How to Lease a Car With Bad Credit

by Brooke Pierce

When leasing a car, you will encounter problems if you have a low credit score and a spotty credit history. Most of the time, you will have to pay a high interest rate and make a large down payment. You should inspect your credit report regularly to ensure that it is accurate. Leasing a car with bad credit requires careful shopping to identify a lender that will give you the lowest rates possible.

Examine Your Credit

Identify why you have bad credit and how bad it is. Bad credit generally results when you do not make payments on time or when you have defaulted on a loan. It shows the lender that you pose a risk for missing payments or even defaulting on a loan. When applying for a lease with bad credit, your dealer and also your finance company will ask for your credit score or credit history report from a credit reporting agency like Experian, TransUnion and Equifax.

Identify Low-Credit Lenders

Try to secure a preapproved loan online. A majority of conventional lenders normally refer borrowers in your situation to low-credit lenders. These institutions specialize in lending to borrowers who have poor credit. Examples are Cars Direct, Auto Credit Express and My Auto Loan. They provide loans to people who have less-than-perfect credit. Interest rates are higher for people with low credit.

Consider Lease Takeover.

Take over a lease of a car from an individual who wants to get out of her lease. This is called a lease transfer. Though your credit will be checked, the requirements are not as strict as those for a new lease. There are online companies that assist in matching the lease sellers with the buyers, such as Swap a lease, Lease Trader and Auto Lease Breakers.


  • Takes steps to improve your credit, such as:

    • Pay off large credit card balances.
    • Do not file  bankruptcy; a bankruptcy can affect your credit for up to 10 years.
    • Pay your bills on time.
    • Get a cosigner or car loans

About the Author

Based in Amsterdam, Brooke Pierce has been writing automotive-related articles since 2012. She holds a Bachelor of Science in automotive engineering technology from Ferris State University, Big Rapids, MI.