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Buying A Car or Lease A Car

Before you fill out our online application at, you need to know how choosing whether to buy or lease a vehicle applies to credit-challenged consumers.

Specifically, when it comes to financing your next vehicle, what is your best option: Buying or Leasing?

First, we'll discuss leasing. When you get an auto leasing deal, you pay for only that portion of the car you actually use. This may seem a bit confusing, but here's how it works:

In leasing a car, there are two components to your lease payment. There's the interest expense and then there's the depreciation expense of the car. The residual value is the projected value of a vehicle at the end of 24 months. Once the residual value has been determined, it is subtracted from the selling price to determine the vehicle's depreciation. This is the depreciation expense portion of the lease payment. The bank then computes two years' worth of interest, called the "money factor", on the lease. These two amounts are then added together to get the total lease cost and then divided by the number of months in the lease in order to get the base monthly lease payment. Because this monthly payment is usually lower than the payment you'd be making if you were actually buying the vehicle, it makes the car more affordable to own. But because you are paying only a small percentage of the actual value of the car over the lease term, lenders usually reserve leasing for only their best customers. Due to this fact, for customers with bad credit, leasing is really not an option.

Buying, on the other hand, is where you finance the entire cost of the car minus, of course, your down payment. And speaking of down payments, most bad credit lenders will require a minimum of at least a 10 percent down. This not only lowers the cost of the car, it gives you an equity stake in your vehicle as well — something that's important to subprime lenders. It's also significant to bad credit buyers, since the more you put down, the lower your interest expenses will be - something that's crucial with a bad credit auto loan since interest rates can be much higher than normal.

On our web site, we offer auto loan calculators that will help you determine what your car payments might be based upon the information you enter into the calculator. We also specialize in placing customers with bad credit with dealers that can help them. These dealers are experienced in bad credit and, as long as you can meet certain criteria, they most likely can get you approved.

So please visit, and discover how valuable it is to understand the options available to you for buying or leasing a car with poor credit. Because not matter what you want to do, we are here to get you approved.