Car Leasing: Who is Eligible to Lease?
It seems like the province of the rich – leasing a car. There’s something businessy about it, something that leaves most of us feeling it is simply not for us. Who can lease a car? Do I qualify for a car lease? Can I lease a car?
Well, contrary to many mistaken ideas, the truth is that most people can. Car leasing offers a great way to get a new vehicle to drive and frees you from the worries that are associated with owning a car: depreciation, maintenance, and that moment when the clutch goes!
Read on to learn all about getting that first car lease.
Contents:
Can I lease a car with a bad credit score?
Business leasing and bad credit
Am I eligible to lease a car?
There are two types of relevant car lease – a personal one or a business one.
If you are considering a business lease, then you can jump straight to the ‘What about business leasing’ section. If you are interested in personal leasing, read on.
The single largest factor in your eligibility to lease a vehicle is your credit score or credit rating.
Leasing companies will be at a substantial financial risk in allowing you to drive away with a new car, and they want to know that payments will be made. Like any financial undertaking, this is done by a thorough credit check.
What is a credit check?
Your credit rating (or credit score) is a report which details your previous reliability as a borrower.
It factors in many things – whether you keep up with credit card payments, the amount of your bank overdraft, any unpaid direct debits, your mobile phone contracts and more – and uses that data to assess your risk factor. A poor credit score can leave you struggling to get finance or lease a car.
Your credit score is built up over years after you turn 18, so young drivers may find they have a poor credit score despite having done nothing harmful, simply because they haven’t had the time to build up a reputation.
A credit check is the act of the lender contacting a credit agency to assess you for eligibility. If that report comes back positively then you are very likely to be entitled to lease the car, but a negative report can harm your chance of leasing a vehicle – but we can help!
Can I lease a car with a bad credit score?
At Complete Leasing, we may be able to help those who have a low credit rating with a short-term leasing deal. Generally, leasing on a short-term agreement is seen as less of a risk for finance companies, compared to a longer-term deal.
If you have a poor credit score, don’t hesitate to get in touch with us today, and we’ll do our best to help you!
Finance companies, as well as us, will do what they can to get you on the road. It is always good to be honest about your credit score in advance and discuss bad credit car leasing options from the outset.
Some companies may be willing to take you on despite a poor report, although it is likely that to mitigate some of the risk, they will be looking for a larger monthly payment on your lease.
Is there an age limit for leasing a car?
You need to be 18 in order to lease a car, though it should be noted as mentioned above that the credit score for a young driver may be an issue.
Depending on the finance company and the deal you want, it may be possible to accept a guarantor for a lease (someone such as a parent with a solid credit history who will be willing to uphold any payments you fail to make).
As with bad credit situations, it is always worth being upfront and discussing these options with us as soon as possible.
What other details do I need to lease a car?
In addition to a standard credit check, car leasing companies like to see stability in both employment and your living situation.
You will need to be able to show your addresses for the past five years and a show of steady employment for the past three years.
What about business leasing?
Being eligible for a business lease is similar to a personal lease, only the credit scoring is usually done against your business and not you as an individual.
Your accountant should be able to provide you with a good indication of whether your business accounts are of good financial standing - enough to have the credit required for a car lease.
If the business is well-established and in no financial difficulties, then getting a car on lease should be no problem.
Can I lease a car through my limited company?
There are many different types of companies which are able to lease a car. These include (but are not limited to):
- Public Limited Companies (PLCs)
- Limited Liability Partnerships
- Partnerships
- Limited Companies
- The Self-Employed
Depending on the company finances, the lending agency may require further details, including those of the directors (potentially for further credit checks) and business bank statements for the previous three months.
If you are self-employed then the credit checks performed are often identical to those for personal car lease eligibility.
What about business leasing eligibility with bad credit?
If you have bad personal credit, but your company is in a fine standing, you may be able to secure leasing finance through a company who doesn’t require director information.
Conversely, if your company has a poor credit rating, or is a new venture that hasn’t had the time to build up a solid set of accounts, then you may be asked to provide a Director’s Personal Guarantee (DPG), where you show a willingness to take on the payments should the company fold.
What about fleet leasing?
If you intend to get multiple vehicles for your company, you should be looking at fleet leasing.
With a substantial financial risk for the leasing company, fleet leasing is only available for companies with a strong financial standing and detailed accounts.
What other leasing options exist?
Can I get car leasing with no deposit?
A typical first instalment on a car lease is three months.
If you have trouble with this initial payment, then you may want to look at leasing agreements with no deposit.
Though these are rarer, at Complete Leasing we can help – just give us a call to discuss your specific needs.
What about short-term leasing?
Often the length of a car leasing contract is more than you require – especially if you are planning to move in the near future, or have other changes coming in your life.
Short-term leases cover periods from three months to 12 months. It can be seen as a long-term car hire and is substantially cheaper than going to a hire company for a prolonged period. Like standard leasing however, you will still have to determine your car finance eligibility through a credit check and meet the minimum requirements.
Where can I get the best easy leasing deal?
Give Complete Leasing a call today for the best car leasing deals.
We can discuss your car leasing eligibility, help answer any questions you have about leasing and then find you the best lease deal that suits you perfectly!
