Can I Lease a Car With Bad Credit in Canada?
Can I Lease a Car With Bad Credit in Canada?
Posted on May 7, 2022
While we mainly discuss auto loans on this blog, we lease cars too. As we are receiving more inquiries around whether you can lease a car with bad credit, we thought now is a good time to write a blog post on the subject.
That’s exactly what our Waterloo auto loan team has done.
Can you Lease A Car with Bad Credit?
Leasing a car with bad credit is exactly the same as buying one with a bad credit auto loan. It may be expensive, not all companies will offer the products you need and you will have to prove you can afford it.
It is still possible though.
There are leasing companies out there willing to work with those with bad credit like there are lenders. You just need to find one and find a deal you can afford.
You can use the same tactics to get a better lease deal that we recommend for getting a great auto loan deal.
Higher down payment
Leases include an upfront payment like auto loans have the down payment. If you can put more up front, you stand a higher chance of securing a lease or getting a better rate.
The down payment insulates the company better from loss, which should reduce the interest rate they charge.
Improve your credit score
While improving your credit score may take time you don’t have, it’s a viable way of lowering the cost of your lease and improving your chances of getting one.
There is no ‘perfect’ credit score but higher is always better. That could mean creating a positive payment history, paying down existing debt or something else. It takes time and will require effort but it’s something well worth doing.
You would benefit most doing it before the lease but you would still benefit by doing it during the lease too. Then it’s ready for next time.
Use a cosigner
You can use a cosigner on a car lease in the same way you can a car loan. If you know someone with a good credit score and who trusts you enough to come in to guarantee the lease, this is another way to get a lease at a relatively low rate.
The same rules apply as with a car loan. The cosigner will need to have a good credit score, be able to repay the lease if you cannot and be able to pass the same checks you would to secure the lease.
Leasing and bad credit
If you want to lease instead of buy, using a formal lease agreement instead of a ‘buy here pay here’ arrangement has one key advantage. Paying the lease in full each and every month will help you rebuild credit. It can contribute towards that positive payment history and help improve your credit score.
All while letting you drive the car you want for less.
Our team has access to a range of options to buy or lease and would be only too happy to help.
When you’re ready for a car lease or loan, get in touch with the Waterloo auto loan experts at Northway Ford for great deals on auto finance.
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