Can You Lease A Used Car?

Dustin Hawley | Apr 08, 2021

The uncertainties brought on by the pandemic have many families rethinking their priorities and monthly expenses. Businesses have shifted to work from home arrangements, leaving many vehicles parked in driveways for well over a year now. 

can you lease a used car

For some, purchasing or leasing a new car is an unnecessary expense, especially without the usual daily commute. If you also consider that the average cost of a new car is around $37,000, it’s no surprise that used car sales have risen significantly. 

But what if you don’t want to purchase a used car and instead lease it? 

What Is A Lease?

In simplistic terms, a car lease can be defined as a long-term vehicle rental with strings attached. When compared to a financing plan, leasing can offer lower monthly payments to well-qualified customers. But the primary benefit of leasing is also its drawback - at the end of your lease term, you do not own the car.

Though leasing offers drivers the flexibility to not get locked into long-term commitments when financing their vehicle, it also doesn’t offer the type of equity that purchasing your vehicle provides. Additionally, every lease comes with a set of clauses and requirements that need to be fulfilled to avoid financial penalties. Regardless, a lease can offer many other benefits that may be appealing to drivers with specific wants or needs.

How To Lease A Used Car

To address this article’s primary subject, the short answer to the question at hand is yes; you can lease a used car. In fact, leasing a used car is a well-kept secret among car dealerships. 

With reduced profit margins, salespeople prefer to sell used cars for cash and lease new vehicles instead. Leasing a used car is similar to leasing a new one, but with some additional steps and restrictions.

Authorized dealerships offer leases almost exclusively on certified pre-owned vehicles. A certified pre-owned vehicle is one that was originally sold by the dealership, is no more than five years old, and has less than 50,000 miles on the odometer. After being bought or leased brand new, these vehicles become available once they are traded in or their contracts expire.

If you are interested in potentially leasing a certified pre-owned vehicle, make an inquiry over the phone or visit the dealership in person to discuss your options.

Research Car Prices

Before signing any contracts, it’s essential to research the value of the car in question. You’ll need to know the leasing price for both the brand new and used model and an estimate of how much it will be worth at the end of your leasing agreement.

Lease Rates

To understand how the dealership calculates interest rates for leases, remember these two factors:

  • Cars depreciate over time.
  • The dealership needs to make a profit.

An additional factor to keep in mind is that finance rates are typically much higher for used cars than brand new vehicles, but if you check around, you may be able to find a dealership that offers similar or equal rates.

Benefits Of Leasing A Used Car

One of the benefits of leasing a used car is its affordability. From initial investment costs to the monthly rate, leasing a used car is often very affordable, which may offer you the ability to get a car a class higher than otherwise possible. Or perhaps a vehicle that has more features and equipment than a new economy car despite being a few years old.

Another benefit of leasing a used car is the same as leasing a new one; limited commitment. Dealerships can set you up with a lease period that matches your needs, and once the leasing period expires, you have no further obligations to the car. However, if you want to maintain that commitment, you will likely have options. The dealership will offer to sell you the vehicle at the end of your lease contract or even continue the lease (usually at a much better rate). 

When leasing a used car, the warranty has most likely expired, and the burden of keeping the vehicle in pristine condition and working order falls entirely on the lessee. The upside is that most used cars do not have a mileage limit, so if you plan on traveling a lot, it’s a better option than leasing a new one. 

Drawbacks Of Leasing A Used Car

While there are many benefits to leasing a used vehicle, the process isn’t bereft of drawbacks. When you lease a car, you’re essentially just renting the vehicle. Buying a second-hand vehicle could be cheaper in the long run, but you are still required to pay for acquisition fees, deposit, warranty policy, and additional insurance upfront. 

Additionally, maintenance costs can be expensive, and leased vehicles have to be kept in pristine condition while only being serviced by certified mechanic shops. 

Summary

Leasing a used car is an excellent way of getting a well-maintained and relatively new vehicle for an affordable price. It can often be more cost-effective than leasing a new car, and a lot of major dealerships have certified pre-owned cars available. Be sure to contact your local dealership and inquire about options for leasing a used car.

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