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Advantages and Disadvantages of leasing a car while rebuilding

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Anonymous
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Advantages and Disadvantages of leasing a car while rebuilding

I wanted to know anyone or everyone's opinion on leasing a car while rebuilding credit If you have done it what did you gain and lose? Was there an impact on your score or did it improve your situation? What advice would you give someone wanting or having to lease a car??

Message 1 of 7
6 REPLIES 6
RonM21
Valued Contributor

Re: Advantages and Disadvantages of leasing a car while rebuilding

I'm interested in this also. I'll be getting a new vehicle soon, but have tossed up the idea of the lease option, but have no idea how it effects your profile.

I'd imagine it is like the usual installment loan and gets reported the same as any other.


Total CL: $321.7kUTL: 2%AAoA: 7.0yrsBaddies: 0Other: Lease, Loan, *No Mortgage, All Inq's from Jun '20 Car Shopping

BoA-55k | NFCU-45k | AMEX-42k | DISC-40.6k | PENFED-38.4k | LOWES-35k | ALLIANT-25k | CITI-15.7k | BARCLAYS-15k | CHASE-10k

Message 2 of 7
Anonymous
Not applicable

Re: Advantages and Disadvantages of leasing a car while rebuilding

A lease looks just like an installment loan. $225 X 36 month lease, would look like a loan for $8100. Leasing can be good while rebuilding or improving credit. Depends on your transportation needs, wants & what is affordable. Pros and cons to both sides.
Message 3 of 7
StartingOver10
Moderator Emerita

Re: Advantages and Disadvantages of leasing a car while rebuilding


@karladicent wrote:

I wanted to know anyone or everyone's opinion on leasing a car while rebuilding credit If you have done it what did you gain and lose? Was there an impact on your score or did it improve your situation? What advice would you give someone wanting or having to lease a car??


I see this as two different types of questions.

 

1) A transportation type question 

2) A credit rebuilder type question

 

I am not a fan of leasing vehicles except in very limited circumstances, so I will let others respond to that portion of your question.

 

As to rebuilding, you get the most bang for your buck in rebuilding by working on your revolving (cc) accounts and very little score increases come from installment loans which includes the leasing payments mentioned in the above post.  

Message 4 of 7
Anonymous
Not applicable

Re: Advantages and Disadvantages of leasing a car while rebuilding

Can u actually lease a car with low credit score? To my understanding they need at least a 680+ score to lease vehicle. Which is totally different from finance

Message 5 of 7
StartingOver10
Moderator Emerita

Re: Advantages and Disadvantages of leasing a car while rebuilding


@Anonymous wrote:

Can u actually lease a car with low credit score? To my understanding they need at least a 680+ score to lease vehicle. Which is totally different from finance


The subprime dealerships like DriveTime lease their vehicles to those that can't afford it.   IMO it is predatory.  

Message 6 of 7
Anonymous
Not applicable

Re: Advantages and Disadvantages of leasing a car while rebuilding

I'm actually heading to the car lot this afternoon to look into leasing a vehicle.  I just completed a CH 13 in April and submitted a joint application to BMW FS last week and was approved with the highest of our FICO scores being 632.  I then spoke to the CA from my local BMW dealer and he said we weren't qualified at the highest tier but the money factor would only go up by .00020 which would seem to indicate that we fall in the tier just below.  

I've never leased a vehicle but I don't put a lot of miles on them.  I have a 2004 Silverado with 68000 miles on it so from a mileage standpoint, leasing makes sense.  I can get a little more car for my money and not worry about going over miles.  The downside is I'm basically renting a car for 3 years and will have nothing to show for it in the end.

Message 7 of 7
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