First, it’s important to understand what exactly we mean by “bad credit”. Bad credit deals with the borrower’s credit history and shows that the borrower is more likely to miss payments or default and therefore, be a greater risk for the creditor as compared to a borrower with a high credit score and good credit. A credit score of or lower than 579 is considered to be poor credit, and the borrower is likely to default and fail to repay the loan.
While many banks and companies have tightened their policies and are now less inclined to give a lease to individuals with bad credit, many car dealers have turned poor credit borrowers into a whole new business for themselves. There are many car leasing companies in the UK now that provide cars on lease for individuals with a bad credit score, such as zero deposit car leasing, cars2lease.
To make this possible, car dealers now focus on getting the customer into the perfect car lease suitable for their particular case of bad credit. However, the question is: why have car dealers started doing this? The simple answer is because car dealers are desperate for business and to keep up with the growing competition, they are willing to take in customers any way they can. To make up for the potential loss they may be incurring from taking on such huge risks, favour car dealers require a greater security deposit and charge higher interests too when selling to people with low credit scores.
Another way to lease a car in the UK with poor credit is by taking over the lease from someone else. If another person has been granted a lease by a dealership but is now failing to make the payments, you can take over their lease. This way, you don’t have to go directly to the dealer and ask for a lease, which you might not have gotten because of your bad credit. So you’ll be doing the other per favour by taking the lease off their hands while still getting a car out of the deal even with your poor credit.