Does Car Leasing Affect Credit Score?
Rebuilding your credit after a financial setback can be tough. It’s hard to find a lender who will give you a chance, and even harder to get one with rates that won’t drive you into bankruptcy. Fortunately, there is a Los Angeles finance leader who can help you rebuild your credit for less with an affordable lease on a Toyota you’ll love.
How Do Car Leases Work?
When you lease a vehicle, you’re financing only the difference in the vehicle’s value now and at the end of the lease term. For example, if you’re considering a three-year lease of a vehicle with a $25,000 MSRP whose value will be $18,000 at the end of the lease term, your payments will be based on that $7,000 depreciation, as well as other fees.
You’ll also pay mileage fees if you travel more than the contracted mileage during the time you have the vehicle. For example, if you live in Burbank and drive to West Hollywood daily, you’re likely to drive fewer than the 15,000 miles typical of a lease contract. But, if you regularly make the trip from Glendale to San Francisco, you could pay over-mileage fees at the end of your lease term and should factor that into your costs.
Car Lease Requirements
Each lease is different, of course, tailored to your needs and any special offers available at the time of signing, but a typical lease should require the following:
- A Down Payment
- Your First Month’s Payment
- An Acquisition Fee
- Refundable Security Deposit
- Tax, Title, and Licensing Fees
Of course, if you have less than perfect credit, other fees might be necessary to help smooth the way for your next vehicle lease.
Building Credit with Car Leases
Building your credit with a car lease can be incredibly beneficial because it serves multiple purposes: It gets you into a better car for less, it can improve your credit score, so you pay even less for your vehicle in the future. To give yourself a better chance at being approved, try using these tricks:
- Bring a Larger Down Payment
- Supply a Co-Signer
- Show Proof of Income
- Give the Dealer Personal References
- Choose an Inexpensive Car
- Consider a Lease Takeover
Learn More About Vehicle Leasing
To learn more about the leases available to help you enjoy a more relaxing North Hollywood drive, or to explore the ways a low-cost lease can help you rebuild your credit, contact the experts at Toyota of Hollywood today.
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