Can you lease a car if you have bad credit?

Leasing a car can give you more flexibility than buying. But if you have bad credit, the process can be harder. You may still qualify for a car lease, but it could mean making a higher deposit or paying more each month.

Car leasing with bad credit history isn’t impossible. But it may take more work to get the lease you want. Learn more about how leasing a car with bad credit works—and some tips that could help you improve your credit scores.

What you’ll learn:

• Leasing a car with bad credit is possible, but it may be harder to qualify for the best terms.

• You might face higher up-front costs, interest rates or monthly payments.

• A co-signer or a larger down payment can help improve your chances of approval.

• If you’re having trouble qualifying for a lease, you can consider alternatives, such as a lease transfer or improving your credit.

You don’t need a specific credit score to qualify for a car lease. That’s because the minimum credit score needed to lease a car varies by dealership. According to Experian®:

• Customers leasing new vehicles in 2024 had an average VantageScore® credit score of 755.

• Almost 14% of new car leases were to borrowers with credit scores from 501 to 660.

That said, many dealerships look at industry-specific FICO® Auto Scores when considering auto financing applications. Unlike traditional credit scores, FICO® Auto Scores range from 250 to 900 and give dealerships “a further-refined credit risk assessment” that’s specifically tailored to auto loans and leases.

Your credit scores play a big role when you’re looking to lease. Your scores give the dealership an idea of how risky lending you a vehicle might be.

Generally speaking, the higher your credit scores, the less risky it is lending to you. That’s because good credit scores indicate you have a history of using credit responsibly and repaying your loans on time. Lower credit scores, on the other hand, could signal you’re a risky borrower. And that could make it harder to qualify for a lease.

Having bad credit could mean fewer vehicles are available for you to choose from. And if you qualify for a lease:

• The dealer might require a bigger security deposit or down payment.

• You may be charged a higher interest rate—sometimes referred to as the money factor or lease factor.

Many dealerships and leasing companies report your lease payments to the three major credit bureaus—Experian®, Equifax® and TransUnion®. Making on-time payments can help strengthen your credit history and improve your credit scores. 

A positive payment history can also stay on your credit reports for up to 10 years, which may help you qualify for better terms in the future.

Here are a few options you can consider to improve your chances of qualifying for a car lease if you have bad credit:

• Put more money down. Lowering your loan amount with a larger down payment may make you seem less risky to lenders.

• Trade in a vehicle. Trading in a vehicle with positive equity is like putting more money down.

• Use a co-signer. Having someone with a higher credit score co-sign your lease can increase your odds of approval or help you qualify for better lease terms, like a lower interest rate.

• Consider a more affordable car. Choosing a less expensive car might mean a lower lease payment, which may be easier to qualify for. You may also be able to find a dealership that leases used vehicles.

If bad credit is preventing you from qualifying for a lease, there are other paths to explore, like:

• A lease transfer. In a lease transfer, someone else transfers their lease to you. These may have shorter terms and lower up-front costs. Not all leasing companies allow this, so check first.

• Loan application. Buying a car with a loan may be another option. While payments can be higher, you might have more choices. Use a payment calculator to estimate what fits your budget.

• In-house leasing programs. Some dealerships offer in-house financing for people with bad credit. These might include longer terms or trade-in offers. But these types of “buy here, pay here” programs may have higher price tags and monthly payments. Research the dealer before considering one of these options.

Keep in mind that these options may have credit requirements of their own.

Improving your credit scores could make leasing a car easier. And the better your credit scores, the better your lease terms might be. Here are a few tips to consider from the Consumer Financial Protection Bureau (CFPB) that could help you improve your credit scores:

• Always pay your bills on time.

• Keep your balances low by staying well below your credit limits.

• Pay your credit card balances in full.

• Only apply for the credit you need to avoid multiple hard inquiries.

• Keep older accounts open to build a long credit history.

Leasing a car with bad credit is possible. But the lower your credit scores, the trickier qualifying for a lease might be. Taking steps to improve your credit first could make qualifying for a lease or getting more favorable terms easier.

As you build credit, you can track your progress with CreditWise from Capital One. It’s free and available to everyone—not just Capital One customers. And using it won’t affect your credit scores. You can also visit AnnualCreditReport.com to get free copies of your credit reports.