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When it comes to acquiring a new vehicle, we at Auto Credit Express understand that taking out a car loan is not in everyone's plans. For some, the option to lease a car may be a much more attractive offer to pursue than applying for vehicle financing, and it can offer some great advantages too.

Many people believe that leasing a car with bad credit is impossible, but this isn't entirely true. It is easier than it used to be for people with less than perfect credit to be approved for lease contracts, and our network of dealers is made up of experts in the special finance field. However, if it turns out that leasing just isn't a realistic option for you right now, we can still help you with a bad credit auto loan that will get you on your way towards being able to lease a car in the future.

Leasing & Financing

Auto Leasing with Bad Credit

We are often asked what credit score is needed to lease a vehicle, and we don’t have a direct answer for that. This is because there are some lending companies that will not look at a consumer if they have a score below 620. The truth is, many dealerships prefer a good to excellent credit score when looking at lessee, but luckily, these are not the dealers we work with. Here at Auto Credit Express we work with dealerships that specialize in subprime lending. This means that you can lease a new car, even if you have a 500 credit score.

Another option you can take is a lease to own vehicle, or sometimes called rent to own. These programs pretty much work in the same way as a traditional car lease, but they are more tailored to bad credit customers. They allow you to lease a brand new vehicle for a period of time, much like a traditional lease, but each payment you make in that time period goes towards the purchase price of the vehicle. That means at the end of the lease term instead of having a large lump sum to pay the dealership to buy the car, you have a smaller one, if any.

Advantages and Disadvantages to Leasing a Car

While it may not be for everyone, leasing definitely has some advantages:

  • You get a brand new vehicle with all the up-to-date technology and safety features for your family.
  • Every car comes with a warranty, so any major repair costs will not be coming out of your pocket.
  • You have a reliable vehicle to get to and from work and the kids to and from school in.
  • Each payment you make on time will help you to rebuild your credit rating.

These advantages may have you wanting to run to the nearest bad credit auto dealer to lease a car, but there are some things to think about. As with anything in life, the good must come with the bad, and getting a car on lease with damaged credit is no different. There are some disadvantages to keep in mind, like:

  • Many times, there will be a down payment required. This is to show the lending company that you are making an investment in the car, and that you are more likely to pay.
  • You will be burdened with higher interest rates to help the lender cover some of the risk they are taking on you.
  • You may have a weekly or bi-weekly payment schedule.

Determining Monthly Payments for Lease Agreements

One of the biggest attractions to leasing a vehicle versus financing is the relatively low monthly payments. Many dealers will advertise how you can get a brand new car, truck, or SUV for as low as $200 a month. Just keep in mind that your credit rating will ultimately determine what your actual monthly payments will be.

We understand that many people budget for a monthly payment as opposed to a purchase price, and many of the dealers we partner with will work with you and your budget. There are three main factors that go into determining what your payment will be:

  1. Length of your loan
  2. Your down payment
  3. Your interest rate (based on your credit)

If you choose a loan that has a life of 24 months and your neighbor has a loan that is 48 months long on the same car, he will generally have a lower payment than you. The longer you decide to make your lease agreement for, the longer your payments are stretched out, which means that you will pay less.

The same goes for the down payment you make. Due to poor credit issues, you will most likely be required to make a down payment, but how much you put down is up to you. It may seem like a big hassle and nuisance to put a lot of money down, but the more you put down, the less you need to borrow from the lender. This makes your monthly payment lower, making it easier for you to afford. You will also be more likely to get approved for leasing if you are willing to make a decent down payment because it shows the lender that you are serious about being responsible with your contract.

Your interest rate will be the biggest factor in how much you pay, both each month and over the life of the loan. Bad credit scores will make for higher interest rates, which in turn makes your monthly payment higher. Because of this, it's recommended that you make a bigger down payment than is required.

At Auto Credit Express, we have been helping people with credit issues find bad credit auto loans and leases since 1999. If you've decided that bad credit auto financing is the best option for you, get started today by filling out our quick, easy, and secure online application. You could be driving your new leased vehicle home tomorrow!

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