How To Get A Lease With No Credit
If you are newly out of college, you may have a few debts here and there that drop your scores. For someone with a family, you may have maxed out credit cards, and you haven’t gotten around to paying yet.
Or, you may not even have a credit history, which could be worse than having a poor one. For those of us in some of these situations, it may seem hopeless even to hope for a decent car lease.
Do not despair, though since there are a few tricks that you can use to get around that whole predicament. I remember hunting for my first ride with no credit history to speak of.
It took me a while and a lot of near-misses to finally get the right accommodation. My experience will save you the stress of trying to figure out how to get a lease with no credit.
What You Will Need
Before you take on the process of finding the ideal car lease, arming yourself appropriately will help simplify things.
Your Credit History Is Always A Factor
Don’t start lamenting how poor your credit is when you haven’t even checked it yet. Of course, you may have an inkling, but it is better to have the real credit score.
Credit reports are free, and you are entitled to one every year. TransUnion, Equifax, and Experian are the three bureaus where you can get one.
What to expect in your credit history? Loans, mortgages, credit accounts, repossessions, and bankruptcies, and loan payments (including late ones) past and current.
Then there is the credit score, also called FICO score. Getting this one requires you to shell out a few dollars. It is a summary of your credit history in a number between 300 and 850.
A “prime” score is one between 680 and 700 while a subprime rating is below 640. Note that bureaus use different formulas to calculate your credit score, so variations are not abnormal.
If you think that the credit score does not match the history, then you can get a different one from another bureau. The point of doing this is that a car dealership will usually look at the score and pay little attention to the history.
Don’t make the mistake of approaching a car dealership with gigantic expectations. That error in judgment was one I learned from heavily.
You know your credit score, so anyone you approach for a lease is bound to charge extra in one way or another. For one, you may not get the vehicle you want.
Don’t expect to lease a late model Chevrolet when you don’t even have a credit card. Keeping those dreams to an achievable level will save you a lot of trouble.
It would be a waste to start arguing with an auto dealership because the down payment demanded is too high.
Shop Around With Your Scores
You may be surprised that one dealership refuses a 640 while another one accepts it without too much negotiation on your part. Remember that these are businesses and each one operates differently.
Shop around to avoid limiting your chances. Bringing your credit score with you plays a significant part. For every credit request made, your score dwindles up to five points.
Now imagine all the car dealerships you may have to go through before finding the right one. With your scores in hand, you can whip them out and save everyone the trouble.
However, ensure that these are the printouts from the credit bureau. You should only agree to credit checks after working out a deal.
Have a Co-signer
When setting out to lease a car with subprime credit, getting a co-signer can be ideal. A co-signer on a lease reduces the interest rates or security deposit significantly.
Anyone who co-signs your lease will be just as liable in the case of late payments or default. It is why you may have a hard time finding a decent candidate.
If you know a person with good credit and stable income who is willing to co-sign for you, then take the shot.
Alternatively, you can have reference letters from school or work. A professional endorsement from your boss or teacher may go a long way in speaking for your character; hence, convincing a car dealer.
How To Do It
Once you have everything you need, it is time to begin that dreaded search. The following steps will get you closer to getting that vehicle.
1. Takeover a Lease
Leasing a car from an individual owner presents better chances than getting one from a dealership when your credit is in the dumps. There are people out there with vehicle leases but unable to make payments.
What you do is take the lease payments and get your means of transport. Of course, there is still need to check with the car dealership because of the legal paperwork procedures.
However, car dealerships usually accept lease takeovers instead of dealing with an owner who can’t afford payments.
2. Make a Down Payment
Money is a powerful motivator, and it is just what you need to persuade a car dealer, especially with subprime credit. The down payment is a fraction of the total price, so it depends on the car you are leasing.
If you can show a dealer that you have the means to support your car payments, then you have better chances of swaying the decisions in your favor. Offering to prepay a few months shows good faith on your part.
The car dealership won’t have to worry about that period of your lease. This video from Ford gives more insights.
3. Wait a While
When all else fails, you can choose to postpone your car leasing plans. Even if you can’t manage to repair our credit in a few months, there is the option of saving.
If you can afford to put down a significant down payment, that would smooth things a bit.
I was quite clueless when I tried to find a vehicle with a very low credit score, so there were a lot of missteps. If I had this information in advance, it would have landed me a nicer car for half the hassle.
Hopefully, this guide steered you on the right path towards a suitable lease. If you have insights on what more to do when leasing with bad credit, please share.
You can also spread this around for the sake of people who are in the position I was in not so long ago.