Generally, having good credit means youâre more likely to be approved for a car lease and more likely to score a lower interest rate.
Just as with a car loan, you generally need good credit for a car lease. The Experian State of the Automotive Finance Market report says that the average credit score for a new car lease in the first quarter of 2024 was 751.
This means the average credit score for a new car lease is higher than the average overall credit score. The average FICO® ScoreΠin the U. S. climbed to 715 in 2023, with most scores falling between 600 and 750.
Although you may be able to lease a car with a lower-than-average credit score, you might end up paying a higher interest rate or coming up with a big down payment to secure approval.
It is possible to lease a car with a credit score of 665, but you may need to be more flexible and plan ahead. There is no official minimum credit score needed to lease a car, but most lenders want scores of 680 or higher. This is because a high credit score means you are more likely to pay your bills on time and are a safer borrower.
If your credit score is 665, which is considered “fair,” you will likely have to pay more and have fewer car options than people with good or excellent credit. But don’t give up! Here is everything you need to know to improve your chances of leasing a car with a 665 credit score.
Understanding the Credit Score Landscape for Car Leases
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According to Experian data, the average credit score for new car leases in 2024 was 751. This means lenders generally prefer lessees to have scores in the good to excellent range.
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While you may not qualify for the very best terms, there are lenders that will work with borrowers who have credit scores under 700.
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If your score is lower, you can expect to pay more for interest, have to make a bigger down payment, and maybe even be limited in the types of cars you can buy.
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To get the best deal for your 665 credit score, you should look around and compare lease terms from different lenders.
Tips to Improve Your Chances of Approval
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Make a larger down payment. This reduces the risk associated with lending to you.
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Have a cosigner with good credit sign the lease. Their higher score can offset your lower one.
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Pay down debts and lower your credit utilization ratio below 30% if possible.
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Avoid applying for new credit before your lease application. Hard inquiries can lower your score.
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Check your credit reports and dispute any errors that could be dragging your score down.
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Set up automatic bill payments so you don’t miss any due dates leading up to your application.
Alternatives to Consider
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Buying a used car with an auto loan may be easier to qualify for than leasing.
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Taking out a personal loan to purchase a used car is another potential option.
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Making a larger down payment could help secure a lease despite your lower credit score.
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Lease transfers allow you to take over someone else’s existing lease, which may have lower requirements.
The Bottom Line
Leasing a car with a 665 credit score requires flexibility, researching lenders, and taking steps to improve your chances of approval. While you may not get the rock-bottom rates of borrowers with 700+ scores, there are still options available to you. With some strategic planning, you can likely find a lender willing to approve your application. Monitor your credit, reduce debts if possible, and be prepared to negotiate for the best deal. With persistence and the right preparations, you can get behind the wheel of your new leased car even with imperfect credit.
Frequently Asked Questions
What credit score do you need to lease a car?
Most lenders prefer credit scores of 680 or above for the best lease terms. But it is possible to get approved for a lease with a score as low as the mid-600s, which will result in higher costs.
What interest rate can I expect with a 665 credit score?
For used car leases, you can expect average interest rates around 13% with a 665 credit score. For new cars, rates will be around 9%. These are higher than the rates for borrowers with scores of 720+
Does a lower score mean fewer vehicle options when leasing?
Yes, many lenders restrict leased vehicle options for borrowers with credit scores under 700. You may not have access to luxury models or brand new vehicles.
Can I improve my chances by having a down payment?
Making a larger down payment signals to lenders you are less risky. Even with lower credit, a down payment may help secure approval or improved terms.
Should I buy instead of lease with a 665 score?
Buying can be easier to qualify for, gives you ownership rights, but comes with higher monthly payments. Consider your budget and goals before deciding to buy or lease.
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Do You Need Good Credit to Lease a Car?
When a financing company reviews an application for a car lease, it looks for signs that youre a dependable borrower. One of those signs is a good credit score. Why? Because, statistically speaking, the better your credit score is, the less likely you are to miss lease payments.
In other words, a good credit score indicates youre a creditworthy borrower.
Can I Lease a Car With a Bad Credit Score?
Yes, you may be able to lease a car with a bad credit score. But you might be charged a higher interest rate, leading to a bigger monthly payment.
To boost the likelihood of being approved for a car lease, consider:
- Making a big down payment
- Paying off debt to reduce your debt-to-income ratio
- Approaching a friend or relative with good credit to cosign your lease
Remember that you can negotiate various aspects of a car lease, such as your interest rate and trade-in value (if applicable).