Leasing a Used Car: Is It Possible?
I am a serial entrepreneur and a consumer advocate. When I’m not helping car buyers, I love working on ventures that have a positive impact.
I run a cause marketing agency and serve on the board of Vayu Global Health where we are disrupting the medical industry and preventing the needless deaths of mothers and babies during childbirth.
Leasing a car is a great way to get access to brand-new vehicles every few years, but did you know that it is possible to lease used cars?
Many people do not realize that used car leases exist, let alone the benefits they can offer.
Today, we’ll dive deeper into the secret of leasing a used car. Here’s what you need to know:
Table of Contents
Can You Lease a Used Car?
The majority of leased vehicles are brand new, leading many people to think that it’s only possible to lease new cars. While they are rare, used car leases do exist! It’s possible to lease a certified pre-owned vehicle from a dealer. The other option is to take over another person’s lease.
Advantages of Leasing a Used Car
While it may sound unusual, there are some key benefits to leasing a used car:
Lower Monthly Payments
The majority of a monthly lease fee goes toward the vehicle’s depreciation. New cars depreciate the fastest, and used cars depreciate much slower. Leasing a used vehicle means you can expect significantly lower monthly payments.
Affordable Luxury Vehicles
If you’re interested in a luxury vehicle that you can’t afford to own, a lease may be a good idea. Used car leases are ideal for high-end vehicles that retain their value well. With a used car lease, you can get access to high-end vehicles for an affordable monthly payment.
Trade-in Without Selling
Selling a used car can be a hassle, and trading into a dealer isn’t often the best deal. A lease makes it easy for you to trade in the car for something else without selling it. This is an especially good benefit if you are interested in buying a car in a few years but plan to lease while saving up.
Disadvantages of Leasing a Used Car
Hard to Find
Used car leasing is not as common as new car leases. Not all dealerships will offer leasing for used cars, so you will have to look around to find options. Dealerships that do offer used car leasing typically do so for certified pre-owned vehicles with fewer than 48,000 miles, so be sure to find out the details of the used car leases as you shop around.
Difficult to Determine Leasing Costs
Leases are based on the residual value of the car at the end of the lease. Determining the estimated value of the vehicle at the end of the lease can be tricky when it’s used.
Out of Warranty
The chances are that the used car will no longer be under manufacturer warranty, or that the warranty will expire before the lease ends. This means you would need to pay for any repairs after the warranty. However, you may be able to avoid this with a certified pre-owned vehicle that includes a warranty from the dealership, or you can buy an extended warranty.
You Won’t Own the Car
Even though a used car lease may be less expensive than a new car lease, you still will not own the vehicle at the end of the lease. In some cases, it may make more sense to finance the used car than it does to lease it.
Older Cars are More Prone to Issues
It’s no secret that cars tend to deal with issues as they age. There’s a higher chance of leaks, strange noises, and other issues when leasing a used car. You must be prepared to deal with more repairs and trips to the shop when leasing a car that already has miles on it.
Missing the New Car Feel
One of the biggest advantages of leasing is the ability to drive the newest cars with the best technology and upgrade at the end of each lease. With a used car lease, you are completely missing the new vehicle benefit.
How to Lease a Used Car
Here are the steps you can take to lease a used car:
#1. Check for Used Car Leases
If you have a manufacturer in mind, call the lender to inquire about certified pre-owned vehicles available to lease. You can repeat the process for multiple companies if you are open to different manufacturers. It also helps to know key questions to ask when leasing a car.
#2. Compare the New vs. Used Lease
Compare the cost of leasing the current year model with the used car lease. Lower-cost vehicles tend to be nearly the same cost to lease used and new. On the other hand, higher-end vehicles may be significantly cheaper to lease used. You’ll want to know the price difference to make an informed decision.
#3. Locate the Vehicle
Use online tools to help you search for the right vehicle. Keep in mind that there are not as many options for used leases. Look for certified preowned vehicles that are 2-3 years old. You may not be able to find the colors or exact features you want. Find a few from different dealers.
#4. Find a Willing Dealer
Once you find a vehicle you’re interested in, give the manager a call. Ask if it is possible to lease the pre-owned vehicle that you like. If the manager says no, try asking for a higher-up for confirmation. Used vehicle leases are rare, so you may have to call a few dealerships.
#5. Get a Quote
After you find a willing dealership, then ask for a price quote. Ensure you are getting a fair deal by assessing the residual value at the end of the lease based on market information. Compare the quote once again to the new-car lease to ensure the deal makes sense.
#6. Test Drive and Inspection
Always test drive the vehicle before leasing. Pay close attention to any noises or other unusual things. If you notice anything, bring it up before signing the lease. If possible, have a third-party mechanic inspect the car so that you can agree on a fair price based on the vehicle's true condition.
Protecting a Used Car Lease
When leasing a new car, it’s still essential to protect the car. You will be charged for any excessive wear and tear. One of the best ways to protect the used car lease is with an extended warranty. Since most used cars are out of warranty (or will be during the lease) consider purchasing an extended warranty.
Other Options for Leasing Used Car
Leasing a used car from the dealer is not the only option. Some alternatives for leasing a used car are:
- Online Lease Swap. Take over an existing lease with an online lease swap. This can also help you get a short-term lease as well because you are taking over whatever remains on the original lessee’s lease. Examples of online lease swap sites include SwapALease, LeaseTrader, and LeaseQuit.com
- Finance the Used Car. It may make more sense financially to buy the car than it does to lease it. Compare the cost of purchasing the used vehicle to leasing.
- Lease a New Car. As mentioned, it may not be significantly cheaper to lease a used car if it is relatively low value. If you aren’t looking at luxury vehicles anyway, consider leasing new.
