Leasing A Car Isn’t Just For Perfect Credit

Leasing a new car has always been seen as a privilege reserved for car shoppers with perfect credit, but that’s not always the case. Although high credit scores can unlock better deals, having less-than-perfect credit doesn’t automatically take leasing off the table.

Lenders and dealerships evaluate more than just numbers, and there are ways to improve your chances even if your score isn’t ideal. Whether you have “good” credit or are trying to rebuild it, it is possible to drive off the new car lot in a leased vehicle, but your terms may look a little different.

Minimum Credit Score Requirements

Hyundai

Many drivers may be surprised to learn that leasing a new car doesn’t require a perfect credit score, though the number does play a big role. Lenders use your credit score to gauge risk and determine whether you qualify for standard offers or need additional conditions. According to Capital One, with a lower score, “you could face higher up-front costs, interest rates, or monthly payments.” You could also need a co-signer to qualify for a lease, depending on what your credit score rating is.

The key is knowing the general approval ranges and what to expect if your score falls below them. Understanding these thresholds helps set realistic expectations before you walk into a dealership.

Typical Approval Range (660–680+)

While there is no universal minimum credit score to qualify for a lease, most banks will lend to borrowers with a minimum credit score rating of 675, reports Car and Driver. The tricky part is that not every car dealership uses the same scoring model, but most use the VantageScore system, so your score may look a little different from when you check it on a free app on your phone, like Credit Karma. That said, most customers leasing new vehicles in 2024 had an average score of 755, while 14 percent of lessees had a score ranging from 501 to 660.

What Happens Below That Score

If your credit score falls below the mid-600s, leasing is a little trickier. Scores in the low-600s or upper-500s may require a larger down payment, higher monthly payments, or additional proof of income. Lenders view these applicants as a higher risk, so they try to offset that risk with stricter terms. In some case, applicants with low scores may be required to put down a security deposit or find a co-signer to strengthen the application. Either way, many lessees with less-than-perfect credit still obtain leases every year by adhering to these stipulations.

How Credit Score Affects Your Lease Terms

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Image Credit: Toyota

Once you’re approved for a lease, your credit score influences more than just a yes or no decision; it shapes the actual terms of your lease. Monthly payment, upfront costs, and even the security deposit required can all vary widely depending on your credit profile. For someone with excellent credit, leasing often comes with minimal upfront expenses and lower monthly payments, which can make it a budget-friendly way to drive a new car home.

But for those with weaker credit, the opposite is true: higher costs and stricter terms. Knowing how these variables shift helps you prepare for what kind of lease deal you are likely to see.

Monthly Payments and Interest Rates

Your credit score has a lot to do with how much you’ll pay every month. With excellent credit, you’re more likely to secure a lower monthly rate in addition to the manufacturer’s advertised lease specials, which include lower money factors that reduce the finance charge. On the other hand, lower credit scores can mean higher monthly payments, as lenders build in the extra cost to cover their risk. This can sometimes mean an additional $50 to $100 or more per month compared to what someone with prime credit would pay for the same car.

Down Payment and Security Deposits

As stated, your upfront costs can also change based on credit. Prime applicants might enjoy little to no down payment requirement, while those with weaker credit may need to put down thousands more to get approved. At the same time, lenders may ask for a refundable security deposit to safeguard against missed payments or excess wear and tear. While this raises the initial costs, it can sometimes help secure an approval when credit alone isn’t enough.

Can You Lease With Bad Credit?

Mitsubishi

Although leasing a car with bad credit may seem impossible, it’s more common than most people would think. While dealerships promote lease specials aimed at drivers with strong credit, lenders also know that not everyone will fit into the “good credit” category. Even drivers with a 620 score can secure a lease, though the process may involve some compromises. By understanding the factors lenders consider and preparing the necessary documentation, applicants can make a stronger case. It’s not about being perfect; it’s about proving that you’re capable of meeting the obligations of a lease agreement.

Why It’s Still Possible

Contrary to common belief, leasing with bad credit is out of reach. Dealerships want to sell vehicles, and leasing companies are capable of dealing with various levels of risk. If your score is under 620, you may not qualify for advertised lease specials, but you may be able to get into a lease with modified terms. Having a steady income, proof of residence, and a history of making on-time payments on other obligations can help tip the scales in your favor.

How a Co-Signer or Larger Down Payment Can Help

Two of the most common ways to overcome hurdles are adding a co-signer or offering a large down payment. A co-signer with good credit essentially vouches for you, giving lenders added reassurance. Alternatively, putting more money down upfront reduces the amount financed and signals seriousness, making approval more likely. While these steps require extra effort, they can open the door to leasing even if your score falls well below the prime range.

TopSpeed’s Take

David Traver Adolphus

There’s no doubt that leasing a new car can be easier with prime credit, but drivers on the lower end of the credit spectrum still have options. The trade-offs come in the form of higher costs and stricter requirements for those with weaker credit. By knowing where you stand and preparing for potential roadblocks, you can make more informed decisions. In some cases, it may even make sense to delay leasing a car until your credit improves, especially if you want to quality for the best offers. Ultimately, leasing isn’t only for those with perfect credit; it’s also about finding the right terms for your unique financial situation.

Best Deals Come With 680+ Credit

The best lease deals are catered toward those with credit scores of 680 and higher. With good credit, you can expect lower monthly payments, little to no money down, and access to special incentives. If your score is already in this range, leasing can be one of the most affordable ways to get into a new car.

Leasing Below 620 Is Possible, But Costly

If you have a weaker credit score, you shouldn’t rule out leasing completely, but you should prepare for higher costs and stricter requirements to get into the lease. The approval may come with steeper monthly payments, larger down payments, or the need for a co-signer. However, leasing can still be a viable option, but the closer you are to a prime credit score, the better your options will be.