Car Lease with Bad Credit
It is possible to get a car lease with bad credit, but you could be charged a higher interest rate in order to do so. It is actually easier for a person with bad credit to buy than to lease. The reason for this is that leasing is considered by finance companies to be a higher risk than buying with a loan due to the fact that a down payment is often not required and that the outstanding amount that is owed on a lease almost always exceeds the worth of the vehicle for most of the term of the lease, which is a result of the low monthly payments.
It’s also more difficult to get a car lease with bad credit because if the person leasing the vehicle misses a payment the leasing company stands a greater chance of losing money if the end car ends up having to be repossessed. Even with a good credit score you could still be turned down for a lease if you have an excessively high debt load when compared to your income. Lease companies may not be willing to let you add more debt as it increases the probability that you will have problems making the payments down the road.
It is still possible though to get a car lease with bad credit, it could just end up being a lot more expensive than leasing should be, as you may be hit with a considerably higher interest rate, or have to put a considerable amount of money down for a down payment. You may also have to pay a refundable security deposit, or you may even end up having to do all three of the above mentioned things. Lease credit requirements can vary between different banks, dealerships and leasing companies so it definitely pays to shop around when you have a less than perfect credit score.
Getting yourself a co-signer will also make a car lease possible when you have bad credit. The co-signer must be someone with a better credit score who is willing to take over the payments in the event that the primary borrower fails to make the required payments. This does not change the fact that it is a one-party lease, the co-signer is simply a back up. This is an excellent way to restore a good credit rating and enable you to get a car lease with bad credit.
With our current economy it is becoming more difficult to get approved for leases and loans with American car companies, Ford, General Motors and Chrysler, let alone trying to get approved for a car lease with bad credit, then it is with foreign car makers like Honda, Toyota and Nissan, who still have plenty of cash to lend.
Filed under: Best Car Lease Info
