How to Lease a Car With Bad Credit

Having bad credit means you are viewed as a high risk by the finance company who decides whether you qualify for a lease deal. If you have bad or poor credit, you are obviously in a less than ideal situation. However, keep in mind that not everyone has great credit and just because your credit score is sub-par does not mean there is no hope for you.

Generally, if your credit score is not 720 or higher, you will not qualify for the special lease deals that are typically available to tier 1 customers who have a higher credit rating. This means that you will most likely be required to make a much larger down payment or in leasing terms, a cap cost reduction, and you can also expect a higher interest rate or money factor.



If you would like to lease a car with bad credit, there are three different actions that you can take in order to improve the likelihood of getting a fairly good deal:

  1. Generally speaking, your most recent credit history has the greatest impact on your credit score. If your credit score isn’t too low, it would probably be a smart decision to put off leasing a car for several months until your credit score improves. During these few months, make sure all mortgage payments, credit card bills etc. are paid on time. You should also make an effort to reduce your debt as much as possible.
  2. Another great option would be to have a co-signer when you lease your next car. The co-signer is generally a blood relative who becomes equally responsible for making sure all lease payments are made on time. Your co-signer should have a higher credit score in order to offset your lower credit score. Having a co-signer is also an excellent way to improve your credit score over the life of the lease.
  3. Most car manufacturers have their own finance companies. For instance, American Honda Finance Corporation is Honda’s finance company. If your credit score isn’t too great, these finance companies may not approve you for a lease. Your best bet would be to research finance companies that are willing to work with customers who have bad credit. Car dealerships can help you find alternative finance companies.


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