Hiring a car has become a necessity more than an option today. In many countries hiring a car is the only way you can add mobility to your trip or everyday life. Vacationers and business travellers also rely on car rental services for transportation from the airport to the desired destination and back.
With more people considering hiring a car rather than buying, the car rental companies have started providing attractive offers that tempt more people to hire cars. In fact, car hiring is not only for vacationers or business travellers; there are many more reasons why you would want to hire a car.
What would you do if your car has gone to the repair shop? Whether it is about dropping your kids to school or driving to the workplace, cars have become a necessity of our day-to-day life and we can’t do without it. Hiring or leasing a car can be a solution to keep up with your regular duties.
All of us love watching movies, especially those with happy endings where both the lovers get married and ride off in a luxury car. Have you ever thought if you could do the same on your wedding? Yes it is very much possible. Just hire a luxury car or any car of your choice and end your wedding with a bang! Want more reasons? Think of your first date! The first impression absolutely matters. While hiring a luxury car can give out wrong messages about your financial status, you can hire a nice and clean car to make a solid impression. Not just for wedding or a date, car rental services can help in shifting your belongings to a new location, move a large group of people together or make your road trip memorable.
Various packages are available with the car rental agencies to suit all kinds of budget, time periods and travelling requirements, so you can choose one according to your needs. Shop around and find a good car rental company which offers affordable rates and great services. Whether you hire a car for short term or long term, the dealer would look at your credit scores to decide whether to offer you a deal or not. If you have bad credit the dealer might turn down your application, to avoid risks. Bad credit depicts you as a bad payer or defaulter, so the risks of offering car hire or lease to people with bad credit are many.
So what would you do if you have bad credit? Can you lease a car if you have bad credit or even that won’t be possible? We will get into the details in the following sections.
Can you Lease a Car if You have Bad Credit?
If you still don’t own a car, it is quite possible that you are thinking of buying one soon. Buying a new car can be quite expensive and in most cases, people need an auto loan to buy a dream car. But what is you have bad credit? Getting any kind of auto financing is very difficult for people having bad credit, so would you wait for years to rebuild your credit scores to buy a car? Or do you have any other options? Many people would tell you that leasing a car with bad credit is also not possible, but that far from truth!
There’s good news for people having bad credit. You can find options for leasing a car without having to pass stringent credit checks. If you strongly feel that car leasing is suitable for you with your current financial condition, then there are companies who would provide you with options of leasing a car even if you have bad credit. The obvious question that comes up after you know this is: What credit score will make you eligible for leasing a car?
There is no certain answer for this, while some companies would ask for a score of 620 and above, some others can consider something below it. This would depend on the car rental company you choose. So shop around and check the credit requirements with companies that offer car leasing for people with bad credits.
While it is good to know that you can lease a car even if you don’t have excellent credit scores, you need to consider some things before leasing a car with bad credit. Things would be different for you to some extent, so it is good to be prepared.
Keep Your Expectations Grounded: In normal situations, if you consider leasing or financing you favourite car, you’ll have to pay huge down payments, bear high interest rates and pay high security deposits. But if you have a poor credit and still want to lease a car, you’ll have to compromise with your choice. You can even have problems while getting insurance, so be prepared to compromise.
Wait a Few Months before Buying a Car: If you have bad credit history, it is wise to wait for some time before buying a car. This will save you from paying high interests and help in saving money along with enjoying low credit scores. Start by making an estimate of how much can you afford and how much can you pay monthly. Knowing this you can save some money every month and make timely payments so that your credit score starts building up. Within a few months your credit score will improve and you will be eligible to get good interest rates. Till then you can consider leasing a car.
Limit the Number of Credit Investigations: If you already have a bad credit score, each time you ask for credit score or credit report, it further lowers your FICO. A good way to limit this adverse effect is to take a printout of the credit score report provided by the credit bureau and hand it to the car leasing agencies or dealers you are considering. They can evaluate whether you qualify or not based on this report.
Lease Takeovers are Great Options: Lease takeovers can be a great option for people who want to lease cars with bad credit. Many times it so happens that people get car leasing contracts and find themselves in a situation where they are no more in a condition to make the payments. In such cases, you can take over the lease at affordable rates and enjoy a car ride. Remember, the leasing company with whom you wish to take over the lease, will check your credit scores but the approval standards are not that stringent. You can check online sites dealing with car rental companies to find such deals.
You can improve your credit scores with time but you have to be patient. Research on ways you can achieve this goal or discuss with an expert. This does not mean you’ll have to do without a car all this time. Find a good car rental company that allows car leasing with bad credit and carry on your daily chores.
There are definitely some advantages of leasing a car over buying and this is the reason why people opt for leasing over buying a car. The benefits of leasing a car would be discussed in the next section. So carry on reading.
Benefits of Car Leasing
Owning a car might seem beneficial emotionally and financially, but leasing a car when you have bad credit can prove advantageous in many cases. So if you are disheartened because you are not able to buy a car of your choice, here are a few reasons to lease a car that might light up your mood to some extent:
You can lease a car of your choice with the advanced technology and safety features. You can drive around safely and comfortably and feel proud as if it is your own car.
The car that you lease comes with warranty so you don’t have to bother about major repairing and maintenance charges. On the other hand if you owned the car you had to take care of all these. SO leasing seems to be a better option than purchasing, isn’t it?
Still feeling low? There’s more good news. The monthly payments for leasing a car are much less than the monthly loan payments if you were to purchase a car with help of an auto loan. So if you are able to ride your favourite vehicle at half the expense that should lighten you up!
Each time you make the payments to the dealer or leasing company your credit improves, which means you go one step ahead to buy a car of your choice. Since the monthly payments are reasonable and affordable it is quite easy to make on-time payments.
The chances of turning in or buying the car increases after the lease period ends. So you have the benefits of both the worlds, what more can you ask for?
Even if your credit score is not that bad, you can choose to lease a car to save money. Once you have enough money in hand, you can make a decent down payment and get good interest rates. So whatever the situation is, leasing a car seems to be a great option!
How to Lease a Car with Bad Credit
People having low credit scores or bad credit histories have to face frustrating situations quite often, when they are up to buy or lease a car. The car commercials might give an impression that it takes nothing to buy a car – just walk in and drive out with your favourite car but the actual catch appears in the fine prints below the TV screen in form of “Conditions Apply or Subject to Credit Approval.”
The scenarios have become even tougher since the finance companies and banks have tightened the criteria and are unwilling to work with borrowers having poor credit scores. This has made auto loan approval and leasing tougher than ever. But the good news is there are some dealers and car manufactures that are willing to take up risks in order to maximize their revenues. So you can approach them and see whether you have any luck.
Low credit scores mean you have to pay higher interests, higher down payments and high security deposits if you choose to lease. Getting car insurance can also become very difficult. Being unable to make payments on time will further lower the credit scores, so it is a good idea to check your credit report regularly and rectify mistakes.
In the following section, we discussed a few strategies which will help you improve your situation and make you eligible leasing a car.
Start with Analyzing Your Credit Rating and Scores
Just knowing that you have bad credit is not enough. It is important to analyze, why you have got bad credit scores. People have varying degrees of bad credit, where do you fall? Home foreclosures or bankruptcies mean there is serious credit crisis but not being able to pay a few payments on time might not have adverse effects like the previous ones. You can repair some problems quickly, while others would take more time.
When you apply for a car loan or car leasing, you’ll be asked to provide credit reports obtained from any one of the three main credit agencies – Experian, Equifax and TransUnion. Since the dealers and finance companies get hundreds of such applications every day, they only see the credit scores and decide whether you are eligible or not. So it is essential that you know where you stand before filing the application.
Each one of you is entitled to get a free yearly credit report from one of the above mentioned credit bureaus, so get one analyze thoroughly. Take note of the late payments, missed payments, bankruptcies, etc and determine why it all happened. If you have a score above 680 or 700 you’ll be considered ‘prime’ and most banks and financial companies would be willing to work with you. Anything below 640 or 620 will be considered ‘subprime’ and you have to face rejections.
People get confused between credit scores and credit history report – remember they are completely different. Credit report is the detailed report containing all the information (mortgages, insurance, late payments, foreclosures, etc) and credit score is a number that summarizes your credit report.
The credit scores from the credit bureaus might differ slightly or substantially, so it is up to you to determine the faults and get them rectified, so that information are accurate and the credit scores are not affected.
Look for ‘Sub-prime’ Lenders
If you have subprime credit scores, it is best to approach sub-prime lenders rather than conventional lenders or finance companies, since they would ultimately refer your loan request to lenders dealing with subprime loan applications. There are many lenders who offer loans or leasing opportunities to people having low credit scores.
You can do research online or ask other lenders to help you locate such subprime lenders. The loan approval process becomes easier and quicker and you have to face lesser disappointments. One thing should be kept in mind that, you may have to pay higher interest rates than prime borrowers, but if you have no other way out this can be a feasible solution.
Consider Lease Take-Over
A lease take-over, also referred to as lease transfer or lease assumption, is an easy and safe alternative for people with bad credit scores. Many people would be looking for options to get out of their lease terms, due to variable reasons, you can take over their cars and lease payments and use it for yourself.
You may have to go through credit approval process but that is not as strict as in the case of a new lease. The ‘lease sellers’ often make their offers attractive by allowing no down payment for people who wish to drive an almost new car without spending much. Many online companies provide services that help to match sellers with buyers. People with bad credit and very limited cash in hand find this option beneficial. Search for online sites offering information on lease sellers and get hold of a great deal.
What would You do If You Still don’t Get Approved for A Bad Credit Lease or Car Loan?
Some people have credit scores that are so bad that they don’t get approved for subprime leasing or car loans. Typically people having credit scores less than 500 are rejected. So what would you do if your options get narrowed further?
Here are a few options which can help you get out of this situation:
· Save money and buy/lease a starter car (basic car to be more specific) and trade up when your finances and credit scores improve
· Borrow money against home equity or 401K fund (if you have any)
Buy a used car from an individual who is in need of cash, though you have to be very careful
Look for a co-signer and apply for a loan. A co-signer will be responsible to make up if you default.
The best way is to repair or rebuild your credit history. Though it may take quite some time, it will be beneficial in the long term. This will not only help you to get leasing without hassles, you can even apply for a car loan and purchase a car of your own. If you consider this option, here are a few tips how you can improve your credit history:
Don’t give up credit card accounts that you don’t use anymore. The available credit limits can help you improve the scores.
Open a few more credit card accounts at regular intervals and use them occasionally. Make sure you make the payments on time.
A secured credit card is very useful for people having very low credit scores.
These cards are available with all leading banks and financial companies, where you will have to deposit a security amount and the rest is same as a normal credit card. This helps in restoring your credit scores.
Pay bills on time and avoid missed payments. One mistake can have adverse effects.
Filing a bankruptcy means damaging your credit for 10 years – avoid it.
Buying or leasing a car with bad credit may be difficult but not impossible. If you maintain some self-discipline in terms of your finances and are able to shop around to find a good lender offering good rates, you can make the impossible, possible. Make sure that you don’t do things that would further lower the scores, rather take up measures that will help in improving your credit history.
Tips to Hire a car with Bad Credit
There are many people who desperately are in need of car but don’t have enough cash or credit to be able to buy a new car. Buying a car with bad credit is almost impossible in today’s economy and in most cases people with bad credit have their applications rejected since financial companies and banks have strict qualifying guidelines and they put stress on having an excellent credit history. However, there is no reason to feel low. There are many car dealers who offer cars on lease to keep the flow of cash steady.
As mentioned earlier, the best thing about car leasing is that you can drive a car without having to improve the credit score and you have the choice to either give up the lease or buy the car, if your financial condition improves. Whatever you wish to do the ultimately the need of a car has been fulfilled.
The fact that many people live with bad credit in today’s world, makes car leasing a necessity. While you can improve your credit score with help of a few simple steps but that might take years depending on how bad the credit is. It might so happen that you need a car immediately and won’t be able to wait that long. So what would you do in such cases? Feeling lost? Here are some tips that will help you get a car on lease even if you have bad credit.
· Avoid Bad Credit Auto Loans – Think Otherwise: Many people who are in need of a car think that bad credit loans are the only option that is available to have access to a car. Most of these loans are backed by huge down payments and high interest rates, which makes the situation even tougher. Most car dealers will not talk to you about other loan options since they just want their money. If you are not able to pay on time, your credit score will be affected further and in case you default the lender has to suffer. So if you have bad credit, consider leasing a car, so that no one gets into bad situations.
· Leasing Car with Bad Credit for Buying the Car: A car lease is hiring a car for long term and when the lease term ends you return the car back to the dealer. You own the car only for the lease term. Many dealers would give you the option of buying a car after the lease term ends. If you opt to give up the lease, you have to return the car.
· Save Money for Down Payments: While many dealers would offer no deposit car leasing, some others can ask you for down payments. This can be some around 5% to 10% of the cost of the car, so this down payment varies with the type of car you choose. The down payment is used to cover taxes and documentation fees, if any.
· Shop Around and Compare Prices: You can find many car dealers in your locality and it would be a good idea to visit them and talk to them about the car leasing options that they offer. Get quotes in written so that you can compare later to choose the dealers who offers the best prices. You can show this to other dealers and ask them to offer best prices.
· Have Stable Income: If you consider leasing a car it is a good idea to have a stable source of income to support the leasing costs and everyday expenses. In case you fail to make the payments to the dealer, they will take possession of the vehicle. So the dealers will only offer you a car lease if you are able to make monthly payments.
· Stay Current on Lease: Stay current on your lease payments if you want to buy the car later. If you fail to make the payments, the dealer might not be willing to offer you the car for buying.
So if you are in need of a car and have no options to buy one immediately, consider leasing a car. This will save you time and money. You’ll have enough time to repair your credit score so that you become eligible to get a car loan once the lease comes to an end.
Why Hire A Car When You Have Access To Bad Credit Car Loans – Here Is Why You Should!
When people are desperately in need of money, it makes them run from pillar to post looking for options and grab whatever comes their way. Bad credit and same day loans are the easiest option for people who have bad credit, but that might get you into trouble more than doing good. Many of you might think that buying a car with such bad credit loans would be better than leasing a car. But is it really worth it? Resorting to bad credit loans is really a better alternative to leasing or hiring a car? Think again!
It might be tempting to think that you can fulfil your wishes of owning a car with bad credit car loans, but make sure you know everything about it before you sign the papers. Bad credit portrays you as a bad payer or defaulter, which is the reason why banks and lender shy away from offering funding to you.
Many lenders offer loans to people who are unable to obtain funding from other sources. While this might seem easy and convenient to way of getting money, since you do not have to go through rigorous approval process, you should know the cons involved with such loans. Why would someone offer you money when they are at risk of losing it? It is obviously because they see benefit for themselves.
Lenders offering same day or bad credit loan might tell you that these loans help to improve the credit scores quickly. But that is only when you are able to repay the loan on time. In case you fail (which might have happened in the past), the credit scores goes down further.
Here are some reasons why applying for bad credit car loans is not advised:
· Higher Interest Rates: Lenders providing bad credit or fast approval loans will offer higher interest rates than normal loans. The high interest rates will offer security to the lender, since there are many risks involved in offering loans to people with bad credit. The risks will aggravate if they offer you low interest rates.
· Unsecure Providers: bad credit loans do not come with any guarantee, people applying for these loans often fall into traps. This is mostly because they choose the wrong lenders who are ready to rip-off people.
· Loans Not Big Enough: Bad credit loans have strict limits and you will not be able to borrow more than that. The risk of defaulting is more with such loans, so the loan amount is limited. Many times this would not even be enough to buy a car, even the most standard car. So why get into further financial obligations?
· Short Term Loans: Quick loans are available for a shorter term compared to normal loan terms. Since the interest rates are higher, you have to repay the loan quickly to avoid extra services charges from piling up.
After knowing what you can go through by applying for these loan programs, will you be willing to take all these burdens? Or you’d want to take some time to repair your credit and apply for a normal loan and get best rates?
All that said you can’t even let go the need of a car. Hiring or leasing a car with bad credit will be the most feasible solution for you. Not only can you enjoy driving, you have the best car to drive and you don’t even have to bother about the repair and maintenance costs. Many people have resorted to such quick loans and have ended up being nowhere. Hurting the credit scores further would mean it will take longer to repair it. SO now if you can repair it within 2 years, it might take you 5 years to repair it if you take the wrong decision.
It is best to remain safe and save yourself from doldrums. Lease a car and be happy!
Car Hire Options for People with Bad Credit
If you are already in a dilemma of having bad credit, a debit card can be your saviour. Many car rental companies would allow you to use a debit card to hire car. If you choose to swipe your debit card to hire or lease a car, here are some guidelines which will help you make the best deal.
· Compare Price: Hiring with debit card might be difference from using a credit card, so let the representatives know you will be using a debit card. Ask whether there are restrictions if you use a debit card. Car rental policies differ to a great extent with locations and rental companies, so make sure shop around and get quotes, which you can compare later to make the best choice.
· Have Some Cash for the Deposit: Most of the car rental companies would ask for deposit money, which is refundable at the time you return the car. Many people find it difficult to pay this lump sum amount together, so it is a good idea to plan ahead so that you can save the deposit money.
· Have a Debit Card Along with You: Most of the car rental companies will tell you they don’t rent out without a credit card, but your negotiation skills are good, you can press them into accepting a debit card as well.
· Have Documents Ready: You may be required to submit documents for verification. The requirements differ with each company, so call the company with whom you are planning to rent and know what documents you’ll require. Make sure that the details and personal information match with those on the debit card and driver’s license. Discrepancies might prevent you from hiring a car.
Having a bad credit can become a major roadblock with car rentals, so it is wise to check the credit ratings and scores ahead of time to know where you stand. While debit cards can save you from being embarrassed, you should not completely rely on them. Have a plan which will allow you to repair the credit scores, so that next time you are required to show the scores you come out clean.
As we go towards an automated world, individuals are being considered high risk and low risk entities rather than individuals. Therefore it is become more difficult to handle situations which go against us. It is not always that you have to be a careless person to make your credit score go down! Many situations are out of our control that makes us suffer in the present as well as in the future.
Owing to the current economic systems, lending institutions and banks have stricter guidelines and underwriting policies to minimize risks. But this has made the situation tougher for people who have had bad financial experiences in the past. Whether it is about a home loan or car loan, these people have to face disappointments and rejections.
So what would one do if they are desperately in need of a car? Compromise with public transport or wait until they are in a situation to apply for a loan? No there is no need to compromise or wait that long. Car hire with bad credit is the solution for people looking to drive a car when they do not have enough cash in hand to buy a car. Car hiring options for people with low or bad credit allows them to drive a car of their choice at low costs.
Though you don’t own the car once the lease contract or hiring contract gets over, you have the choice to buy the car. Short term car lease is not available with many car dealers, so if you want a car for short term you might consider hiring a car from car rental agencies. If you opt to lease a car, the lease starts at 24 months or more. So in this case you have enough time to repair you credit score by paying bills on time and being disciplined in the way you spend money.
Car leasing can help you improve the scores, since every on-time payment adds up to make the scores better. Repairing the credit will not only help you to get a car of your choice, but will help you in many situations. Most of the financial institutions will look at your credit scores, when you ask for financial support.
Car hiring or leasing with bad credit is a cost-effective alternative to buying a car, so many people who are affluent enough to buy a car take up such options. Lease takeover or lease assumptions are other options that will help you save further. You can take over a lease from someone who is willing to give up the lease mid-term. To attract buyers, the lease sellers offer discounts and ‘no deposit’ options, so this is ideal for people have very poor financial condition.
So no matter what the reason is – whether you are relocated temporarily, your car has gone to the repair shop or whatever, car hiring with bad credit if the most practical solution for those suffering from bad credit scores. Now you can drive your dream car even if you don’t have enough cash in hand. What more do you want!
Author Bio: Vineet Agarwal has been long associated with V1 Technologies which offers world class Website Design, SEO & PPC, Domain & Hosting, Mobile AppDevelopment and other similar services. Aside from being a dynamic entrepreneur, Vineet is an avid traveller and loves exploring new countries and culture. Discount car rentals interest him largely and he has been extensively sharing his knowledge with friends and peers about discount car rentals and mistakes to avoid when hiring cars.