How to lease a car with bad credit

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For many consumers, leasing a car provides an affordable way to get a new car. The monthly car payment on a lease is often less than a monthly car payment on a purchase.

Just as with a car purchase, though, you have to qualify for a car lease. If you don’t have good credit, it could affect your ability to lease a car. However, it is possible to lease a car with bad credit.

What credit score do you need to lease a car?

The credit score required to lease a car varies from dealership to dealership. At most dealerships, the minimum credit score you can have is 620; anything below that is considered subprime. Although many dealerships prefer a score of 700, you may still be able to get a leasing offer.

The higher your credit score, the more favorable leasing offer you will receive. However, you can still expect a good leasing offer with a credit score in the 670 to 739 range. The lower your credit score, the less likely you are to receive a good leasing offer, if you receive one at all.

Your credit score is not the only factor dealerships will review when evaluating your lease application. They also will look at your current income, employment history and current debt obligations.

What to consider when leasing a car with bad credit

Taking steps to improve your credit score will help you in the long run, but can you lease a car with bad credit now? It’s possible. Having a low credit score could mean you will need to do more to qualify for a leasing agreement. For instance, the dealership may ask for a larger down payment or security deposit upfront.

Also, your lease offer may include a higher interest rate, known as a “money factor” or “lease factor,” in leasing terms. This could inflate the cost of your monthly lease payment beyond what your budget can afford.

Dealerships offer different leasing deals for different models, so it’s possible the leasing offer you receive is not for the car you want. Before talking with any dealership, have a list of three or four vehicles that you are willing to accept in the event you can’t drive off in your dream car.

Remember, too, that leasing a car has similar restrictions restrictions as renting a car, such as limited mileage per year. You have to turn in the car once the term of the lease ends, and, if you are over your allotted mileage, you will have to pay a per mile fee for the overage. You will walk away with no equity in the vehicle, meaning you won’t have any trade-in or monetary value to apply to the purchase or lease of another car.

When looking for a car lease, shop around at several dealerships to see which dealership offers the best deal to lease a car with bad credit. Given each dealership evaluates lease offers differently, it’s possible you could receive a more favorable lease offer than you expect.

Alternative ways to get a car when you have bad credit

If you cannot get a lease or a lease with favorable terms, a lease transfer may be an option. Companies like and specialize in pairing people who want to get out of a lease with those who want a lease. While lease takeovers still require a credit check to qualify, the terms could be more favorable without requiring a down payment upfront.

Another option is leasing a used car. Leasing used cars is not something all dealerships offer, so you may have to shop around to find a dealership in your area who offers this service. If you do, take note of all the terms and how much you will pay over the term of the lease. It’s possible you may find a better deal by purchasing a used car.

Bottom line

Although it’s possible to lease a car with bad credit, you may receive a lease offer less favorable than you anticipated. This could mean a larger down payment, higher monthly payments or leasing a car that isn’t your first choice. If you have time, taking steps to improve your credit score could result in a better lease agreement in the future.