Bad credit borrowers often ask someone to co-sign an auto lease because they cannot qualify on their own, but finding another party to guarantee your lease doesn't mean the dealer automatically approves your loan. Your co-signer needs to meet all of the requirements of a normal borrower. Thus, you should only ask a person with excellent credit to co-sign a loan.
Identification
Ideally, your co-signer should have a credit score in the highest tier -- above a 760 for most lenders. An average -- at least a 620 -- to above average credit score might suffice for an auto dealer. However, you never know the cutoff point for a lender, so adding a co-signer with the best credit score possible gives you the best chance at an auto lease approval.
Considerations
While car dealers weigh credit scores heavily in their auto lease decisions, they are not the only factor. A co-signer with a high credit score and excessive debt can be just as bad as a co-signer with a poor credit score. In general, a co-signer's monthly debt charges should never exceed more than 35 to 55 percent of his monthly income.
Alternative
Bad credit does not preclude you from acquiring an auto lease on your own. Auto dealers may overlook poor credit if you offer a substantial security deposit on the lease or pay for several months upfront. Alternatively, the auto dealer might just increase the cost of your lease. This is the least desirable option because you always want to pay as little as possible for any leased or borrowed goods.
Warning
If you decide to ask someone to co-sign your auto lease, make sure he knows the risks involved. Auto dealers often report leases to the credit reporting bureaus, so late payments on your part could drag down both of your scores. Should you end up defaulting on the lease entirely, the dealer could go after the co-signer for the outstanding balance.
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