Can I lease a Lexus with a 650 credit score?
Most of the best car leasing deals from dealerships require a 700 or above credit score to qualify for a lease. With your credit score at 650, you risk paying too much to lease a car that could be put into savings to buy a car instead.
Typically, the minimum credit score needed for leasing a vehicle is 700.
According to NerdWallet, the exact credit score you need to lease a car varies from dealership to dealership. The typical minimum for most dealerships is 620. A score between 620 and 679 is near ideal and a score between 680 and 739 is considered ideal by most automotive dealerships.
You may need good to excellent credit to qualify for a loan through Lexus Financial Services. The weighted average FICO scores of those who got loans through Toyota Motor Corporation in 2020 was 731, according to the June 2021 Toyota Financial Services investor presentation.
Even though there's no official minimum score, most vehicle leasing companies accept a score of 680 or higher. The higher you boost your score, the better deal you'll be able to get. It's not out of the question to get approved for a lease with bad credit, but it can be costly.
Benefits of Leasing A New Lexus
Lease programs typically require a minimal investment up front, such as your first payment + tax, DMV fees and dealer documentation fee. This might be good fit for you, if you don't have the cash on hand to make a large down payment as it's typical in a installment loan1.
Credit scores range from 300 to 850. A rating under 620 is classified as “subprime”. The minimum credit score required for leasing most vehicles is 700, generally speaking.
If you have a 650 credit score you may be eligible for a loan but you might not get a favorable interest rate yet. With a credit rating of 600 to 650, the interest rate can be as high as 25-30%. In that case, you must make a down payment of at least 20% of the total amount.
You can borrow as much as $40,000 - $100,000+ with a 650 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.
As someone with a 650 credit score, you are firmly in the “fair” territory of credit. You can usually qualify for financial products like a mortgage or car loan, but you will likely pay higher interest rates than someone with a better credit score. The "good" credit range starts at 690.
Can I lease a Lexus with a 700 credit score?
A credit score of 700 or above can get good car lease offers. Lenders also consider income and other factors.
Is Lexus a Luxury Car? Is Lexus a luxury car? The answer is yes — Lexus is the luxury brand of Toyota. That means that Lexus models maintain the reliability of Toyota vehicles while demonstrating true luxury like Mercedes-Benz, BMW, and other luxury auto brands.
A competitive lessee or well-qualified buyer generally refers to an individual with a Tier 1 credit score. As you can probably deduce, a Tier 1 credit score is a very good credit score. It typically refers to a score of 720 or higher.
There isn't a universally agreed credit score to qualify for a car lease but auto leasing companies will typically treat FICO scores of 700 or better as “good”. FICO defines a “good” score as ranging from 670 to 739. 670 is usually considered the minimum credit score you need to secure a vehicle lease.
Leasing can be more difficult than buying if your credit needs some work. In both cases, however, you'll qualify for the best terms with a credit score of 700 or higher. What's your budget? If you can't afford to buy a new car, leasing could be a cheaper alternative.
Leasing a car with bad credit can mean higher rates. To get decent leasing rates or offers, you typically need a prime credit score of at least 661. If you have bad credit, you can look into co-signers, larger down payments, decreasing your debt-to-income ratio or shopping around to negotiate a better lease.
1) When a New Model Comes Out: According to Realcartips.com, generally, the best time to lease a car is shortly after the model is introduced. That's when the residual value will be the highest - meaning you'll likely save money on the depreciation cost.
| Lease | Finance | Cash |
|---|---|---|
| 63% | 7% | 30% |
Leasing a car means you'll have lower monthly payments and you can typically drive a vehicle that may be more expensive than you could afford to buy. On the other hand, if you decide to buy a car, you'll own it in the end, even if it means you'll pay a higher monthly loan payment in the meantime.
It will be difficult to lease a new car with a credit score in the 500 range. If you put down a significant down payment or find a co-signer for your lease, you'll have a better chance of getting approved.
Will leasing a car hurt my credit?
Even after you complete the lease, positive payment history can remain on your credit reports for 10 years. A car lease can also hurt your credit, however, if you miss a payment for 30 days or longer or you default on the lease agreement altogether.
If you have a credit rating that ranges from 599 to 699, you are categorized as a “subprime” credit holder. Individuals within this category are often able to qualify for a lease, but will be required to make an additional down payment and will have an increased monthly rate.
It's essential to be knowledgeable about how your auto loan process will be different than someone with a higher score. You might not have the same options, but you can still get an auto loan with a 600 credit score.
Tesla doesn't list a minimum credit score to be approved for financing, however, typically your shot of being approved will increase if your score is in the 600s or better. It could be possible with a 500 score still, though not as likely.
| Credit score | Average APR, new car | Average APR, used car |
|---|---|---|
| Prime: 661-780. | 7.01%. | 9.73%. |
| Nonprime: 601-660. | 9.60%. | 14.12%. |
| Subprime: 501-600. | 12.28%. | 18.89%. |
| Deep subprime: 300-500. | 14.78%. | 21.55%. |
