Do Credit Scores Matter in Car Leasing?
Just like car loans, car lease requires a lessee to have a better credit rating since the lease provider is exposed to a much higher risk as opposed to car loans. People with a bad credit history will frequently have frustrating experiences when closing the car lease deal, especially when times of credit is tight and the economy is stressed. Although some companies are desperate enough for business that they don't mind the extra risk, generally, people with sub prime credit should expect to pay higher interest rates, be required to make higher down payments or make a security deposit.
If you expect to use the car for a relatively short period of time, let's say for 12 months, you can opt to try Car Lease Takeover instead. Although the car lease company has to approve and check your credit history, the requirements are not as strict if you compare it to a new lease. Typically car lease takeovers offer a cash incentive with no down payment to make the deal attractive.
Should you get disapproved, here are a few of your options:
- Get a co-signor for your car lease, someone who will be responsible if you make a default on your payments
- Borrow money or a car from family and friends
- Save cash for your "starter car" and trade it in once you have the money or credit rating to grant you that car lease