We know how it is – you want to lease a car but you’re worried about bad credit car leasing. If you’ve got bad credit, the game is probably over, right?
At this point, you probably think you’re never going to get the car you want or need.
The good news is that there is some good news. Bad credit car leasing is actually a thing – in other words, you might still be able to lease a car despite a less than perfect credit score. How so? OSV takes a look.
What Factors Affect Credit Score?
There are a number of things that affect your credit score for better or worse. These include:
- Paying credit agreements on time
- Percentage used of available credit
- Electoral roll
- How long you have been at your current residence
- If you have a mortgage
- Personal loans
- If you have a credit card
- How much of your credit card you pay off each month
- How many credit card purchases you have made in the last 6 months
- Mail order catalogue purchases
- Utility bill payments
Do Funders Work on Credit Score?
It depends. Due to its efficiency, most lenders have an auto approval system which uses a credit score to make a decision. So, if you have a great credit score you will be accepted just like that. OSV has known people with the highest credit (above 960) but with a 40K CCJ that get approved instantly – this will vary though depending on the funder.
However, if you don’t get instant approval, then a human will look at your credit score, payment history, and how much borrowing you have.
There is a chance though that if you have defaults from five and a half years ago, that funders may still approve you. If they don’t, you can always try a short term lease, but more on that later
Do I Have To Go Through a Broker For Bad Credit Car Leasing?
If you have bad credit, then sometimes a broker becomes your only option. Dealers usually only have prime funders, whereas some established brokers will have access to more specialized funders who are prepared to finance those with a bad credit rating.
When you are choosing a broker to go through, you should make sure that they ask lots of questions to ensure that they understand your circumstances fully. If they don’t do this then they may make you go through multiple credit searches which will just lower your score even further. You need to ensure that you get the best advice possible from the most experienced and trustworthy broker.
Does Bad Credit Car Leasing = A Cheaper Car?
Sometimes – but not always. If you want to own a luxury car but have poor credit, your dream doesn’t need to die just yet. Restrictions will apply, but they’re not always as bad as you might think.
Naturally, you will be a higher risk to the funder, which means the payments may be higher when it comes to bad credit car leasing. However, as long as you have a regular, secure income, there’s a great chance that you’ll get approved.
This means that your dream of driving away a top-notch car is still within reach.
With the Financial Conduct Authority regulations, all lenders have to be able to produce is evidence that any lend is affordable for you.
What Would be the Cheapest Car with Bad Credit?
This really depends on a few things, and you need to be open to as many ideas as your broker gives you, such as how much discount is available on the car.
Most specialist funders will also ask for a larger deposit so that they have some peace of mind in case you do not make a payment.
Who Can Lease With Bad Credit?
Some dealers and brokers will run a mile the moment you tell them you have bad credit. This isn’t because of any stigma attached to bad credit, but more to do with the fact that they either don’t have the knowledge needed to help you, or they don’t have the contacts.
Other car dealers and brokers will work with specialist finance houses who deal with bad credit car leasing, and who will, therefore, have the experience needed to help you out.
The key thing is, to be honest right from the start. Not only will you gain the respect of the dealer or broker, but the whole process will be so much easier for you.
Can I Get a Lease for a Car in Someone Else’s Name if I Have a Poor Credit Rating?
If you have a bad credit score but you know someone who doesn’t, leasing in their name is an option. However, there are a few things you should know before you consider this.
There are some funders, such as Mercedes finance, who will reject someone in your household if you have been declined, even if they have a perfect credit score.
There is also the option to lease through a friend. However, the car will be in their name and they will need to insure it, while you could be a named driver. Ultimately, the car is their responsibility, and this is something they’ll need to be comfortable with.
Short Term Rental with Bad Credit
If you’re six months away from having a CCJ fall off your credit history, a short-term rental could be your best option.
You can lease a car from anywhere between 1-12 months and this means you only have to pay the higher price for a shorter amount of time. After that time is up and your CCJ has dropped off you can switch to a long-term lease.
Of course, when you make the short term rental payments on time, your credit score will gradually start to increase. So it’s a win-win really.
Bad Credit Car Leasing – Leasing a Company Car With Poor Credit
If it’s a Limited Company and the Director has bad credit, then there are funders who will look at the company’s credit score and not the Directors. As long as the Company has a good credit score, the Director’s credit score won’t matter.
However, there are some funders who will always search the Director’s credit score regardless of the Company’s credit score and financial standing.
Essentially, the success of bad credit car leasing depends on the person and the situation. It’s easier to help someone with bad credit if they are a homeowner and/or they’ve had the same job for a while. But it is vital that you choose a good dealer or broker who has the experience and the contacts to help you and make sure you can lease the car you’ve always wanted.
Request a call back from our Vehicle Specialists below to talk through your options
Matt is known for being the joker around the office, but he also takes his job seriously. He's got a knack for knowing the best ways to get people approved on credit and works directly with OSV's key accounts across the UK.
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