It may seem that your dream to get into a new car to lease is not to be because of your poor credit rating.
While it doesn’t help to have bad credit, the idea that you can’t lease a car because it is not entirely true.
Leasing a car is a form of financing so you will be inspected, of course. Can you get through that inspection and come out of it with a leased car at the end?
There are ways for this to happen so let’s explore your options.
How was your credit affected?
There are several ways your credit could have been negatively affected. They are not all the same, however, so your credit may not be as bad as you think.
- Individual Voluntary Arrangement (IVA) – This is when you’ve consolidated all of your debts to a company so you can make a single payment to one source. How bad this looks to a creditor depends on the individual lessor.
- County Court Judgement (CCJ) – This is usually bad news with regards to your credit rating but it may not be the end of the line. If you paid off the county court judgment due within 30 days then that looks favourably on you.
- Late payments – How badly this reflects on your credit rating depends on how many payments were late, how large they were and how long ago it happened.
If your credit is less than stellar then your first option is to find lease deals for the cheapest car possible. The lower the amount required to be paid back the more likely you are to get the lease even with bad credit.
If your credit is close to being repaired since it has been a number of years, then a shorter lease deal is probably going to help your cause.
Since dealers are also people, they can use reason and determine that you can still qualify for a loan even with bad credit, contrary to myths about car financing.
Get a guarantor
If you have tried to lease or finance a car and have been denied after your credit inspection, then you can probably still get a lease with the help of a guarantor.
A guarantor is a third party who is responsible for the car finance payments if the main applicant defaults. Find a person you trust, or rather who trusts you, and ask them if they could sign a loan for you.
A family member is usually the most obvious choice for a guarantor. Remember that if you fail to make payments that your guarantor will also suffer the consequences. Only ask somebody to cosign the financing of anything if you are 100% sure that you can make the payments.
Your last option is to use a person to finance the car themselves and then you make arrangements to pay them back over time. This should obviously be a last resort and one that shouldn’t be entered into lightly.