Can I Lease a Car with Bad Credit?
Can I Lease a Car with Bad Credit?

For many drivers, renting a car is an affordable way to drive a new car. However, in order to benefit from the lower payment, you must be eligible.

What credit rating do I need to rent a car?

The level of credit required to rent a car varies by dealer. Most dealers require a score of 620. Anything below that score is considered subprime. Although many dealers prefer 700 points, you may still qualify for a lease.

The higher your credit rating, the cheaper the rental offer you receive. However, if your credit rating is between 670 and 739, you can also expect a good rental offer. Because the landlord also considers your current income, career and current debt obligations when you apply.

What should I consider when leasing a car with a poor credit rating?

Taking steps to improve your credit score will help you in general, but you can still rent a vehicle before it gets repaired – be aware of these potential pitfalls.


High cost

A low credit score may mean you have to do more to qualify for a lease. For example, a merchant may require a larger down payment. Your lease offer may also include a higher interest rate, called a currency factor or lease factor in the lease terms. This could push you to pay more monthly rental fees than you can afford.

Vehicle restrictions

When renting a car, there are similar restrictions as when renting a car, such as B. Limited mileage per year. If you exceed the allotted miles, you will be charged a per-mile fee.

No equity

And you end up leaving with no assets in the vehicle, meaning you don’t have a trade-in or monetary value to claim a purchase or a new lease. On the other hand, if you pay a higher fee, you may not be able to save enough money to pay another rent.

Ways to Improve Your Chances of Getting Lease Approval

If you want to rent a vehicle with a poor credit rating, there are a few things you can do to improve your chances of getting approved.

Make a large deposit

To show your potential lender that you are obligated to repay the lease, try to pay more than the minimum amount. This is called capitalized cost reduction. The more money you deposit initially, the less your monthly payment will be.

Get a Loan Co-Signer

Another way to get approved is to get a co-signer. Co-signers add an extra layer of security for landlords. Co-signers are equally responsible for the lease and their credit will be affected if you do not pay. If this is your preferred route, make sure you choose a family member or friend with a more reliable credit history than you.


The goal is to reduce the debt-to-income ratio

Lowering your debt-to-income ratio is also a green flag for rental companies. Your debt-to-income ratio (DTI) is defined as your monthly payment divided by your monthly income. As someone with bad credit, you may want to lower this number by paying down debt, refinancing at a lower interest rate, or increasing your income. Use the Debt Income Calculator to get this number.

Crazy shopping

When looking for a rental car, check out several dealers and rental companies to see which offers the best rates for customers with bad credit. Since each dealer’s rental rates are different, you may get a cheaper rental than you expected — and possibly for a lower price.

Other ways to rent a car if you have bad credit

If you can’t get a lease or lease on good terms, you can choose a lease transfer. Companies like SwapALease and LeaseTrader specialize in matching people who want to break leases with people who want leases. While a credit check is still required for lease acquisitions, the terms may be more favorable and no down payment is required.


Another option is to rent a used car. Not all dealerships offer used car rentals, so you may need to shop around to find a dealership near you that offers this service. If you do, please be aware of all the terms and fees you will pay over the life of the lease. If you buy a used car, you may find a better deal.

Final result

While it is possible to lease a car with bad credit, you may not be able to get a competitive lease quote. That could mean a bigger down payment, higher monthly payments, or leasing a car that isn’t your first choice.

If you have the time, taking steps to improve your credit score may lead to better rental deals in the future.

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Jake Smith

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Jake Smith

He is the editor of Eragoncred. Previously, he was editor-in-chief of Eragoncred and a financial industry reporter. Jake has spent most of his career as a Digital Media journalist and has over 10 years of experience as a writer and editor.