensive in the long run than buying outright, but if you don’t have the cash during the initial buying period then this is a good option.

How can you lease a car with bad credit?

● First obtain a copy of your credit score and understand what it means. If you know why you have bad credit then you can work on building up your rating. Improve your credit score as much as you can by requesting that the credit reporting agency remove any non factual items.
● Next, locate a car dealership that provides leases to those who have less-than-ideal credit. Usually large dealerships can accommodate bad credit ratings.
● Work out a deal for a bad credit car lease, or bad credit car loan if you don’t think you’ll be able to lease. Many dealerships are welcoming to those who are eager to lease but have poor credit ratings.

Leasing a car with bad credit has its advantages. When you lease a new car every two or three years, you can enjoy a car that has the latest features and safety technology. Moreover, the car is always under warranty. If you can properly maintain your cars and drive an average number of kilometres then leasing is a good option. That being said, leasing won’t allow you to build up equity which is a good step in improving your credit score. Additionally, if you are considering purchasing the car after your lease is up, be aware that you’ll be paying more money in total than you would have if you bought it outright. There are both pros and cons to leasing a car with bad credit, and you should discuss your options with a bad credit specialist to find out how a lease can fit your lifestyle.