Is Leasing a Car With a 650 Credit Score a Good Idea?

Leasing a car may be a tad more affordable on a monthly basis, as well as the potential to boost your credit score as you make on-time payments.

So is leasing a car with a 650 credit score a good idea, or even possible?

According to trade groups in the leasing industry, 620 is the average minimum credit score generally approved for leasing.

However, most leasing companies prefer a 700 FICO score (good credit) or higher.

The low-end cutoff point is usually 599 credit score or below. At these levels you’re considered super sub-prime which will limit your chances of obtaining a lease even further.

A fair FICO score (580 – 669), although at higher interest rates, should allow you to obtain a lease and improve your credit rating as you make monthly payments, but is it a good idea? Well, it depends on your unique situation.

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Leasing a car with a 650 credit score

leasing a car with 650 credit score

There are two kinds of car leases that include closed-end lease an open-end lease. In the closed-end lease, the lessee doesn’t have to buy the car when the lease term ends.

But if any serious damage occurs or you drive more than the allotted mileage then you have to pay the penalty.

In the open-end lease which is also known as equity lease, you have to buy the car eventually.

There’ll be no restriction on yearly mileage as there is with a closed-end lease, so the lessee can use the vehicle how he/she sees fits.


Having a 650 credit score, your car lease may have higher interest rates. However, if you can make timely payments every month, your credit score will increase.

A higher credit score will mean a lower interest rate when buying a car (used or new).

In that sense, leasing before buying might be a better option especially if you don’t have the funds for a 10 to 20 percent down payment for owning a vehicle currently.

What is a credit score?

Credit score refers to a number that’s provided to a person to determine if he/she deserves credit or not. It’s completely based on the credit report of the individual.

Credit scores help in calculating the risk involved in lending money or leasing a property. With a high credit score, you can get a loan easily at lower rates.

The credit score of an individual range is from 350 to 800. Bottom-line, your credit score shows your creditworthiness and the ability to pay a loan and debt.

Where does your credit score come from?

The basis on which credit score is evaluated contains data such as payment history, the amount owed, credits used, etc. To lease a car, it’s beneficial to obtain a higher credit score.

If someone has a credit score of less than 619, then that person is considered as a subprime borrower.

You can improve your score by following the methods given below. All these methods will help you in leasing a car with a credit score of 650.

  • It’s necessary to pay the full amount of the loan on time.
  • Don’t allow credit to be over-utilized – use less than 30% of available credit.
  • Check your credit report yearly, there may be errors that can negatively impact your score.
  • Try not to apply to too many credit cards as hard inquiries can hurt your score. They remain on your credit report for 2 years.
  • Try to avoid closing a credit card as length of credit history accounts for 15% of your score.

Visit to receive a free copy of your credit report to check the accounts influencing your credit score. After getting a copy, check for accuracy and see where you can make improvements.

Is leasing a car with a 650 credit score a smart move?

If you don’t have the money to purchase a new or used vehicle, then leasing may be a better option.

There are some limitations that you have to abide by, however.

A few limitations include remaining under a certain mileage throughout the year (typically, between 10,000 to 15,000 miles for closed-end leases). If you exceed the yearly mileage you may be penalized with a fee.

Also, wear and tear is an important factor so ensure that you drive safely and are taking care of the vehicle.

Leasing may help with affordability

If a car is too expensive, you have the option of leasing at a more affordable monthly rate. It’ll become easy for you to drive your dream car.

Later on, you can buy it after having enough money or change it with a new one. Financing a car will mean you’ll have to make a down payment of 10%-20%.

This is not in the case of leasing. In addition, you don’t have to go through the headache of selling a used vehicle. Some more benefits have been given here.

  • You get the chance to enjoy the latest technology and its unknown features.
  • Lease costs less than buying a car because you only pay the depreciation amount for the used portion of the vehicle.
  • Some lease agreements comes with no down payment option. Pay only for the first month.

How to lease a car with a credit score of 650?

Despite having a fair credit score, leasing a car is possible. A credit score of 650 isn’t so bad.

There is a price you have to pay as a higher interest rate because the risk exists due to the low score. Even after that, you will surely find a dealer who will approve but he will put several restrictions.

Every dealer/lender have some set standards that you have to match anyhow. To lease a car with a bad credit score, read the suggestions mentioned below.

  • Keep proof of your income and residence.
  • Be ready to pay a higher interest rate on leasing.
  • The dealer may not provide you the vehicle of your choice and he may also impose a restriction on the amount of money you can spend on your car. Learn to sacrifice a little in this condition.
  • Most dealers check your income. The chances of leasing the car increase when your income meets with the company expectations.


If you fail in leasing a car with a credit score of 650 then don’t give up. Instead, work on your credit score. Leasing a car isn’t a simple task especially when you have a low credit score.

As mention above, paying monthly leasing fee of the car at the given time can improve your credit score. But first, you have to convince the lessor that you are worthy to be trusted.

If you do all things right in an appropriate way then you would be able to drive your dream car.

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