How Does Leasing a Vehicle Affect Your Credit?

If you are in the market for a new car but aren’t ready to commit, leasing at Kearny Mesa Chrysler Dodge Jeep® RAM is a great option. Leasing is essentially paying to rent a vehicle and returning it, trading it in, or buying it at the end of the term. There are many benefits to leasing, including improving your credit score. Learn about how a leasing credit agreement can be a smart financial move.

How Leasing Benefits Credit Scores

When leasing RAM trucks for sale, drivers make payments for a set period, typically between 24 and 48 months. Just as with car loans and other financial obligations, timely payments are looked at favorably by credit bureaus.

Over time, drivers will notice their credit scores improve. A high credit score means lower interest rates on future car loans and other large purchases.

Negative Impacts of Leasing

When you first lease a vehicle, there will be a slight dip in your score due to the new line of credit. This will be quickly recovered by on-time payments.

However, missing just one payment can cause a short-term hit and missing multiple payments can reduce your credit score. Furthermore, the lessor is entitled to repossess the vehicle for non-payment.

Reasons to Lease vs. Buy

Leasing is an excellent option for shoppers that love new cars with updated technology, as they’ll be able to upgrade their vehicle every couple of years. Payments tend to be more affordable than with finance loans and a down payment is not always necessary.

If there’s a problem with your vehicle, it is usually covered with no out-of-pocket costs.

If you’re ready to begin the leasing process, meet with a Jeep dealer near San Diego to pick out a model and drive home today. We hope to see you soon at Kearny Mesa Chrysler Dodge Jeep RAM!