Can You Lease a Car With Bad Credit? Scores, Costs and Workarounds
Yes, you can sometimes lease a car with bad credit, but it is harder than buying and usually costs more. There is no official minimum credit score for a lease, yet leasing companies reserve their best deals for strong credit: according to Experian, people leasing new vehicles had an average credit score of 751 in the second quarter of 2026, and the average new lease payment was about $617 a month. With lower scores, expect a higher money factor (interest), a larger security deposit or down payment, or a denial. A co-signer, a cheaper car, a lease takeover, or improving your credit first can help.
How Credit Affects a Car Lease
Leasing companies take on more risk than lenders because, as explained in our guide to how a car lease works, they own the car and depend on you to return it in good condition at the right value. Most sort applicants into credit tiers. The ranges below are typical; each lender uses its own cutoffs.
| Approximate score | Typical tier | What to expect |
|---|---|---|
| About 720–750+ | Top tier | Best money factors, advertised deals, little or no security deposit |
| About 680–719 | Good | Approval likely; slightly higher money factor |
| About 620–679 | Near prime | Possible approval; higher money factor and a security deposit are common |
| Below about 620 | Subprime | Many captive lenders decline; approval may require a co-signer or large deposit |
Why Leasing With Bad Credit Is Expensive
- Higher money factor: the lease “interest” rises with risk. Multiply the money factor by 2,400 to compare it with an APR.
- Security deposit: lenders may ask for one or more months of payments upfront.
- More due at signing: larger down payments (cap cost reductions) lower the payment but are lost if the car is totaled.
- Fewer choices: some manufacturers’ special lease offers are limited to top-tier credit.
What a Lease Payment Looks Like With Bad Credit
Here is how the money factor alone changes the payment on a $30,000 car leased for 36 months with a 58% residual value ($17,400), before taxes and fees. The depreciation part of the payment stays the same, about $350 a month; only the finance charge rises with risk.
| Credit tier (example) | Money factor | About equal to APR | Monthly payment |
|---|---|---|---|
| Top tier | 0.0025 | 6% | About $469 |
| Near prime | 0.0050 | 12% | About $587 |
| Subprime | 0.0070 | 16.8% | About $682 |
In this example, weaker credit adds over $200 a month, or more than $7,500 over three years, for the same car. A security deposit or a co-signer can sometimes earn a lower money factor, so ask the dealer to quote both.
7 Ways to Lease a Car With Bad Credit
- Check your credit reports: dispute errors and know your score before you shop.
- Add a co-signer: someone with strong credit who agrees to be responsible for payments.
- Choose a less expensive vehicle: a lower monthly payment is easier to approve.
- Offer a larger security deposit: it reduces the lender’s risk and is usually refundable at lease end if terms are met.
- Show stable income: bring recent pay stubs and proof of residence.
- Consider a lease takeover: taking over someone’s existing lease still requires approval from the leasing company, but the terms and remaining months may be more manageable.
- Shop multiple sources: different dealers and brands’ finance arms use different credit standards.
Can You Lease a Car With a 500 Credit Score?
It is unlikely through an automaker’s own finance company. Scores in the 500s usually fall below the lowest lease tier, so most applications are declined unless you bring a co-signer with strong credit or a large security deposit. A handful of independent and subprime leasing companies work with low scores, but their money factors and fees can be steep. If you are in the 500s, a modest used-car loan, or a few months spent raising your score above about 620, usually costs much less.
Leasing After Bankruptcy or a Repossession
Both make leasing harder for a while. Many leasing companies want to see the bankruptcy discharged and some time pass, often at least a year of on-time payments on other accounts, before they approve a lease. A recent repossession is one of the biggest red flags for a leasing company, since the lender owns the car. In either case, a co-signer, a larger deposit, or rebuilding credit with a smaller loan first gives you better odds.
Lease vs Buy With Bad Credit
| Leasing with bad credit | Buying with bad credit | |
|---|---|---|
| Approval | Often harder | More lenders, including subprime options |
| Cost | Higher money factor, deposits | Higher APR |
| Ownership | None; return the car | You build equity over time |
| Mileage limits | Yes, with fees for extra miles | No |
| Flexibility | Costly to end early | Can sell or trade anytime |
For many people with bad credit, buying a reliable, less expensive used car with a shorter loan is cheaper overall than leasing; our guide on how to buy a used car covers what to check. For the general trade-offs beyond credit, see our full comparison of leasing vs buying a car.
Safety note: Avoid “guaranteed approval” lease offers with vague terms. Before signing, confirm the money factor, capitalized cost, residual value, mileage limit, all fees, and what you owe if you end the lease early.
Improve Your Chances in a Few Months
- Pay every bill on time; payment history matters most.
- Pay down credit card balances to lower your credit utilization.
- Avoid opening new accounts right before applying.
- Consider a secured card or credit-builder loan if you have a thin file.
- On-time lease payments are typically reported to the credit bureaus and can help rebuild your credit.
Try the calculator: use our lease vs buy calculator to compare leasing and buying.
Bad Credit Lease FAQ
Yes. A co-signer with strong credit can improve approval odds and terms, but they are legally responsible if you do not pay.
It is the lease’s interest charge expressed as a decimal. Multiply it by 2,400 to get an approximate APR.
Usually yes. Most leasing companies report payments to the credit bureaus, so on-time payments can improve your credit.
You still need approval from the leasing company, but some lease transfers may be easier to qualify for than a new lease.
There is no set minimum, but many leasing companies decline scores below about 620 without a co-signer or deposit. Scores of 680 and up qualify much more easily, and the best advertised deals usually go to 720 or higher.
Sometimes, if your income is stable and you can offer a larger security deposit or choose a less expensive car. Expect a higher money factor, and compare the total cost with buying a used car.
