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What you need to know when leasing a car after bankruptcy

How soon can you get a car lease? Or should you consider subscriptions?
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  • There isn't a specific waiting period to lease a car after bankruptcy, but getting approved for credit may be challenging soon after declaring bankruptcy.
  • A bankruptcy will likely lower your credit score severely, and you'll need to build up favourable credit history over time.
  • Car subscription has become a popular alternative to car leasing, as it offers more flexibility and convenience.

Bankruptcy is a complex and stressful experience that can have long-lasting effects on a person's financial well-being.

The ability to take out credit, especially for larger purchases like a car, is severely limited which puts even a larger burden on you. 

Whether you're in the process of recovering from bankruptcy or simply looking for a better understanding of your options, read on to learn more about what it takes to lease a car after bankruptcy.

How long after bankruptcy can a car be leased?

The short answer is that there isn't a specific waiting period before you can apply for credit or car finance. However, it's important to remember that getting approved for credit may be challenging soon after you’ve declared bankruptcy.

If it's been less than a year since your bankruptcy, it's possible that your credit rating hasn't had enough time to recover.

To avoid damaging your credit rating even further, it might be best to hold off on applying for a lease deal during this time. Keep in mind that rejected credit applications can hurt your credit score.

When you get to a point where you think you can apply for a lease, you will probably be asked if you’ve declared bankruptcy in the past. You should answer truthfully as as not doing so could lead to automatic rejection.

Factors to consider when leasing a car after bankruptcy

Leasing a car after bankruptcy can be challenging, but it's not impossible. Here are the key considerations:

Credit score and history

A bankruptcy will likely lower your credit score severely. The lower your credit score is, the fewer options you have for borrowing money or qualifying for credit options.

But how exactly does bankruptcy affect your credit score? Hard to say as this depends on the credit reference agency and your personal circumstances. However, our research shows that some people’s scores were lowered by up to 15%-20% of their total score. 

The metric to look at more closely is your spending and affordability after the bankruptcy, as lenders would more likely look at your history rather than a basic score. This is very important, considering bankruptcy stays on your credit report for 6 years. 

Income and budget

You should only lease a car if you can afford the monthly payments and other costs, such as insurance, maintenance and fuel. 

Factor these payments into your monthly budget and ensure a small buffer of disposable income is still available to cover unexpected expenses.

After bankruptcy, it's also essential to have evidence of a stable source of income. With it, you can demonstrate to leasing companies that you can afford to make monthly lease payments.

If you want to know exactly how much you’re paying for your car every month,  you may want to consider car subscriptions. You pay one flat monthly fee with all expenses included in the price - insurance, MOT, maintenance, tyres, roadside assistance - and no surprises! More on this is below.


If you have cash ready to put forward for a car lease, that’s a very good sign! 

Like with other forms of credit, the more you put towards it upfront, the less you will owe on interest, and your monthly payments will be smaller. 

If you can demonstrate to a lender that you have a solid credit history and approach them with a high deposit, you are more likely to get a favourable decision. 

The leasing company

Not all leasing companies have the exact requirements for car leasing after bankruptcy. You should shop for different leasing companies and compare their offers, terms and conditions. 

Depending on their policies and criteria, some leasing companies may require a higher or lower deposit than others. There's always the option to voluntary terminate the lease agreement too but should be carefully planned.

A stack of pound coins.

Tips for leasing a car after bankruptcy

Here are our quick tips for getting started with a lease:

Give yourself some time

Wait for as long as you can to build up your credit score again, save money for any necessary down payments, and take other measures to improve your finances after bankruptcy. 

This can help you increase your chances of getting approved for a lease with better terms and lower interest rates.

Check your credit history

Check your credit report for any errors or discrepancies and dispute them if necessary. This is a good habit to get into even if you haven’t gone through bankruptcy. 

Be aware of your credit score and how it affects your leasing options. A higher credit score may help you get approved for a lease with a lower deposit or a lower interest rate. A lower credit score may mean you have to pay a higher deposit or a higher interest rate

Seek professional debt advice

If you are unsure about your leasing options or need help with your budget, you can seek advice from a reputable source, such as a debt charity or a financial adviser. They can help you understand your rights and responsibilities and guide you through your car leasing options. 

Car subscription: A flexible alternative to leasing

In recent years, car subscription has become a popular alternative to car leasing, with companies like elmo and Onto leading the charge. 

Getting approved for a car on a subscription basis could be much easier than applying for multi-year-long car finance.

Car subscriptions offer more flexibility than car finance, as you can usually change or cancel your subscription at any time (with a month’s notice to the provider), without being tied to a long-term contract or commitment. You can also swap to different cars at any time, moving up or down a range. 

The biggest advantage of vehicle subscriptions is that they offer more convenience than car finance, as you don’t have to worry about arranging or paying for things like insurance, road tax, servicing, maintenance or breakdown cover, as they are usually included in the subscription fee. 

You also don’t have to deal with the hassle of selling or trading in your car when you want a new one. 

And, as mentioned above, car subscriptions are easier to budget for than leasing. This is because you pay a fixed monthly fee that covers all the costs of using the car, except for fuel. 

You don’t have to worry about hidden fees, interest rates, depreciation or balloon payments that may come with car finance. Check out our guide on car subscription requirements.

Also, getting approved for a car subscription usually happens within the day, depending on the provider. And you can get your chosen car delivered within seven days!

Browse all cars available on subscription

There are hundreds of cars available via UK subscription companies.

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