How to Lease a Car with a Low Credit Score

It may be harder to lease a car than to finance a car if you have a low credit score. Leasing can be considered even higher risk to dealerships because there is no real down payment required and nearly every lease requires the borrower to pay an outstanding amount at the end of the lease term. Borrowers with low credit scores tend to be slightly less responsible with both loan payments and with the care of the vehicle. To overcome these notions with the lender, come prepared to show you are ready for the responsibility of an auto lease.

Use Higher Interest Rates

Higher interest rates are typically the first maneuver used by lenders to provide some assurance against losing too much money if an auto lease does not work out. As a leaser, you may not have much of a choice except to go along with these higher interest rates which ultimately come down to higher monthly payments. You will likely find higher rates regardless of all other options you can elect. However, there are some ways to reduce the interest rates slightly, and those are described below; they include using a down payment and placing a security deposit.

Offer a Down Payment

Down payments are almost always required to finance an automobile, but they are not often required to lease an automobile. For this reason, people who do not have a whole lot of cash on hand may have to choose leasing a car over owning a car. Also for this reason, the leasing agent, which is usually a dealer, is getting very little the day you actually sign your contract. Dealers who are offering financing get cash in hand that day, so they may be willing to negotiate with the lender more. If you bring cash in hand to pay multiple months payments up front, you may find similar treatment.

Put Down a Security Deposit

A security deposit is basically just cash collateral on the lease. The leasing agent will hold onto the money, and you can only receive it back once the terms of the lease have been completely fulfilled. This can work in the leasing agent's favor because of the remaining sum that usually is on the auto lease at its expiration. The leasing agent does not have to come hunt you down for that money; if you do not pay, they can simply keep the cash security deposit, which is often a larger amount.

Provide Supplemental Application Information

You can overcome the leasing agent's fears you may mistreat a vehicle or be irresponsible with its use by providing supplemental information. For example, if you have an excellent driving record, consider providing a statement from your insurance company saying you have never had an accident or a ticket. Similarly, your landlord or employer can provide a simple statement reflecting your character. This supplemental information will not usually make or break a deal. However, it does show a lender you are willing to take the extra step to establish a positive lease, which can help win them to your side.

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