Regardless of the reason that you have bad credit, you are looking now at bad credit car leasing. It is understandable that you would look at this option, as leasing means lower car payments, right?
Depending on exactly how bad your credit rating is, you most likely will not be able to qualify for a lease unless you are able to demonstrate some level of financial stability. Leasing companies and lenders that offer leases have very strict credit standards that they look for in an applicant.
It is more difficult to obtain a lease with bad credit, than it is to obtain a bad credit car loan. However, once you understand leases, it’s a blessing in disguise.
Leases are not for everyone. Even people with good credit, should seriously consider the pros and cons of leasing vs buying a car. Dealerships promote leasing like it’s the best thing since air conditioning.
When you lease a car, you aren’t paying nearly as much toward the principle amount of the car, as when you are purchasing. Most of your monthly payment goes toward interest. There is also sales tax on your monthly payments. So, a good deal of your monthly payment is going more for a rental, in a sense, than for the actual car.
In the end, this means that when it comes time to trade, you owe more on a leased vehicle than you would have, if you had financed it.