Auto leasing is a way to lower your monthly payments but if you have bad credit your only choice may be car loans with bad credit

Lease a car with bad credit

If you have bad credit you may be wondering if you can lease your next vehicle We know you might be thinking this because at Auto Credit Express we've been working with bad credit car buyers for more than two decades. We even created a bad credit auto loan application to match applicants up with local dealers that work with a broad spectrum of lenders so that they have the best chance of getting approved for a car loan, even if it has to be a bad credit car loan.

We did this because individuals with serious credit problems often experience embarrassment and other issues when shopping for a car at a dealer that doesn't offer second chance auto loans. In addition, getting turned down at a car dealer can lead many buyers to a tote the note or buy here pay here car lot, a choice that usually won't improve their car credit and a finance situation that often leads to repossession.

Understanding bad credit auto leases

In order to understand how auto leasing and car finance affect bad credit auto loan buyers, it's important to understand the difference between leasing and buying.


Usually referred to as retail financing, buying a car involves financing the entire cost of the vehicle minus any down payment or trade equity. Interest rates can range anywhere from zero percent for manufacturer-backed loans (such as those from Ford Motor Credit) to as high as twenty-nine percent in some states for those people with really bad credit.

While buyers with good credit may not even have to make a down payment, most bad credit lenders will require a minimum of ten percent or $1,000 down, whichever is less. The down payment decreases the amount financed which, in turn, also lowers the monthly payment while also lessening the total amount of interest paid on the loan.

Retail finance lenders also cover the widest range of customers, from those with very good credit to those who will need to finance a vehicle with auto loans for bad credit.


When you lease a vehicle, your payments are generally lower than if you were to finance it because you only pay for that portion of the car that you use. In the case of a 2 year lease, this means you are paying for 24 months of interest plus the amount the vehicle will lose in value over those same 24 months (as determined by the leasing company).

Because someone who leases a vehicle generally doesn't have to come up with a down payment and is usually “upside down” (owes more on the car than its value) during the entire lease, banks and finance company generally consider leasing to be a higher risk than retail financing. This is because if the individual leasing the car (“lessee”) misses or stops making payments, the leasing company faces a greater chance of losing money if the car has to be repossessed.

Bad credit auto leases

Because lenders take a higher risk with leased vehicles, they usually offer leases to only the most qualified applicants. Most qualified, in this case, means only those customers with very good or excellent credit and the available income to meet the monthly payments.

Bad credit car loan buyers also shouldn't confuse the term “rent to own” or those dealers that offer used car leasing with a regular new car lease. Both rent to own dealers as well as used car lots that offer used car leasing normally require you to make a fairly substantial down payment. In addition, the vehicles available for lease or rent are generally older and less dependable cars.

Start with us

Auto Credit Express has helped thousands of people with bad credit buy cars and reestablish their car credit at the same time. Our nationwide network of affiliate dealers specializes in bad auto credit.

So if you are serious about getting your credit back on track, why not begin a new chapter in your life by filling out our bad credit car loan application now.