You may be able to get a car lease if your credit is damaged, but it's harder to get approved than it would be if you had a good credit score. If you have bad credit and want to lease a vehicle, the leasing company often requires you to meet stricter requirements. Here's what to expect.
Qualifications for Leasing a Car with Damaged Credit
Typically, leases are reserved for consumers with good credit. However, some lessors offer deals to borrowers with damaged credit, but they have stricter requirements.
Be aware of these three things lenders may ask for in order to approve your application:
- Security deposit – It's common for lessors to ask for a security deposit up front if the lessee has bad credit. You get the money back at the end of the lease as long as there’s no fees or penalties.
- Proof of income – Lessors want to make sure you can afford the lease. Bring in a recent computer-generated pay stub that shows your year-to-date earnings to prove your income.
- Proof of residence – Lessors also want to confirm that your current address matches what you list on the lease application. Bring in a recent utility bill in your name showing the address to serve as proof of residence.
When it Makes Sense to Finance Instead
Leasing sounds attractive if you want to drive a new car every few years, but, depending on your current driving situation, it may be best to finance instead. Here are some things you need to keep in mind about leasing:
All leases are short and come with mileage restrictions. You must watch the mileage to make sure you don’t go over the limit – if you do, you end up paying per extra mile.
In addition, you don’t own the vehicle, which means you can’t customize it and may need to pay for repairs before you turn it back in at lease-end. If you don’t, you could be charged.
Another drawback is that you don’t benefit from any equity. You only pay for the portion of the car you use, instead of the whole thing. Your monthly payment reflects this, and it’s rare for a lessor to miscalculate. You could buy the vehicle at the end of the term, but it’s typically only worth it if you really like the car.
Need Help Finding a Dealership?
It isn’t impossible to lease a vehicle with damaged credit, but it ultimately comes down to how poor your credit is, and whether or not a lessor is willing to approve you. If you can set aside some cash for a security deposit ahead of time, you may be in better shape to get approved.
If you've decided that you want to finance your next car instead, Drivers Lane is here to help. We work with a nationwide network of special finance dealers that have the lending resources available to assist consumers dealing with damaged credit.
We'll work to match you with a dealership near you for free. All you need to do to get started is complete our simple and fast auto loan request form.