You typically need good credit in order to qualify to lease a car. According to Experian, 77.85 percent of all new vehicle leases in the fourth quarter of 2018 went to consumers with credit scores of 661 and higher. If your credit is good enough to lease, or you're working on improving it to that point, read on to learn more about how to lease a car.

1. Find a Car to Lease

How to Lease a CarThe first step to leasing a vehicle is to find the car you want to lease. Leases are available through franchised dealerships of all the major automakers. This is because lease financing is handled by their captive lenders, the finance arms of these manufacturers.

When you lease, you're choosing a new vehicle and most of your monthly payment is based on how much the car depreciates while you're driving it. Therefore, it's a good idea to choose a vehicle that holds its value. The less value the car is estimated to lose over your lease term, the lower your monthly payment.

For example, if you choose a vehicle that's known for holding its value, like a Subaru or Toyota, the car may still be worth approximately two-thirds of its value after three years. So, if you were leasing a $30,000 vehicle, your monthly payment would be based on the $10,000 the car loses over three years (the most common lease term). In this case, the depreciation portion of your lease payment would be approximately $278 a month before accounting for taxes or fees.

If you choose a $30,000 vehicle that isn't known for holding its value and it's only worth one-third of its original MSRP upon lease turn-in, you're looking at payments that are much higher. To find out how much the depreciation portion of your payment might be (again without taxes and fees, which vary by state and lender) divide the depreciation by your lease term. In this example, $20,000 divided by 36 equals $556 a month.

2. Find a Leasing Company That Can Approve You

Based on your research and the car you want to lease, you need to visit a franchised dealership of that brand and get approved. Keep in mind that different manufacturers and dealerships offer different incentives to lease.

If you have a list of vehicles in mind, you can look for different discounts on these models. This allows you to compare deals and choose one that's best for you, depending on what you qualify for.

Once you've decided and are ready to finalize a deal, you can move on to the next step.

3. Negotiate What You Can

In the example above, we estimated a simple monthly payment based solely on depreciation. In reality, there's much more to it than that. Lease payments can be negotiated, and you should negotiate the capitalize cost – the purchase price in a lease – first in order to get your best price.

Like an interest rate in buying, it costs to finance a lease, as well. This is called a money factory in leasing, and it's non-negotiable. You may be able to bargain on factors such as the down payment or security deposit, but if they won't budge, you may need to shop another car or brand to get your best lease deal.

You also need to keep in mind how often you drive when you're choosing your lease deal. Leased vehicles come with a specific amount of miles built in, and going over the allowed limit can cost you as much as 25 cents per mile. You can typically add miles at a lower cost up front, but this raises your monthly payment. Not to mention, if you don't use the extra miles you bought, you're not getting this money back.

4. Sign and Drive

Once you've negotiated your best lease deal, make sure you read over the contract carefully before you sign it. Pay attention to the details – especially the ones that pertain to lease-end. Often, there are early termination fees and lump sum payments involved if you decide to end your lease early, and you should be aware of these from the start.

Also, pay attention to additional costs you may incur, how much insurance you're required to carry, and what happens if you default. Knowing all these details and being prepared for them ahead of time can make the end of the leasing process much smoother.

Now all that's left for you to do is enjoy and take care of the vehicle. Eventually, you have to decide if you want to purchase it at the end of the lease, turn it in and walk away, or turn around and lease another car, but you have some time before you have to make this choice.

Not Qualified to Lease a Car?

If you're not qualified to lease a vehicle, did you know that it's still possible to finance a new or lightly used new car with bad credit? It's true. There's a whole network of dealers across the US – called special finance dealerships – that work with lenders who are equipped to help people in many types of credit situations

Here at Auto Credit Express, we can help get you connected to one of these dealers in your area, so you can save yourself the hassle of going from dealership to dealership trying to find the right one. What's more, a bad credit auto loan helps to improve your credit with each on-time payment, so you may have a chance to lease the next time around.

The process is simple, free, and there's never any obligation. Just fill out our easy car loan request form, and we'll get to work finding a local dealer for you.