For many of us, a car is a necessity to go about our day to day lives, not a luxury. However, for people with bad credit buying or leasing a car can be a bit of a challenge.
In this article, I’ll focus on helping you get a lease if your credit is bad as I’ve previously written about buying one. (If your funds are really limited, you’ll be better of buying a used car than leasing a new one)
One thing you should know is that a lot of leasing companies really prefer to work only with people with fair, good, or excellent credit. This is especially true with luxury manufacturers like Mercedes and BMW.
4 Tips To Lease A Car With Bad Credit
Deposit
Some leases don’t require any up front deposit, but many do. If you’re hoping to lease a vehicle with less than perfect credit, make sure you have enough cash to put a deposit (if you were buying, we’d call it a down payment, in leasing it’s a deposit, though) on the vehicle. The more expensive the car, the more you’ll need to have up front.
Co-Signor
If your credit is really bad or has a bankruptcy of foreclosure in its past, getting a co-signor may be the only way for you to get a lease. In short, the co-signor uses their credit score to guarantee to the leasing company that the payments will be made and if the person leasing the car stops making those payments, the co-signor is on the hook to make them.
Collateral
One little used technique to get a lease is to offer some form of collateral. The vehicle itself is part of that equation but as you’re probably well aware, a new car losing part of its value the moment it’s driven off the car lot. To put the leasing company at ease, if you have collateral (house, valuable jewelry, boat) you may be able to offer that as a way to guarantee the lease.
Previous Relationship
If you’ve previously leased a car from a company and didn’t have any problems, they may be willing to overlook a bad credit score based on your previously relationship. If you’re already demonstrated a willingness and ability to pay for the vehicle, they going to be your best bet because some trust has already been established and they’ll be far more likely to take into account you as a person vs just you as a number (credit score).
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