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It may be getting easier to lease a car

Lease approvals are up slightly, and leasing is projected to remain healthy throughout this year.

By Jan 17, 2014 5:58PM

This post comes from Christine DiGangi at partner site on MSN MoneyIt can be tricky to get approved for a car lease, since they tend to be geared toward consumers with credit scores on the higher side. It goes a bit like this: As far as average credit scores of borrowers are concerned, it’s easiest to get a used car loan, but the bar is set higher for new car loans, and leases are a little more exclusive.

Mature salesman showing businessman car in showroom © Sam Jordash., Digital Vision, Getty ImagesIn December, lease credit approvals increased slightly to 73.3% from 70% in November, putting the 2013 approval rating at 72.7%, according to In 2012, it was 65.3%. Auto sales have been a pretty constant source of growth for the economy, and low interest rates in 2013 made auto loans more affordable, making it a bit easier to get one.

According to the most recent numbers from the Federal Reserve, the interest rate for a 48-month new car loan was 4.42% in November.

Despite the bump in lease approval, debt-laden consumers held it back a bit. The approvals rate on were as high as 76% in June, but a news release from the website attributed the subsequent decline to young drivers with student loans applying for leases later in the year. The numbers don’t necessarily indicate there’s less of a barrier to leases as “prior to December … less-than-ideal credit shoppers were placing stress on the approvals rate.”

Looking at the big picture — auto loans and leases combined — all brackets of credit scores were seeing increases in new accounts in 2013, according to second quarter data from Experian-Oliver Wyman Market Intelligence Reports and Experian’s IntelliView tool, the most recent data available. Subprime and near-prime loans saw the biggest jumps.

If you're considering getting an auto loan or a car lease, checking your credit scores ahead of time can help guide you in the process. A lower credit score can result in higher interest rates (as well as a higher possibility of rejection), so it's ideal to give yourself plenty of time to build your credit, if needed, before you apply for a loan or lease. There are free tools, such as's Credit Report Card, that can help you monitor your credit scores and show you which areas may need improvement. considers a 70% approval rate healthy, and the company thinks leasing will remain strong in 2014, given continued economic growth.

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Jan 21, 2014 4:52PM

It should be easier, you are only borrowing a portion of the total amount. Instead of getting approved for 30k, you get approved for 18k. Leasing is not only easier to get a loan for, it gives you options. A LOT of options. Most people think you have to give your car back to the manufacturer, but you can keep it, sell it, or trade it in as well. You can avoid depreciation, you're (most) always in the warranty periods, you get new technology every couple years, you can pre-pay payments insted of just reducing the amount owed, and best of all you get a lower monthly payment. When you lease, you will know EXACTLY what the car is worth at the end of the lease. If it depreciated too much, give it back. If it retained its value, keep it (refinance the residual balance), trade it in for equity on the next car, or sell it to make a profit.

Jan 20, 2014 7:53PM
The insurance on leased cars is higher.
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