How to lease a car with no credit history
Key takeaways
- Even with less than ideal credit, there are options that can allow you to lease a vehicle.
- Applicants with poor credit may be required to provide more money upfront in order to lease a vehicle.
- Applying with a cosigner can increase your odds of getting approved for a vehicle lease.
- Taking over someone else’s vehicle lease can also be a manageable approach for applicants with poor credit.
Having bad credit or no credit at all can present a major obstacle to leasing a vehicle. But there are other options for you to get behind the wheel of a new car — even with less than perfect credit history. You can get back on the road by agreeing to a larger down payment, getting a co-signer or taking over another lease.
How does credit affect leasing?
While no or low credit score may not prevent you from leasing, it could require a larger down payment or higher monthly payments. The higher monthly payment is mainly due to the higher interest rates that lessees with a lower credit score qualify for.
The average credit score of drivers leasing a new vehicle was 752 in the third quarter of 2024. That’s a two-point increase from the second quarter of 2023, according to data from Experian. This score falls under FICO’s prime category — ranging from 661 to 780.
Can you lease a car with bad credit?
Yes, but you should expect to pay a higher interest rate, or money factor, than someone with good credit. You can calculate your lease costs before you start shopping to get an idea of what you will pay each month and overall. That said, dealerships may factor in more than just your credit score, including your employment history and debt obligations, when you apply for a lease.
How to get a lease with no credit
If you are just starting out and don’t have a credit history, there are some options to help you get a lease on a car. In addition, once you do get a lease, the payments help you establish credit. The next time you lease, you may get a better interest rate and lower payments.
Pay more upfront
In addition to reducing the overall cost of the lease over its term, and thus your monthly payments, the willingness to pay extra on a down payment could make it easier to qualify for the car lease.
“Without any credit history, you should expect to pay a bigger down payment and a higher interest rate than average as your lease will be considered to be higher risk,” says Steve Sexton, financial consultant and CEO of Sexton Advisory Group.
Get a cosigner
Another option for getting a lease with no credit includes getting a cosigner. A qualified cosigner, who must have good to excellent credit, takes on the responsibility of paying the lease if you can’t. The addition of a cosigner gives assurance to the lender that the loan will be paid regardless of your payment history — or lack thereof. This means you may qualify for a lower auto loan interest rate on your lease than you would on your own.
“Having a cosigner with good to excellent credit helps to minimize the overall risk as the cosigner is responsible for fulfilling the monthly lease payments if you can’t,” says Sexton.
To increase the chances that this approach will work, the cosigner should have a minimum credit score of 670 or better, says Sexton. Keep in mind that skipping payments can cause trouble for your cosigner along with yourself.
Take over another lease
Taking over an existing lease is one final way to get a lease with no credit. Instead of going through the leasing company directly, you approach a leaseholder about taking over their lease. While the car company still does a credit check, lenders are more willing to work with you since taking over a lease usually occurs when the other person is in danger of default.
“Taking over a car lease also increases your chances of leasing a car with no credit as it also helps to minimize risk for the lender,” says Sexton. “There’s also a chance you might end up saving money on a car lease in the long run via this route because when you take over a car lease from another lessee, you can potentially benefit from what they’ve already put down on the car.”
There may also be incentives offered that are designed to make taking over a lease more appealing, including having transfer fees covered.
Bottom line
Even with no credit history, it is still possible to lease a car. Take the time to improve your odds of approval before heading to the dealer. You can increase your chances of getting approved for a lease by saving a larger down payment, finding someone who has a well-established credit history who is willing to be a co-signer, or taking over someone else’s lease.
If none of these options do the trick, work on building your credit history and reapplying at a future date. You may also want to consider a bad credit loan to fund a cheaper car while you improve your score.
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