Do I Need Good Credit To Lease A Vehicle? What Your Credit Score Means.
Do I need good credit to lease a vehicle? Believe it or not, this answer depends on many factors. You see leasing has been growing in popularity for quite some time now.
But before you put all your eggs in one basket, there are a few things you should know.
Let me explain exactly what I mean.
When you "finance" a car your intention is to purchase it. Once the loan is completely repaid, you own the car.
When you "lease" a car you are simply paying for the USE of the car. In other words, you NEVER own it.
During the lease you are responsible for the car's maintenance and upkeep and you are not allowed to sell it.
At the end of the lease, which can be anywhere from 2 to 5 years, you return the car.
Keep in mind that some leases do allow you the option to purchase the car at the end of the lease.
But here's the deal...a good credit score is the most important factor when you are considering leasing a vehicle.
Don't hold your breath on getting approved by the lease company if your credit score is poor.
In short, every lease company requires that you go through a credit approval process before preparing a new lease contract.
Let me shift gears here for a moment. There may be a way around this strict credit approval process. Qualifying for a car lease when you credit is bad can work toward your advantage when the economy is not at its best.
When dealers are hurting for business, it may be easier to get credit. But understand that you won't get the vehicle dirt-cheap or with the best possible terms.
Usually a substantial down payment or deposit is required in order to secure the deal when you have poor credit.
Know this: Lease companies look to extend credit to individuals who have credit scores of 660 or higher or 'A' or 'B' class credit scores. As you can see, it pays to know your credit score before you look into setting up a lease agreement.
All in all, the answer is YES to the question, "Do I need good credit to lease a vehicle?" No doubt it, an excellent credit score is the only way you will be able to lease a vehicle under the best terms.
So read the fine print before you make your move. You don't want to get caught putting the cart before the horse.