Buy or Lease a Car?

Posted by Ryan on August 12th, 2019

When a person has in the past applied for and was granted a loan which he received and failed to comply with the due date of payment, such a person will be regarded a having a bad credit score. The bad credit score is a reflection of the borrower’s financial history. This record, subsequent lenders would have to see before they approve any car loan for such a borrower.

Truly, if a borrower has such a terrible financial history with previous lenders in the past, as to have his credit score below 560, the chances of him getting that car loan will be very slim, as lenders issuing loans are not ready to take any chance or put themselves at any sort of financial risk.

Going by what is obtainable, auto dealers who are considerable enough to give borrowers with bad credit loans, only do so with smaller amounts.  Interests rates payable every month on the loan, for as long as it lasts are usually on the high side too.

Considering Your Bad Credit Situation, Which Is Best For You- An Outright Car Purchase Or A Car Lease?

Buying a car fully will mean you having full possession and ownership of the car. This will make the borrower incur more expenses, making him borrow more. Although purchasing a car gives you full and unlimited access to the car in question, considering your condition of having bad credit auto loans, is it really in your interest to acquire more financial burden on yourself? Another thing to consider is that the more expensive your loan is, the higher the interest rate payable on it monthly.

How about leasing the car instead? Leasing a car may not really be an attractive option, especially for those who want to have full control over the car they seek they acquire. The good thing about a lease is that lenders, charge lesser payments for lease. This is because leases are generally easier to get that funding of your car loan. With a lease, you will add less debt to the already existing bad credit you have. By this I mean, as an individual you make lesser payments than when you make an outright purchase of the car.

Due to the nature of a lease, which the possession of the leased car will revert to the owner or lender upon the expiration of the lease period, the borrower is afforded the opportunity to drive many nice cars, which ordinarily hewould not be able to afford due to his bad credit.

It is therefore recommended that if you have a bad credit record and you do not want to add significantly to the debt hanging on your name, opt for a car lease instead of a purchase. By so doing, you will reduce the incoming debt, making it easier to redeem and invariably improve your credit score. Learn more about your credit score via https://www.equifax.com/personal/education/credit/score/what-is-a-credit-score/.