When it comes to getting a new car in Ontario, whether it’s a vehicle you need or a vehicle you want, we understand that it’s not always as easy as you hoped it would be. There are countless factors that can and will affect your ability to get the financing you need to purchase a new vehicle. But, more often than not, the most common and frequently the most difficult to deal with factor is credit. This is why leasing a car when you have bad credit is a great option.
Are you currently deciding between leasing and buying? Check out this article.
If you have bad credit, you currently live in Ontario, and you’re looking to get a new car, you may want to consider leasing as an alternative to owning. Let’s take a look at how those who are struggling with bad credit can use leasing as a way to get the best vehicle for their lifestyle and their budget.
The Benefits of Leasing Your Next Car
Often consumers do not even consider leasing as an option, but for those with poor credit, it can be a great way to avoid long term loans with high-interest rates. Here are a few of the advantages that anyone can benefit from when they choose to lease their next vehicle.
- Lower monthly payments. When you lease a car you’re simply renting it from the dealership, not purchasing it. This means you don’t need a loan to lease a car and you won’t be tied into a long contract.
- Much smaller down payment. When you lease a car, you’re down payment will typically be lower than if you were to purchase a car and often times you might find a deal where you won’t need to have a down payment.
- Less maintenance. When you leasing a car it’s typically covered under the manufacturer’s warranty. This means you most likely will not have to cover the cost of maintenance or repairs.
- Credit improvement possibilities. If you can find a dealership that reports lease payments to a credit agency, then leasing a car can help you improve your credit score and also help you purchase a car in the future if that’s your plan. Keep in mind that you’ll have to make all your payments on time to see any amount of improvement.
Check out this video and learn more about your credit score and how it’s calculated.
How to Get Approved for a Lease When You Have Bad Credit
Unfortunately, bad credit can often make many financial decisions or issues all the more difficult. But just because something might be more difficult, doesn’t mean it’s impossible. To help you be as prepared as possible and hopefully help you get approved for the lease you want, here are a few tips to keep in mind when applying for bad credit car leasing in Ontario.
Try to be Realistic
We understand that you might already have your heart set on a specific car, but our number one piece of advice is to choose a realistic and affordable car even if you have the income to afford a more expensive one.
If you’re more cautious about the car you choose, you’ll benefit in two ways. First, your chances of getting approved will likely increase. If your credit is less than great and you apply to lease an expensive car, the dealership may think that you’re irresponsible with your finances and could reject you if they think you’re too risky of a leasee. Second, your payments will be lower and therefore you’ll have more money to put toward other important issues like debt repayment or savings.
There are car leasers in Ontario that will work with individuals that have bad credit, but you need to be realistic about the situation you’re in. Make responsible choices and you should be able to get the car you want and need.
Important Changes to Ontario Car Insurance Policies, read here.
Weigh Your Options
No matter who you are or what type of credit you have, it’s always in your best interest to shop around and weigh your options. We understand that this may be difficult if you have bad credit as you’ll likely want to accept the first dealership that approves you. But, if you can, look around and get a few other quotes before you sign any contracts. You’ll likely find a better deal or be able to use a quote to negotiate a better deal with another dealership.
Keep Track of Your Credit
When you apply for a lease, most dealerships will perform a credit check. To make sure that you know what’s going on, you should also be keeping track of your credit report and score. This way, you’ll know exactly what to expect when you meet with your potential leaser.
Learn how to read your credit report here.
Consider a Lease Takeover
If you’ve already been rejected for a lease, you may want to consider a lease takeover. This is when you take over someone’s lease who no longer wants it or who can no longer afford to make the payments. Lease takeovers are often easier to get approved for so they are a great option for those with bad credit.
Make a Larger Down Payment
While a more affordable down payment is definitely one of the benefits of a lease, if you have bad credit and are having difficulty getting approved for a lease, you could offer to make a larger down payment. You could also offer to prepay a few payments; some dealers may be more willing to approve you.
Consider a Co-signer
Asking a friend, family member, or significant other to co-sign your lease can improve your chances of getting approved. Just keep in mind that your co-signer will be responsible for your lease payments if you are unable to make them. It’s in your best interest to choose someone who you are very close with and who you can be completely honest with just in case you need help making a payment one month.
Provide Proof of Income
You may want to ask your dealership if proving proof of income could help you get approved. Someone people may have bad credit because of past financial mistakes, but currently, make enough money to afford a lease. Proof of income will show your potential leaser that you are able to afford your current bills and take on the financial responsibility of a lease.
Looking for a Bad Credit Car Lease in Ontario?
If you live in Ontario and want more information on bad credit car leasing, get in contact with us today. We can set you up with a dealership that specializes in bad credit leasing or answer any questions you may have about vehicle leasing or financing in your area.
