Question

Can You Lease a Car with Bad Credit?

Written by JaredReviewed by JaredLast reviewed 2026-08-07

Can you lease a car with bad credit?

Yes, sometimes. Leasing is a prime-credit product: average lessee score 749; 84.9% of new leases prime or better; subprime 4.22% (Experian Q1 2026). Approval below prime credit happens, but it is the exception in the leasing market, not the routine case, and it comes with real cost differences from a prime approval.

This page covers what specifically changes when your credit sits below prime: the money factor, a possible security deposit, term restrictions, and what a co-signer can and cannot do. None of it is a promise of approval. No leasing company approves every applicant, and nothing here pretends otherwise.

What counts as bad credit for a lease?

By VantageScore 4.0, the scale behind Experian's leasing data, subprime is 501 to 600 and deep subprime is 300 to 500. Together those 2 tiers made up just 4.22% of new leases in Q1 2026.

Near prime, 601 to 660, is not officially "bad credit," but it sits below the range that gets an advertised lease special. Most of what people mean by leasing with bad credit really applies to subprime and near prime scores together, since both groups see a materially different money factor than a prime or super prime applicant does.

How much does bad credit raise your money factor?

Substantially, in two layers: a higher buy rate for the credit tier itself, and sometimes a dealer markup stacked on top of that. Here is the same hypothetical 36-month lease on a $30,000 car, computed rather than estimated, at a prime-tier money factor versus a subprime buy rate versus a subprime rate with a dealer markup added.

Moving from the prime money factor to the subprime buy rate alone added $79.62 a month, $2,866 over the term, on the identical car. A dealer markup on top of that buy rate added another $36.40 a month, $1,310 more, for a combined $116.02 a month and $4,176 over 36 months above the prime payment. The mechanics of how a dealer markup gets added on top of any tier's buy rate, and how to ask for the buy rate directly, are covered in can dealers mark up the money factor.

These hypothetical rates are not out of line with real credit-tier pricing elsewhere in auto finance: new-vehicle loans averaged 6.39% APR in Q1 2026 while used-vehicle loans, which skew toward thinner credit files, averaged 11.43%, per Experian's State of the Automotive Finance Market. Subprime lease buy rates follow the same shape, priced well above the prime buy rate before any dealer markup is added.

This does not match the real-world average payments by tier, and that is worth explaining directly. Actual Q1 2026 lease payments ran nearly flat across tiers, $611 prime, $614 subprime, $618 deep subprime, per Experian. That flatness comes from selection: subprime approvals lean toward cheaper cars and more cash at signing, not a lower rate. Hold one specific car steady instead of letting the whole market shift underneath it, and the money factor's real effect on the payment is stark, hundreds of dollars over the term for the identical vehicle.

Do you need a security deposit to lease with bad credit?

Sometimes, yes, even when a prime-tier borrower on the identical program would not need one. A leasing company can require a refundable security deposit as a condition of approval for a weaker credit file, on top of whatever amount is already due at signing.

That required deposit is a different thing from the optional multiple security deposit (MSD) programs some captives offer prime and near-prime shoppers, where paying extra refundable deposits voluntarily buys down the money factor. A required deposit for a subprime approval is not optional and does not necessarily lower the rate; it is a condition of getting approved at all. How MSDs work, for the shoppers who qualify for that program, is covered separately.

Whether a deposit applies, and how much, depends on the leasing company and the specific approval, not a fixed industry rule. Ask directly whether your approval includes a required deposit before you agree to anything, since it changes how much cash you need at signing beyond the monthly payment itself.

Can bad credit limit your lease term?

Yes, at some captives. A leasing company can cap the term lengths available to a lower credit tier, or restrict which specific models and terms an approval applies to, though the exact limits are not standardized across the industry.

This is a case where "many captives" is the honest phrase, not a specific universal rule. Term restrictions, where they exist, are set by the individual leasing company approving the deal, and they can change without much public notice. Ask what term lengths your specific approval allows before assuming the standard 36-month term is available to you.

Does a co-signer help you lease a car with bad credit?

Often, yes. A co-signer with stronger credit can improve both approval odds and the money factor offered, since the leasing company can weigh the stronger of the two credit files on the application.

A co-signer is not a reference or a formality. They go on the lease as legally responsible for the full monthly payment for the entire term, the same as the primary lessee, and a missed payment reports against both credit files. The full mechanics of co-signing a lease, including what happens if the arrangement needs to change mid-term, are enough for their own page; this one only covers that a co-signer is a real option worth asking about.

Should you lease with bad credit, or is there a better option?

Sometimes leasing is still the right call, but if your score dropped recently and cash is tight, a marked-up subprime lease is rarely the cheapest path forward. A lease returns the car at the end no matter what rate you paid to get it, and lease contracts are generally harder to exit early than a loan if your situation changes again.

Financing a modest used car, or continuing to drive a car you already own while your score recovers, usually costs less in total than paying a leasing company's highest rate tier for a car you have to hand back. If the goal is only to rebuild credit, a lease does not do that job any better than an on-time loan would. Does leasing build credit covers why the credit-reporting mechanics are identical either way.

If your credit is closer to prime, or you want the fuller picture of what score gets you the advertised numbers, see what credit score you need to lease a car. Complete Car Lease is not a dealer, lessor, or broker, and nothing on this page is a promise that any specific applicant will be approved.