What’s the Minimum Credit Score to Lease a Car in Canada?

Leasing a car in Canada serves as a great option for those looking for a long term car rental rather than buying a new car with financing. However, it’s important to know that you need a minimum credit score to lease a car in Canada.

While there is no official minimum credit score required to lease a car in Canada , in practice the expectations will vary by dealership. Generally speaking you’ll want to have at least a score of 620 to secure a car lease without trouble. Keep in mind that 660 is the lower threshold for a “good” credit score rating in Canada. If your credit score is lower than that, fear not – you can still land a lease on a new car.?

The catch is, you’ll have to shop around a bit more, as well as potentially pay a higher interest rate.

What Credit Score Do I Need to Lease a Car?

When it comes to leasing a car in Canada , your credit score can potentially play a vital role. If you’re hoping for the application process to go without a hitch, ideally your credit score will be at least 620. Because of its significance, it’s essential to regularly check your credit score. Maintaining a good credit score is not only crucial for securing a favorable deal on a car lease, but it’s also used by insurance companies to determine the pricing of your car insurance premiums .

With a credit score below 620, you’re likely to pay more on both a down payment and the lease payments themselves. Dealerships will look to increase the premium on your lease terms if your credit score is low, in order to lessen some of the risk they’re taking by leasing you a car.

Just how much more you’ll pay, both up front and for each month of your lease, will depend on your credit score, your dealership, and the value of the car you want to lease.?

How Do I Get a Car Lease with a Bad Credit Score?

Even with a credit score below 600 , you can still find dealerships willing to work with you. However, when your credit score there are steps you might need to take in order to still find a good deal.?

Below we’ll run through some of the things you can do to improve your chances of getting a car lease with bad credit .

Use a Co-Signer

One of the most effective ways of improving your options is to find a co-signer. A co-signer is essentially a friend or associate with a strong credit score who is willing to let you ‘borrow’ their good credit standing on your lease agreement. In doing so they agree to help you pay any debt accrued in the event that you fail to make the lease payments.

Most lenders are very open to co-signers, however as with any detail here, this may vary between dealerships. Generally speaking, a co-signer with a great or excellent credit score will make it much easier for you to land a car lease with a competitive interest rate. If this is an option for you, it could save you a significant amount of money in the long term.

Increase Your Down Payment

Another way to increase your chances of being approved is to take on more risk by putting up a larger down payment. By lowering the risk that the dealership takes on, you become a more attractive borrower.

Making a larger down payment can also benefit you in the long term, as it could help you land a lower interest rate as well as a more manageable monthly payment.

Take Over an Existing Lease

Taking over an existing lease might be an option for you, in which case you could land much better term agreements compared with taking on a new lease. If you know someone who needs to break their lease deal early, you could agree to have their lease transferred to you.

While there is likely to be a transfer fee, you could still save money overall on the monthly payments. Plus you won’t have to worry about a down payment.

Negotiating Lease Terms

When you’re shopping around for a car lease with bad credit , it’s important that you’re able to negotiate well. Sure, you may have a low credit score, but that doesn’t mean you can’t be well-informed and confident.

It helps to do your research and get a good picture of what you can reasonably expect, given your credit standing. Some lenders might try to take advantage of your low credit score, so it helps to know what to expect before you shop around.

If you can, seek out a few quotes from multiple dealerships and use that information when negotiating. And always be prepared to walk away if you feel like you’re not getting a fair deal.

This article is the shortened version of an article originally published on Hardbacon.ca by Arthur Dubois under the title "What’s the Minimum Credit Score to Lease a Car in Canada?".