Declined for a Car Lease? 6 Things You Can Do About it

Get Car Financing
Even with poor credit.

By

Contributing Writer

David Topham covers the automotive and auto finance industries as the Content Manager of Auto Credit Express who also contributes to CarsDirect. He was born and raised in Michigan and is a graduate of Michigan State University.


, Contributing Writer - November 12, 2018

If you were turned down for a car lease, it doesn't mean your chances of getting one are dead. There are several steps you can take to try to get approved for a lease when you've been declined.

Steps to Take After Being Denied a Car Lease

There are many reasons that your auto leasing application could've been turned down. Whether it's because your credit score is low, your credit reports are filled with derogatory marks, or you were denied for reasons outside of your credit, you can still turn things around. Here are some steps you can take to improve your chances of getting approved for a lease when you've been declined previously:

  • Find Out the Reason Why – If your credit is to blame, the lessor is required by law to give you an adverse action letter. This is a written explanation that tells you why your application was declined. Learning what went wrong tells you what you need to work on in order to get approved the next time.
  • Get a Cosigner – It's possible that having somebody with good credit and a long credit history to sign the lease alongside you could be the difference in getting approved. Make sure both you and the cosigner understand what cosigning means before entering into this type of agreement.
  • Have a Security Deposit – If you have bad credit and can only qualify for a lower leasing tier, a lessor may require a security deposit. If you come to the table with the money ready, it may put you in a more favorable light. Of course, because it's a security deposit and not a down payment, you get the money back at the end of the lease, minus any fees or penalties.
  • Make a Large Down Payment – On top of a security deposit, a lessor may also ask for a down payment. Putting money down on a lease doesn't lower the overall cost, but it does lower the monthly payment. A lower payment could help you get approved if it improves your payment to income ratio.
  • Apply With Different Lenders – Most leasing is done through the lending arm of auto manufacturers, called captive lenders, and each has different rules for approving customers. Just because one dealership denied you doesn't mean they all will. You may be able to get approved with a different manufacturer. Or, if you want a particular model, maybe you need to go to a bigger dealer of that brand as they may have more influence with the lessor. Talk about your situation with their finance department and see if they can help you.
  • Take Steps to Improve Your Credit – If you're being turned down because of your credit, your only choice may be to take steps to improve your credit score before applying again. A few things you can do are check your credit reports for errors or inaccurate information to dispute, establish a stronger payment history by paying all your bills on time for an extended period, get current on past due bills, or reduce credit card balances.

Leasing a Car with Bad Credit

Leasing can seem like an attractive option to many, considering there's no long-term commitment, payments are typically lower than when buying a car, and you get a brand new vehicle. Unfortunately, it's difficult to qualify for a lease if you have bad credit.

The truth is that leasing programs are typically reserved for consumers with great credit. Certain captive lenders may be willing to offer leases to borrowers with less than perfect credit, but it can still be a challenge trying to find an approval. Not to mention, the lessor may ask for a security deposit and a down payment, charge a higher interest rate, and limit your vehicle choice to a few less expensive options.

Instead of trying to jump through all of those hoops, you're typically better off trying to get an auto loan. Generally speaking, it's easier to qualify for a car loan than a lease. Plus, you can use the auto loan to improve your credit with on-time payments so you can qualify for a lease in the future.

Getting a Car Loan with Bad Credit

You can try to get approved for a lease when you've been declined, but it may not be possible. Instead, you can get the vehicle you need with a bad credit auto loan, and CarsDirect can help you find financing.

We work with dealerships all around the country that specialize in helping buyers with imperfect credit. We'll work to match you with a dealer in your area after you submit our online auto loan request form. Get started today!

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, Contributing Writer

David Topham covers the automotive and auto finance industries as the Content Manager of Auto Credit Express who also contributes to CarsDirect. He was born and raised in Michigan and is a graduate of Michigan State University.


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