Things to know about used-car leasing
Leasing a car is one way to drive a new car for monthly payments that are often cheaper than those you’d make on a car loan. Of all the vehicles financed or purchased in the fourth quarter of 2018, about 29% of new vehicles were leased, according to Experian data. Only about 4% of the leasing market was made up of used cars.
Should you consider leasing a used car? We’ll go over five things to know to help you decide if the benefits outweigh the risks for your situation.
Your monthly lease payments may be less
When you lease a car, most of your monthly payments go toward the vehicle’s expected depreciation (the rate your vehicle loses value over time). A car can depreciate by 20% or more after the first year of ownership alone. Used cars tend to depreciate less swiftly than new ones, which means you’ll likely pay less each month to lease a used vehicle compared to a new one.
But the amount of your monthly payment will depend on the particular car you want to lease and your lease terms. Before you go car shopping, it’s a good idea to set a budget to figure out what you can afford to pay each month.
You should shop around
Because leasing a used car is far less common than leasing a new car, you may have to search a bit to find car dealerships that lease used vehicles.
Deciding which type of used car to lease comes down to your goal. Are you trying to lease a luxury car like a Lexus or Audi or something more standard, like a Honda Civic or Toyota Camry? Once you’ve narrowed that down, you can start calling dealers to compare leasing terms.
Be aware that many used leases will be for “certified pre-owned” vehicles. And most will have fewer than 48,000 miles, according to Edmunds.
Car dealerships aren’t the only place you can lease used cars. You can also use leasing services, like SwapALease.com or LeaseTrader, to take over a car lease from someone who wants out of theirs. Since the other person wants out, you might be able to negotiate enough concessions from the person transferring the lease to make it a better deal for you.
You’ll want to avoid “lease-here, pay-here” dealerships that lease older used vehicles. While you may be able to get a lease this way even if you have credit problems, you may have to make weekly or biweekly payments and cover high leasing charges — which can make these leases very costly.
Shop Smart Autos is not responsible for any errors in price or vehicle information provided to us from our dealer partners. We take every precaution to ensure the information is accurate and correct. Any questions please contact the dealer.
