Can You Lease a Car With Bad Credit?
Can you lease a car with bad credit? Here is the short answer. 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, the average credit score of people leasing new vehicles was 752 in late 2024. 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.
Key Takeaways
- No fixed minimum: each lender sets its own tiers.
- Advertised lease deals usually require top-tier credit, often around 700–750+.
- Bad credit costs more: higher money factor, security deposits or more money down.
- Best workarounds: co-signer, less expensive model, lease takeover, or buying used instead.
- Money factor to APR: multiply by 2,400 (0.0025 ≈ 6% APR).
How Credit Affects a Car Lease
Leasing companies take on more risk than lenders because 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.
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.
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.
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
Sometimes. It is harder than buying, and you may face a higher money factor, a security deposit or a larger down payment. A co-signer can help.
There is no official minimum. The best advertised lease deals typically require strong credit, often around 700 to 750 or higher, and Experian reported an average score of 752 among new-car lessees in late 2024.
Buying a reliable, affordable used car is often cheaper and easier to get approved for than leasing with bad credit.
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.
