How to lease a car with bad credit

Row of cars in car lot
If you have bad credit, you understand the challenges that come with trying to take out any kind of loan or making major purchases. Getting a new vehicle, whether you choose to buy it or lease it, has additional considerations. That said, there are a number of benefits to leasing a car rather than buying it when your credit is bad. With leasing, you have a shorter contract, lower monthly payments, and a lower down payment. You do not own the vehicle, so repairs and maintenance are covered under the warranty. Another great benefit of leasing is that it allows you to improve your credit score. If leasing is something you are interested in, there are ways to improve your chances of approval.

Tips to Help You Qualify for a Car Lease

If you have decided to go the leasing route, it might not be a walk in the park compared to someone with good credit, but it is certainly possible. For instance, when you are trying to lease a car with low credit, you may be denied. That’s because car companies are worried about the risk that you may not honor the contract and make your payments on time. You have to show them that they can trust you. Thankfully, there are a number of things you can do to better your chances of qualifying for a car lease and getting better car and lease options. Here are five specific tips for things you can do to get a great car lease.

Look at different options

Preparation and research are your best friends when it comes to finding good deals. There are plenty of car dealerships offering leasing options with different terms. Make sure you find out all the details and compare what is available. Don’t be too quick to sign on the dotted line because there may be a better deal waiting for you at the next place. You can even use the lease quotes you have obtained to negotiate better terms with the right dealership.

Watch your credit report

While you are going from dealership to dealership inquiring about their car leases and finding out whether you qualify, more than likely, they may run a credit check to see where your credit stands. Running a number of credit checks in a short space of time can actually bring your score down somewhat. You can avoid this by printing out a copy of your credit report to show dealerships that are preparing a quotation for you.

Show proof of income

Demonstrate you can pay using your proof of income. Dealerships want to know that you have a steady income and can meet your monthly obligations. They usually ask for your proof of income. The more you can prove that your income is stable and sufficient, the better your chances are going to be. You can use your most recent pay stubs to show this. Additionally, you can include a breakdown to show that you can meet your monthly bills as well as the proposed monthly lease amount. If you have a personal reference who can vouch for your financial position, that can only strengthen your case.

Pay more upfront

Very often, the dealership may require a down payment up front to lessen their risk. You can take this up a level by paying more initially and even offering to make some of your monthly lease payments in advance.

Find a co-signer

If you have someone with good credit, such as a family member, who can co-sign your car lease, this can increase your chances of qualifying. It guarantees that someone is going to take care of payments if you default.