Here is the question, can you lease a used car?
Yes, you can lease a used car. If you want a car with a low monthly payment that you’ll only keep for a few years, used-car leasing might be the best option for you.
It offers a nearly brand-new vehicle at a cut-rate price, which can be very alluring. The biggest drawback is that leasing is frequently more expensive over time than simply purchasing a used car.
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Table of Contents
What Is A Lease?
A car lease can be summed up simply as a long-term vehicle rental with conditions. Leasing can provide qualified customers with lower monthly payments than a financing plan. The main disadvantage of leasing is that you do not own the car when your lease term is over.
Leasing doesn’t provide the same level of equity as buying a car does, even though it gives drivers the freedom to avoid being tied down to lengthy commitments when financing their car. Every lease also has a set of conditions and demands that must be met in order to avoid paying financial penalties. Despite this, there are a lot of additional advantages that a lease may provide for drivers with particular requirements or desires.
Leasing A Used Car Is It A Wise Decision?
It depends. Leasing a used car is smart because you can probably get a lower monthly payment than you would with a new-car purchase or lease, but if you intend to keep the car after the lease period is over, it might be preferable to buy it from the start.
“If you want to keep a car for five or six years, it makes sense to buy it, but if you want to drive it only two to three years, leasing is probably the way to go,” says Scot Hall is the operations executive vice president at Swapalease.com.
The advantages and disadvantages of used-car leasing are discussed in more detail below.
Facts About Used Car Leasing
Most manufacturers restrict leasing to pre-owned cars that are certified. What makes used and certified pre-owned cars different from each other? Less than 4 model years old and with less than 48,000 miles on them are generally the requirements for CPO vehicles that are available for leasing. As a result, the only dealerships that offer certified pre-owned vehicles are franchised dealerships, so if you’d like to lease one, you’ll need to go there.
The list of automakers that are rumored to offer CPO leasing, according to the National Automobile Dealers Association (NADA), includes Acura, Audi, BMW, Chrysler, Dodge, Ferrari, FIAT, Honda, Hyundai, INFINITI, Jeep, Kia, Lexus, Lincoln, Mazda, Mercedes-Benz, MINI, Mitsubishi, Nissan, Porsche, RAM, Toyota, Volkswagen, and Volvo.
Pros And Cons Of Leasing A Used Car
Pros
Lower payment: Compared to leasing or purchasing a new car, leasing a used car typically entails lower monthly payments.
Nicer car: Instead of leasing or purchasing the most recent model, you might be able to afford a nicer car or a higher trim level by leasing a vehicle that is a few years old.
Longer warranty: Other used cars lack the manufacturer’s warranty that a CPO vehicle does.
Cons
Higher interest rate: For a lease, used cars typically have a higher money factor than new cars. Manufacturers do occasionally offer used lease deals, but usually only for luxury brands.
Wear and tear: Although CPO vehicles have undergone a manufacturer inspection, they are still used vehicles and will have some signs of wear and tear. They might also be outdated in terms of technology or safety features.
Maintenance costs: You might need to pay for some maintenance out of pocket because CPO warranties don’t cover things like brake pads and tires.
Limited inventory: There aren’t many places that advertise used-car leasing, so you probably won’t see any of it.
How Does Leasing A Used Car Work?
Typically, certified pre-owned (CPO) vehicles with less than 4 years old and 48,000 miles on the odometer are available for lease from dealerships.
Leases for pre-owned vehicles have the same fundamental format as leases for brand-new vehicles. The difference between the vehicle’s sales price and residual value will be used by the lender to calculate the vehicle’s residual value and the payments. The residual values of cars differ since they depreciate at different rates. In most cases, the lender will be an automaker’s “captive” financing company: Consider Toyota Financial at a Toyota dealership.
A money factor, which is essentially the interest rate, will be assigned to the deal by the lender writing the lease. That is equivalent to a standard lease. Additionally, the money factor will probably be higher than in a new car lease, just as interest rates on used car loans tend to be higher. However, the lower sales price and lower depreciation rate are typically combined with the higher money factor to produce a lower overall payment. Just like with new cars, customers who lease used cars have the option to purchase the vehicle at the end of the lease.
In the twelve years I’ve been selling and leasing cars, I’ve seen customers reduce their monthly payments by anywhere between $40 and $125 by leasing used cars. I used to work at auto dealerships that offered common, everyday vehicles. There may be greater savings for those looking to lease used luxury vehicles.
A note of caution: You may hear about used leases from independent “Buy Here, Pay Here” dealers. Such leases frequently have numerous restrictions, so you should carefully read the terms. Additionally, specialty car lots that sell exotic, ultra-luxury, or vintage vehicles might provide internal used-car leases.
This tale primarily focuses on used leasing as it is managed by franchised dealers. Only they are capable of providing genuine certified pre-owned cars.
You may want to know if can you drive without a catalytic converter.
Does Toyota Provide Leasing For Used Cars?
On qualified Toyota Certified vehicles, Toyota does indeed offer 24 to 60 month lease terms. At the end of the lease, you even have the choice to purchase the vehicle. The majority of Lexington drivers discover that they pay less up front and have lower monthly payments than a conventional finance plan, making it a great way to maximize your funds. However, keep in mind that you must adhere to the program’s requirements and monitor your mileage as well as wear and tear.
Ways To Lease A Used Car
Call The Lender
If there’s a car you’ve had your eye on, try calling the captive lender for that manufacturer to see if it offers leases on used CPO cars. You should be able to find the customer service number by searching the brand’s name followed by “finance phone number.” For instance, a customer calling Toyota Financial would like to lease a used Toyota Camry.
Have a benchmark: You need to have something to compare a used car lease to in order to determine whether it is a good deal or not. Get a lease quote if you don’t already have one for a new model of the car you want. You can begin looking for a used car lease once you have that benchmark in your possession.
Find The Car
You can find the ideal used car using a variety of tools on Edmunds. Remember to focus on certified pre-owned vehicles when searching for the model in which you are most interested. You might have trouble finding your preferred color scheme or feature combination because you’re shopping in the used market. Choose a few from various dealers, and exercise flexibility. You will then have options if the first one is unable to assist.
Find a dealer who will make the deal: Since used-car leasing is unusual, it may take some time and persistence to find a dealership that can assist you. To find one that will handle these lease deals, you might need to call a few.
Contact a sales manager or internet manager as soon as you find a car you like by phone. Imagine you’ve found a CPO car in stock and are wondering if you can lease it. If you get a quick “No,” don’t be afraid to ask the manager to check with a higher-up to confirm. The person you speak to might not be aware of the possibility because used leases are still relatively uncommon. If the manager says he needs to call you back, don’t be shocked.
Change to the next choice on your list if you are having no luck.
Get A Price Quote
When you locate a dealership that is prepared to provide used-vehicle leases, request a price estimate. Apply the Edmunds appraisal calculator to determine a fair purchase price. It will show you the dealer’s retail CPO value. If you want to buy the car when your lease is up, get the residual value. Determine the total monthly payment, including taxes and fees, as well as the total down payment.
Compare Again
Compare the lease price for a used car to the cost of a new one. It might be time to schedule a test drive and possibly even finalize your deal if the savings are good.
Conclusion
Leasing a used car is a great way to get a reasonably priced, well-maintained, and recently-produced vehicle. Numerous significant dealerships offer certified pre-owned vehicles, and it can frequently be more affordable than leasing a new vehicle. Make sure to speak with your neighborhood dealership to learn more about options for leasing a used vehicle.
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