Leasing a vehicle with bankrupt credit requires patience and creativity. Consumers with lower credit scores Testament face higher worry rates and a larger down expenditure, and may not qualify to let at all.
What is a Lease Vehicle?
An auto lease is more restrictive than owning a vehicle. In a regular car sale transaction, a consumer will own a vehicle after they tender a payment in full or at the end of an agreed upon term. In a lease, a consumer is in essence "renting" a vehicle for a prescribed amount of time and returns the vehicle in the end. A leasing agreement generally has a mileage privilege. Most mileage privileges permit the consumer to drive a vehicle 12,000 to 15,000 miles a year without a payment penalty. If the mileage exceeds the privileged amount, a penalty ranging from 15 cents to 20 cents a mile is charged to a consumer.
Who Is a Good Candidate to Lease a Vehicle?
One option is to select a less expensive vehicle to purchase. Another option may be to sign up for an "on-demand" car service like Zipcar. Alternatively, Hertz offers a monthly lease program with no financing, and only requires that a consumer has a credit card on which to place a retainer hold.
Lease agreements generally have the strictest of credit scoring requirements. Leasing agreements generally require that a consumer have a minimum credit score of 720 to qualify. Credit scores lower than 720 often result in ineligibility, a higher down payment and a higher monthly payment. This option can be much more expensive than buying, and a consumer should heavily factor the overall financing considerations.
Alternatives to Leasing a Vehicle
Consumers with poor credit have plenty of options to consider that are more cost effective come with less stringent credit requirements.Consumers who like to own new cars every three to four years are good candidates to lease instead. Lease terms are commonly extended for periods of 24 to 48 months. Consumers with good credit will often consider leasing due to their ability to get favorable terms, including a low or zero down payment and a low fixed monthly payment. Leasing also provides the consumer the option to drive a vehicle with little to no maintenance needed, since leased vehicles are generally new or nearly new.
Credit Requirements to Lease a Vehicle
To Buy or Lease?
Making the right choice, between owning and leasing, can help save a consumer with poor credit money and possibly help improve their overall credit scores.
