Tips for Leasing a Car with Bad Credit

If you are looking at leasing a car with bad credit history, you will find that your options are limited but there are some issues to consider.

Firstly, it's important to remember that your car lease deal will depend on a credit check being carried out to meet the car leasing firm’s criteria.

If you are credit-worthy, you will be sent an agreement for you to check and sign

However, if you have bad credit, you won’t be sent an agreement but there are a few things you can do to make leasing a car more feasible.

What is car leasing?

Leasing a car is an agreement between you and the leasing company whereby you pay a monthly sum to use the vehicle for an agreed period, typically two to four years. With MegaLease, our great car leasing deals start at just 18 months.

At the end of the lease, you simply hand the car back to us or sign up for a new vehicle.

For many people, leasing a car is a great way to drive a brand-new car without the need for a large upfront payment, and you can also take advantage of lower monthly payments than if you were to buy the car outright.

However, you do not own the car - and there is no option to buy it when the lease ends.

Why won't car leasing companies consider customers with bad credit?

Car Leasing traditionally requires the individual or the business making an application to have a good credit history.

This is to meet lending requirements - the car leasing company needs to be reassured that you can afford the monthly payments on the leased car deal.

For anyone leasing a car, they must have a credit check – that is a rule of the Financial Conduct Authority (FCA). It is to protect the applicant and the car leasing firm and the credit score will dictate whether you can lease a car.

This isn't a decision about you - it's all about your creditworthiness to lease a vehicle and be able to pay the monthly payment.

What is my credit score?

Your credit score is basically a report card on how well you've managed your money in the past. If you've been skipping payments or racking up debt, that will bring your score down.

But if you've been paying your bills and staying out of debt, your score will be good. Different companies have different ways of scoring your credit, and you'll need a good credit score to lease a car.

What will car leasing companies look for?

When it comes to assessing your credit history, car leasing companies in the UK will be looking for things like:

  • CCJs
  • Not being on the electoral roll
  • IVAs and CVAs
  • Defaults
  • Lack of prior finance history
  • Bankruptcy
  • Trust deeds.

Most of these issues will be a 'red flag' from any car leasing applicant.

Can you lease a car with bad credit?

If you want to lease with bad credit, leasing a car with most leasing companies may seem out of reach.

However, there are a few things you can do to increase your chances of being approved for a lease. Here are some tips for leasing a car with bad credit:

  • Get a guarantor: A guarantor is someone with good credit who can co-sign your lease. Some car leasing firms in the UK will be happy to deal with someone with a poor credit history - if they have someone who has a good credit report sign the agreement on their behalf. Be aware that the co-signer, or guarantor, will be liable for any payments that you do not make.
  • Find a specialist leasing company: There are poor credit car leasing companies happy to deal with someone who has a bad credit history - but you will, inevitably, have to pay more for these deals. These companies may be willing to approve you for a lease even if your credit score is low.
  • Lease a cheaper model: Some car leasing companies might be willing to approve leases on cheaper cars, so if you're set on a luxury car or something with a high price tag, your chances of being approved are lower. Try to be realistic about what you can afford and focus on a car within your budget, no matter how much you love the car!

Consider increasing your chances of being approved

There are a few things you can do to increase your chances of being approved for a lease, even if you have bad credit.

First, make sure you have a steady income and make a good initial payment. This can be one month's payment and up to 12 months.

Work on improving your credit score. This will give you more options and better terms when it comes to leasing contracts.

Consider looking into alternative lenders who may be more willing to work with you.

Why lease a car with MegaLease?

If you do have a good credit history, then consider leasing a brand-new car with MegaLease. That’s because:

  • We offer some of the UK's most competitive car leasing deals
  • We have a wide range of vehicles available from leading manufacturers
  • We can deliver your new car to anywhere in the mainland UK
  • We offer a 14-day money-back guarantee on all our leases
  • We have a dedicated UK-based customer service team.

At MegaLease, we understand that not everyone has a perfect credit history, which is why we work with a range of lenders to give you the best possible chance of securing a lease.

For more information about leasing a car with bad credit, please don't hesitate to get in touch with our friendly team.

Check out some of our great car leasing deals and flexible terms for meeting your needs. Whether you need a stylish saloon for business reasons, or a spacious seven-seater for the school run, we can meet your needs.