Leasing a car offers many benefits. Chief among them is the fact it’s a great way to get a lower monthly payment. After all, when you lease a car, rather than paying the full purchase price, you only pay for the depreciation of the car experiences while you’re driving it.
However, if you find yourself being tempted by all of those ads touting amazing lease deals, keep in mind they’re typically reserved for people with high credit scores. With that thought, your next question might be can you lease a car with bad credit?
The short answer is — it depends.
How Scores Are Ranked
According to the Fair Isaac Corporation, credit scores are ranked as follows:
FICO Score Ranges Rating Description
<580 Poor Your score is well below the average score of U.S. consumers and demonstrates to lenders that you are a risky borrower.
580-669 Fair Your score is below the average score of U.S. consumers, though many lenders will approve loans with this score.
670-739 Good Your score is near or slightly above the average of U.S. consumers and most lenders consider this a good score.
740-799 Very Good Your score is above the average of U.S. consumers and demonstrates to lenders that you are a very dependable borrower.
800+ Exceptional Your score is well above the average score of U.S. consumers and clearly demonstrates to lenders that you are an exceptional borrower.
Source: Fair Isaac Corporation
So How Bad Is Bad?
In all frankness, if your score is below 620, you’re going to have to do some work to pull it up to a more acceptable level. However, if you’re carrying a 620 or better, you have a pretty good shot at getting a lease. And, as you can see, a 620 falls solidly in the fair range, while good is considered anything above 669.
Now, before you get too thrilled about your prospects, you should know getting a lease with a 620 credit score isn’t going to be a slam-dunk. It’s going to require a bit more effort.
How to Pull It Off?
So, here’s how to lease a car with bad credit.
You’ll need to—
1. Make a bigger down payment
2. Pay a security deposit
3. Expect the interest rate (also known as the “money factor”) to be way higher than somebody with good credit would get.
You should also plan to be denied all of those sweet lease deals you see advertised on TV, the internet and on manufacturers’ websites.
Other Things You Can Do
In all frankness, you have a better chance of buying with a low credit score than leasing if you really need a car. Given you’re going to have to come up with a pretty sizable down payment anyway, you might as well put it toward buying a car. Looking at a more affordable model will help you keep the monthly payment in the “doable” range without extending the loan period past 60 months.
Another option is to find someone who is willing to share their good credit with you. In other words, ask someone if they would cosign the lease agreement and promise to make the payments if you fail to do so. Bear in mind, this person will be going all the way out to the end of a financial limb for you. You should only do this if you’re absolutely certain you will pay.
So, can you lease a car with bad credit?
Yes, you can — but it won’t be easy and it won’t be particularly cheap.