Leasing an Automobile in Canada with Bad Credit

Appy HereThere are options to get a new car lease when a person has a less than perfect credit history, a low credit score, has a TDSR (high debt to income ratio) or No Credit at all!

The bad credit issues usually reveals themselves when a consumer attempts to lease a car and the car dealer pulls his credit bureau from Equifax or Trans Union, which is a numerical reporting of the consumer’s entire credit history¬† and finds the score is too low for the best lease rates.

This kind of customer is considered a “non prime” or subprime borrower. Recent problems in the banking and lending industry have made it more difficult now for non-prime borrowers to find loans and car leases.

If you have bad credit or if your a are considered a non-prime leaser, you may not be able to take advantage of special promotions and lease deals offered by car manufacturers. These deals have special low lease rates and are typically offered only to well qualified, good credit, steady earners with no excessive debt.

People with no credit, bad credit, poor credit and slow credit will sometimes have an easier time leasing over buying.

The reason for this is that leasing is considered by the major banks to be a higher risk than purchase financing with a loan due to the fact that a down payment is often not required and that the outstanding amount owed on a lease nearly always exceeds the worth of the vehicle for most of the lease term, which is a result of low monthly payments.

If the leaser (“lessee”) defaults or misses payments, a lease company stands a greater chance of losing money if the car must be repossessed.

High debt loads can also be a problem. If a credit applicant’s outstanding debts are relatively high when compared to their income, lease companies may not be willing to let that person add more debt to their debt load, which increases the probability that they might have problems with payments in the future. Even with a good credit score, excessive debt or “High TDSR” can be a problem getting a lease.

Leasing an automobile with a bad credit score or no credit score may require that the Canadian customer pay a higher interest rate, make a larger down payment (cap cost reduction), or pay an upfront refundable security deposit – or all of the above.

Leasing consumers who later have trouble making payments should work with the lease company to get payment relief or to work out terms you are both satisfied with in order to preserve your credit. The sooner you contact them, the better your chances of getting help.

Do anything to keep making payments on time and prevent getting behind or worse, repossession. Most people are not aware that even a voluntary lease repossession can seriously damage your credit rating for up to seven years.

Lease credit requirements can vary between leasing companies, different car dealers, banks and finance companies. Therefore, it pays to shop around for the best deals when you have bad credit.

Since the recent financial meltdown – in this economy, it is more challenging to get approved for leases and loans with North American car companies – Ford, General Motors, and Chrysler – than with foreign car makers – Toyota, Nissan, Honda, Suzuki who still have plenty of cash to lend.

Auto Source works with you directly to obtain a No credit, Bad Credit Lease in Canada. We have special lenders who over look past credit issues and lend on your ability to service the payment. This means its not about your past issues but more about your ability to make the payments.