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How to lease a car with no credit history Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make better financial choices by offering interactive tools and financial calculators that provide objective and original content. This allows you to conduct your own research and to compare information at no cost to help you make informed financial decisions. Bankrate has agreements with issuers, including but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money The deals that are displayed on this website are provided by companies who pay us. This compensation can affect the way and where products appear on the site, such as the order in which they may appear within the listing categories and other categories, unless prohibited by law. This applies to our mortgage, home equity and other home loan products. However, this compensation will not influence the information we publish, or the reviews appear on this website. We do not contain the vast array of companies or financial deals that may be open to you.
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3 minutes read Read Published March 03, 2023.
Written by Cheryl Knight Written by Cheryl Knight
Cheryl Knight
Editor: Rhys Subitch Edited by Auto loans editor
Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain the confidence to control their finances by providing precise, well-researched and well-sourced information that breaks down otherwise complex topics into manageable bites.
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Having bad credit or no credit at all could be an obstacle when it comes to leasing a vehicle. However, there are many other options for you to get into an automobile even with less than perfect credit history. You are able to return to the road by agreeing to a higher down payment, finding an additional co-signer, or even taking over another lease. The effect is the effect of credit when leasing While no credit score, or low credit score will not prevent the possibility of leasing, it might require a larger down payment or higher monthly installments overall. The is mainly due to the higher interest rates that those with a lower credit score are eligible for. The average credit score for drivers leasing a new vehicle is 734 as of the 4th quarter in 2022. This is an increase of two points from the three-quarter period of the year 2021, according to . This score falls under the primary category, that ranges from 661 to 780. Three options to get a loan with no credit history If you’re just starting out and don’t have a credit history, there are some alternatives to help you obtain the car you want to lease. In addition, once you have a lease, the payments aid in establishing credit. If you decide to lease again you might obtain a higher interest rate and lower payments. 1. A higher down payment along with reducing total cost of the lease over its duration and consequently your monthly payments, the willingness to make a larger down payment can make it easier to qualify for the car lease. “Without any credit history, you should expect to pay a bigger down payment and an higher interest rate than the average, as your lease will be considered to be higher risk,” says Steve Sexton the chief financial officer and consultant of Sexton Advisory Group. 2. You can also co-sign the lease. Another alternative for obtaining a lease with no credit includes getting the co-signer. A co-signer who is qualified, and who should have good to excellent credit will assume the obligation of paying for the lease in the event that you can’t. The co-signer provides a guarantee to the lender that the loan will be paid in spite of your payment history -or absence of it. “Having a co-signer with good to excellent credit helps to lower the overall risk since co-signers are accountable for making the lease’s monthly payments in case you aren’t able to,” says Sexton. To increase the chance that this strategy will succeed co-signers should have a minimum credit score of 670 or higher, says Sexton. Remember that not making payments can cause trouble for your co-signer along with yourself. 3. Take over another lease Taking the lease of an old one is one alternative to obtaining an unpaid lease. Instead of going through an individual leasing firm, talk to a leaseholder about . Although the car company conducts a credit check and lenders will be more willing to collaborate with you as taking over a lease generally occurs when the other person is at risk of being in default. “Taking over a car lease also increases your chances of leasing a vehicle without credit since it also helps to minimize the risk to the lender,” says Sexton. “There’s also the chance that you might end up saving money on car leases over the long term by taking this method because when you buy a car lease from another leasee, you may potentially benefit from what they’ve already financed on the vehicle.” There may also be incentives offered which are intended to make the process of taking over a lease more attractive such as having transfer costs paid. In the end, even without credit history, it’s still possible to lease a car. Be sure to boost the chances of being approved prior to making a trip towards the dealership. You can improve your odds of being approved for a lease through saving an additional down payment, finding an individual with a good credit history who would be willing to co-signer, or taking over the lease of a friend or relative. If none of these approaches are working, you can begin to build your credit history and reapplying at a future date. Find out more
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Writer: Cheryl Knight
The edit was done by Rhys Subitch Edited by Auto loans editor
Rhys has been writing and editing for Bankrate since late 2021. They are passionate about helping readers gain the confidence to control their finances by providing clear, well-researched information that break down complex topics into manageable bites.
Auto loans editor
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