If you live in the United States, chances are you need a vehicle to get around. But, you can have a hard time leasing or purchasing a car if you’ve got bad credit. Almost every individual knows that if they have bad credit, they can simply apply for a Las Vegas credit repair. However, for those who don’t know, there are ways to lease a car with bad credit.
What Type of Credit is Needed for a Lease?
You’ve got to have excellent credit if you want to qualify for a lease. If you have a credit score of 599 to 699, you are considered subprime. You will be considered super subprime if your score is below 599. With subprime credit, you can still qualify for a lease. However, you’ll be needed to put more down payments and make higher payments compared to a person with excellent credit.
You can potentially take over the lease of another person if you’ve got bad credit. This is also known as a lease transfer or lease assumption. You simply take over the lease payments and the car from a person who wants out of the lease. You’ll still have to qualify. However, the criteria for the credit is not that great compared to the criteria for a new lease.
It’s a Bad Idea to Lease When…
You are not establishing any equity in it because you are simply doing a long-term rental on the vehicle. Though purchasing a vehicle is always a losing scheme, at least you’ve got something worth some money when you’re done making payments.
Mileage limitations are another issue with leasing. On a car, an average driver puts 12,000 miles every year. Usually, a lease comes with a limitation of 9,000 up to 12,000 miles per year. You will be paying more for the lease if you cannot keep it under the limit. At the end of the lease, you can also be paying a penalty.
Also, you’ve got to maintain the vehicle. Dealers want you to return the vehicle in excellent shape. You’ll be paying extra fees if the vehicle shows additional wear and tear.
It’s a Great Idea to Lease When…
Essentially, leasing a vehicle is paying rent on a vehicle instead of purchasing. You never really own the vehicle. However, you’re making payments every month on the car’s depreciation over the life of the lease. You don’t own anything when the lease is done. But, leasing lets you get the most out of your money. For instance, you have only made payments on the $8000 depreciation if you rent a vehicle for $20,000 for three years and at the end of the 3 years, the value of the vehicle is $12,000. You will be making payments on the entire $20,000 if you bought the vehicle.
Furthermore, you do not have to put money down on a lease. On the other hand, it pays to put down 10 up to 20% if you are going to purchase a vehicle.