When considering the purchase of a new vehicle, you should look into the option of new car leasing. Leasing is an option that sports several benefits. Some of these include lower monthly payments. You can get a new car every 3 years, less maintenance to worry about, little-to-no down payment, and at the end, you can just walk away. On top of all that, if you have little or bad credit-leasing may be the only option available.
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However, this is not to say that just because one is able to lease a vehicle with bad credit that the rate will be as good as with a high credit score. In fact, having a low credit score can qualify a person for having a very high APR. As high as 23%. Those with a bad credit score might be less likely to have special promotions granted to them. This is because those special promotions are for "well qualified lessees". What does it take to be considered "well qualified"? It requires a credit score above the 680-720 range, a steady income, and no excessive debt. Anything that doesn't fit those requirements is subject to harsher treatment and a harder time getting a good deal on a car.
Some of the penalties that a person may have to pay if they attempt to lease a car would be: A high monthly interest rate (as mentioned above), the possibility of having to pay a large down payment, or an up-front security deposit that may need to be paid. Sometimes all three could be repercussions suffered by the buyer.
However, there are a few steps that can be taken to kill two birds with one stone, and the first involves finding a lender. Having a bad credit score should be the end of it all in the search for a new vehicle. There are lenders out there who specialize in sub-prime lenders. Granted, there will be a high APR, but it's still a loan, and it is still an opportunity to improve upon a bad credit score. Another option would be to have a co-signer. This means that if the original lessee would fail to make a payment, the co-signer would be responsible. This could be easy to do if a willing co-signer can be found. A slightly more unusual method of increasing the odds of getting a lease with bad credit is to compile a list of about ten references for the company so that people can vouch for you. Just because a person has a bad credit score, doesn't necessarily mean they intentionally do not make payments. They may have had a rough time for awhile that managed to ruin everything.
While having a bad credit score can make leasing a vehicle more difficult, accomplishing such a task is a golden opportunity to begin repairing that score via low monthly payments. Not all hope is lost when the score isn't as high as it could be. It's just important to shop around and be honest with lenders. Know what you are getting into and start to make a conscious effort in building your credit score back up.
