The Scoop on Sign and Drive and Zero Down Lease Deals

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Content Manager

Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

, Content Manager - December 1, 2020

A sign and drive deal is a leasing deal where you’re not expected to put any money down at signing. However, they’re different from zero down lease deals, even though they sound very similar. We explore who typically qualifies for these deals, and car buying options that may be available for bad credit borrowers.

No Money Down Leasing Deals

Some automakers offer lease deals saying you can sign the paperwork and drive away with the vehicle on the same day – without paying a thing! While it may sound too good to be true, these sign and drive deals do exist.

There are also “no money down” lease deals, which is different from a sign and drive deal. With a zero down deal, you’re still expected to pay the acquisition fee and the first month’s payment. With a sign and drive, the first payment and acquisition fee are typically waived.

Both options sound like a great deal, especially if you need another car quickly and don’t have a down payment saved. The unfortunate thing is that bad credit borrowers typically can’t get approved for these lease deals, or leases in general. That’s not to say it’s completely impossible, since every leasing company has different credit score requirements, but your credit score is usually the deciding factor in lease eligibility.

If your credit score is somewhere in the 600s, you may have a chance at a lease, but probably not a sign and drive or $0 down deal. These deals typically have caveats that say “for the most qualified buyers.”

According to Experian’s State of the Automotive Finance Market report, borrowers with credit scores between 601 and 660 make up 14.13% of the leasing market in the second quarter of 2020. Borrowers with credit scores below 600 make up only 5.55% of the market, while borrowers with credit scores below 500 make up less than 1% of leased vehicles.

When it comes to auto loans, however, bad credit borrowers tend to have more options. There’s a higher chance of a bad credit borrower qualifying for a used car loan than a new vehicle lease, and there are more lenders able to assist poor credit buyers.

Bad Credit Auto Loans and Cash Down

If your credit is worse for wear, it’s probably a better idea to give yourself a chance to heal your credit score with an auto loan before you apply for a lease.

Keep in mind that with poor credit, you do need a down payment to qualify. If you work with a special finance dealership and apply for a loan with a subprime lender, a down payment is typically necessary.

Most bad credit car lenders require at least $1,000 or 10% of the vehicle’s selling price down, sometimes whichever is less. Down payments increase your odds of successfully completing the auto loan because you’re lowering the amount you need to finance, which lowers your monthly payment. They also help keep you out of negative equity, and, most importantly, show the lender that you’re invested in the loan.

While you need a down payment to qualify, subprime lenders don’t just use your credit reports and score to gauge your ability to take on a car loan. They also dive into the other factors that make up your overall creditworthiness such as work history, living stability, income, and more. By not using your credit reports alone, you have a higher chance of qualifying for a subprime auto loan than a lease because these lenders look at the bigger picture.

Getting into a lease or car loan without a down payment isn’t likely to happen if your credit score is less than stellar. However, with timely payments on your auto loan and careful management of your credit score, you can build your credit and work toward a lease in the future.

Restoring Your Credit Score

Payment history is the most influential factor that determines your credit score. Making every payment on time, every time, does wonders for your overall credit score – even if you have a thin credit file or you’ve had credit bumps along the way.

Nearly every negative mark on your credit reports disappears after seven years. If you give yourself some time, and you can qualify for a subprime car loan that reports your payments, you could very well become a good credit borrower.

Credit repair doesn’t happen overnight, but you can start now. Credit scores aren’t static and nothing reported on your credit reports is written in stone! If you play the credit game strategically, you could eventually qualify for a zero down or sign and drive lease deal in the future.

Ready for a Bad Credit Car Loan?

When you’re ready to get the vehicle you need and repair your credit score at the same time, seek out a special finance dealer that’s signed up with subprime lenders. These dealerships are more common than you may think. Here at CarsDirect, we’ve created a nationwide network of these dealers – and we’ll look for one in your local area so you don’t have to.

Get started on your path to a subprime auto loan by filling out our car loan request form. It’s zero-obligation, secure, and, best of all, completely free.


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, Content Manager

Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

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