With auto leasing you can reduce your monthly payment but bad credit applicants with approved auto loans may have to begin with retail financing

Finance choices with bad credit

Poor credit applicants often ask if they have the option of something other than a bad credit auto loan, such as leasing.

We know why they ask this question because we've been asked it many times in the close to twenty years we've been involved in bad credit car sales here at Auto Credit Express.

We can also explain why a buy and pay here loan won't help your credit scores and we can cover the no credit auto loans process so our applicants can steer clear of many of the issues that lead to repossession.

But first, it's important to understand the differences between buying and leasing a car.


Called retail financing, buying a car involves financing the entire cost of a vehicle minus the down payment. Interest rates can range anywhere from zero percent for manufacturer-supported loans (for example, Ford Motor Credit) to as high as twenty-nine percent or more in some states for individuals with really bad credit.

Buyers with good credit may not even have to make a down payment, although bad credit lenders typically require a minimum of ten percent or $1,000 down, whichever is less.

In addition, retail financing covers the widest range of customers - from those with excellent credit to those who need a problem credit auto loan.


Lease payments are generally lower than those of retail financing because you only pay for the portion of the car. In the case of a 2 year lease, you're paying for 24 months of interest plus the amount the vehicle will lose in value (its depreciation) over those same 24 months (as determined by the leasing company).

Because most leases don't require a down payment, people who lease are usually “upside down” (the vehicle is worth less than the lease buyout) during the entire lease. This means lenders consider leasing to be a higher risk than retail financing. If a lessee (person leasing the vehicle) misses or stops making payments, the leasing company faces a greater chance of losing money if the car has to be repossessed.

Leasing with poor credit

Because lenders take a higher risk with leases, they usually offer them only to the most qualified applicants - those customers with very good to excellent credit.

Buyers with bad credit also shouldn't confuse the term “rent to own” or dealers that offer used car leasing with typical new car leases. That's because these rent to own dealers and car lots that offer used car leasing normally require you to make a fairly substantial down payment along with high monthly payments. In addition, the vehicles in these programs are generally older used cars.

Where to begin

If you have bad credit, don't get lured into buying from a rent to own dealer that offers used car leasing.

Instead, try Auto Credit Express where we're in business to help people with bad credit find a dealer for their best chance at approved auto loans.

So if you are serious about getting your car credit back on track, you can begin by filling out our online car loans bad credit application.