Bad credit lowers the chances of getting a car loan, and almost eliminates the possibility for a car lease. Both lending and leasing organizations prefer avoiding high-risk clients and so will significantly restrict the regulations of both loans and lease if you have bad credit.
If you have a bad credit score, a car loan will mean high-interest rates for you. However, a car loan will still be a possible solution since the bank or the lender in case of a failure to repay the loan will use your vehicle as collateral. Besides that, the loan term and conditions might also be altered not in your favor. But the important fact is that a new car loan is possible with bad credit.
When it comes to car leasing, you will have significant restrictions. Most leasing companies will not consider bad credit candidates as their clients for a simple reason; whenever you loan a car, the bank or the lender can repossess your car and hence cover up the missing payments. In case of a lease, the leasing company has no such control, and in instances where you fail to pay the lease, they will have no options to get their money. This is why, leasing a car with bad credit is extremely complicated; and even if some company agrees to do so, be ready that you will be facing much higher monthly payments, a lot of car usage limitations, and a longer list of additional fees.
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