Automotive

Can you lease/finance a car with bad credit?

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[OP]
Deal Addict
Aug 23, 2013
1256 posts
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Vaughan

Can you lease/finance a car with bad credit?

My girlfriend wants to sell her truck and lease or finance a used car but she has very bad credit. How would we go about doing this? She only wants a civic or something cheap on gas that's reliable. We want to use the money from the truck as a down payment and pay around $150-200 per month.

Any alternatives to co-signing?
21 replies
Deal Fanatic
Dec 24, 2005
5766 posts
1604 upvotes
sure you can

just not at the rates everyone else is paying sadly

expect finance rates of over 10% (and even 20% if you have very very bad credit)
[OP]
Deal Addict
Aug 23, 2013
1256 posts
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Vaughan
gizmo8 wrote: Bad credit is doable but she must show she is working and they will hit you with higher interest rates and fees..$200 a month for a new civic is a bit on the low end though.
She wants to go for used that way she can pay it off sooner. Would you recommend she leases or finances?
Deal Addict
Dec 19, 2013
1274 posts
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North Vancouver
Neither, you'll be paying a hell of a lot more with spiked up interest rates. I would suggest selling the truck and used whatever money you get from the truck for the new car. There are used civics for all price ranges and there shouldn't be too much of a problem as they are quite reliable. Otherwise, save up and pay it off. In the meanwhile, I'll work on rebuilding that credit. Apply for some credit cards and use 5-10% of the limit, and pay it off monthly. Or if already have credit cards, apply for increased limit.
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Jun 4, 2012
422 posts
194 upvotes
New Westminster
Honda is expansive brand, please do research on Mitsubishi Lancer, it's cheaper and better than Civic.

Fyi the insurance for Honda is also higher than Mitsubishi.
[OP]
Deal Addict
Aug 23, 2013
1256 posts
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Vaughan
bomiheko wrote: Neither, you'll be paying a hell of a lot more with spiked up interest rates. I would suggest selling the truck and used whatever money you get from the truck for the new car. There are used civics for all price ranges and there shouldn't be too much of a problem as they are quite reliable. Otherwise, save up and pay it off. In the meanwhile, I'll work on rebuilding that credit. Apply for some credit cards and use 5-10% of the limit, and pay it off monthly. Or if already have credit cards, apply for increased limit.
Do they take the payments out of your account automatically like the insurance companies do?
She wants to spend like 8k on something and put about 2.5k down. How much do you think she will be paying per month with very bad credit?

She doesn't want to buy another beater in that price range because she keeps buying lemons and spends more on repairs.
[OP]
Deal Addict
Aug 23, 2013
1256 posts
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Vaughan
SampahBau wrote: Honda is expansive brand, please do research on Mitsubishi Lancer, it's cheaper and better than Civic.

Fyi the insurance for Honda is also higher than Mitsubishi.
What about a used lancer?
Deal Addict
Jul 22, 2014
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Ottawa, ON
Best thing she can do for herself is to trade the truck for an equal value car and drive it till her credit rating improves.
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Jun 4, 2012
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New Westminster
marcodt wrote: What about a used lancer?
All used car conditions depends on how the previous owner maintained the car and the mileages.

Btw another option is Nissan Sentra
Deal Expert
Feb 24, 2007
15094 posts
2697 upvotes
marcodt wrote: My girlfriend wants to sell her truck and lease or finance a used car but she has very bad credit. How would we go about doing this? She only wants a civic or something cheap on gas that's reliable. We want to use the money from the truck as a down payment and pay around $150-200 per month.

Any alternatives to co-signing?
Co-signing is a poor decision for long term.
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Mar 7, 2011
1273 posts
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Brooklin
She can get a line of credit or loan from her bank if she's working. Interest rates will be much lower.
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Deal Fanatic
Apr 16, 2007
8132 posts
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Financial District B…
marcodt wrote: My girlfriend wants to sell her truck and lease or finance a used car but she has very bad credit. How would we go about doing this? She only wants a civic or something cheap on gas that's reliable. We want to use the money from the truck as a down payment and pay around $150-200 per month.

Any alternatives to co-signing?
Never a good idea to offer your good credit as surety for someone who's has previous poor credit. Co-signing for someone who's has no credit or too new to credit is not the same.

Your first main issue is determining the current status of the derogatory accounts on file. If any of the collection accounts are unpaid with reported balances she will have a very difficult time securing any auto loan whether lease, loan or otherwise.
A poor credit profile with settled accounts will rank and rate totaly different than one who has skipped defaulted accounts.
----------------------------Licensed Credit Bureau member, S1, FI Automotive, CCP forums most banned = x 13 and counting, guess who that is?... stomped to the curb once again
Deal Guru
Jun 11, 2005
13574 posts
2963 upvotes
Toronto
Bad credit = higher interest rates.

Good credit = lower interest rates with some exceptions. Usually 4.79% interest if you borrow a larger amount and 6.99% if you borrow a small amount regardless of how good your credit is. Banks need to make a profit too so small loans = higher interest.
Deal Addict
Feb 24, 2007
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Here is Canada. Bad credit rating will be gone after 3 years.
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Deal Fanatic
Apr 16, 2007
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Avatar wrote: Here is Canada. Bad credit rating will be gone after 3 years.
False
----------------------------Licensed Credit Bureau member, S1, FI Automotive, CCP forums most banned = x 13 and counting, guess who that is?... stomped to the curb once again
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Jul 18, 2008
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Markham
eldiablo wrote: Co-signing is a poor decision for long term.
Have to agree with this statement.
Of course, totally dependent on the situation but based on my past experience, it's way too much of a headache. If you're gonna go this route, make sure you really take the time to weight out the pros and cons.
[OP]
Deal Addict
Aug 23, 2013
1256 posts
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Vaughan
Thank you for all the replies so far.
Aside from the whole bad credit thing, can you all recommend a reliable used vehicle that's cheap on gas in the 7-9k price range?
Thanks!
Deal Addict
Mar 8, 2007
1463 posts
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Civic or Corolla
Buy/Sell/Trade with confidence, 50+ positive feedback.
Deal Addict
Feb 18, 2006
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Home
marcodt wrote: My girlfriend wants to sell her truck and lease or finance a used car but she has very bad credit. How would we go about doing this? She only wants a civic or something cheap on gas that's reliable. We want to use the money from the truck as a down payment and pay around $150-200 per month.

Any alternatives to co-signing?
define bad credit? Write off with cellphone company? Unpaid financial collection items? Legal judgements?
Deal Addict
May 16, 2009
1275 posts
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Pontiac Vibe. It's a Toyota Matrix wearing a GM badge.

Other than that, try a Nissan Versa.

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