I have bad credit, is car leasing the answer

I have bad credit, is car leasing the answer? Owning a car or at least having access to a car is so important in western countries that not owning one can make it impossible to carry out fundamental activities like working, shopping and going to school or college. This is a fact that people from countries with a different economic structure may find hard to understand. For example, you might ask, why on earth would a family need three cars? But if the family lives in the country or suburbs, thirty miles from the nearest supermarket, school or business centre and there is no public transport in the area, you can begin to understand.

So if you have bad credit and you don’t own a car, or not enough cars, you can be in a real conundrum. You need a car to work, pay bills and improve my bad credit score, but your bad credit will not allow you to buy a car. What options do you have?

What are your options?

You will be surprised with the car finance options you have regardless of your bad credit. However this does not mean that having bad credit is not a problem, that it doesn’t matter. Having bad credit will cost you money, it limits your finance options and forces you into expensive loans. In fact beware of car loan brokers that say having bad credit is not an issue. Credit scores are your finance reputation, if it is good you will be approved for loans easily and on good conditions. If your credit score is bad you will pay more and get fewer loans approved. So credit scores are very important. However having bad credit is not the end of  the world and there are ways round it if you need a car.

You can approach sub-prime finance companies. These companies specialize in clients with bad credit and charge higher fees and interest rates to hedge the extra risk in their investment.

You can borrow from friends. Not the most advisable option, but hey if your friends can afford it…

You can apply for a secured loan. Secured loans are hardwired with a collateral that will be paid to the bank if you fail to make your payments. These loans are good to build your credit score again. This is because the loan is “safe” to the lender but does count toward the borrowers credit score.

Another option we will analyze in more detail in this and following articles is car leasing. Car leasing is an alternative way of having access to a car. You never own the car, have fewer responsibilities, don’t pay as much tax on the car and spend less time on the car management. It also is attractive for clients who always want a new car with the peace of mind that provides. Car leasing (often from the very manufacturer) can guarantee a reliable, new car at lower payments than the vast majority of car loans. The only catch is that you will never own the vehicle unless you buy it at then of the lease term.