Can You Lease a Car with Poor Credit?

You can lease a car with poor credit, but you will need to work a little harder to determine the terms of your lease. Leasing a car requires the same basic credit and income verification as securing an auto loan. You will be expected to make lease payments each month just as you would be expected to make installments on a loan. If you have bad credit, your potential leasing company will want additional security from you to assure you are able to make the payments.

Income Is Important

Even more than your credit score, your income will largely come into play when a dealership is considering leasing you a car. A lease is a very low-risk option for most dealers. If you fail to make a payment, they can seize the automobile much faster and simpler than going through a repossession of the vehicle if you were to have it titled in your name. Therefore, the leasing agent is most concerned about whether your income can support the monthly payments.

Stated income is not generally used by any leasing company or lender at this point in time. Instead, you will need to provide actual proof of income from your employer. You can do this by requesting your employer provide proof of income, showing the leasing agent tax return statements or even providing paycheck stubs. The leasing agent may also want to verify the balance of your checking or savings account in order to have a general idea of the funds you have available each month.

Other Debts Are Considered

Your income alone is not as important as your income to debt ratio. Even if you have a very large salary, you may have difficulty meeting your obligation to the lease if you owe several other lenders each month. Your mortgage debt and student debt will likely be the two greatest contributing factors to your total debt profile. If you do not have either, a leasing agent will still want to confirm your rent payment and other general expenses. For the most part, a leasing agent will accept a statement of your monthly incomes without absolute verification. The agent can verify your large debts with a credit check. Your rent payment, though, may not be accessible, and you can usually just supply this through a signed statement.

Performance on Other Leases Reviewed

Your rent payment may be the only lease you have ever taken. You can provide a statement from your landlord if you are a good tenant, and this will boost your ability to secure an auto lease with bad credit. You should be aware that leases do not typically show on your credit score. Paying your rent, for example, does not boost your credit because there is no record of your performance on this debt. Paying your auto lease will result in the same neutral credit rating. Paying the lease will not build your asset profile and it will not build your credit. Ultimately, if you have bad credit, you may benefit from actually taking a loan so both of these factors are increased before your next financing need.


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