How to take a car with a bad credit history
Sometimes, a client's credit history is ruined, and access to standard banking services is closed to him. However, this does not mean it is impossible to lease the required business vehicle. Any leasing company checks the potential lessee before approving a deal. It also analyzes the financials and assesses the risks of non-payment. If you have some problem with credit, can you lease a car with bad credit? Yes, you can.
Most companies are very loyal to their clients. This is because leasing has quite a few differences from a loan. Until the moment of complete redemption, the property is the property of the leasing company. Therefore, it can quickly seize the leased items if there are specific problems with payments.
Before approving a lease, lenders take into consideration:
Credit history status, the amount owed, and reason for debt;
period of overdue payments, amount of consumer loans, the payment schedule for utilities, and other mandatory expenses;
official income of the applicant, additional sources of funds;
availability of guarantors pledged property.
It is a common opinion that leasing companies do not check the credit history of potential lessees. But it is wrong. Without exception, all leasing companies make inquiries to one or more companies. They get the client's credit history before they close the deal. Particular attention is paid to the lender's rating. It is possible to get approval if the score is between 600 and 800.
What restrictions may be for borrowers
Leasing vehicles for bad credit can be with some restrictions. The requirement to increase the advance payment at the expense of own funds. To a client with a bad credit history, leasing companies offer to increase the advance payment on the leasing up to 40 - 49% of the value of the purchased property—mandatory provision of additional collateral. If the client's credit history is not good, the leasing company may ask for a guarantee or even a pledge of other property.
Restrictions on the choice of leases. Sometimes leasing companies agree to approve clients with a bad credit history only renting particular property. Regulations can be stringent. For example, sometimes, the deal is approved only for a specific make or model of car.
Buying a car on a lease
At the stage of preparation for the deal, you need to decide on the choice of the leasing company. And the objects of leasing. You can independently determine what property you will buy, quantity, brand, model, configuration, etc. It is also desirable to find a supplier. Specialists of the leasing company can also help you with selecting the objects of leasing and searching for a suitable offer, but sometimes there is a separate fee for this. Everybody can try to lease a car with bad credit.
When choosing a leasing company, it is advisable to compare the conditions of several firms. This will allow you to make a more informed decision. Do not forget about the various special offers. Thanks to them you can save quite a lot of money.
Once you have chosen the right leasing company, you need to apply for leasing. This can be done by phone, e-mail, or through the official site. The manager will send you a detailed quotation and a complete list of the documents required for making a decision and concluding the deal. You have to prepare and submit them to the leasing company.
If the application is approved, you will be sent a leasing agreement, payment schedule, and various annexes to the contract. All the documents should be carefully studied and signed if you agree with their conditions. After that, you will have to make advance payment and receive the property following the terms of the agreement.
When an agreement between a leasing company and a legal entity with a bad credit history has been signed, the lessee needs to comply with the terms of the agreement. Make monthly payments for the possession and use of the leased object on the due date.
To observe the rules of use of the leased object (in the case of a car: limited mileage, prohibition to going abroad without the lessor's permission, changes in the construction of the vehicle).