How to Lease a Used Car
How to Lease a Used Car
Leasing used might be the key to a better car.
Wait, you might be asking, you can lease a used car? Yes, as surprising as it is to learn, used cars are leased just like new cars. It might even make sense for you to drive one. Here is what you need to know about leasing a used car.
The Basics Of Leasing
New or used, there are a few basics of leasing a car you need to know. It is much like renting an apartment. You get the car for a set amount of time, you pay a rent to the owner monthly, and you are expected not to trash it or use it too excessively. In the case of leases, that means you are limited in how many miles you can drive. Used car leases also make you responsible for any repairs the car will need during your time with it.
As for what you pay, that is based on the overall value of the car when you turn it back in. For any lease, that is the overall depreciation, so when leasing a new car, your lease payments are the total predicted drop in value for the car across the term of your lease. In the case of used cars, that can mean a used car lease is shockingly low, on a month to month basis, since used cars tend to depreciate quickly. That creates some new concerns.
There are a few ways that leasing a used car is different from leasing a new one. The first is that figuring out how a car depreciates gets trickier over time, so it is a question between you and the dealer of how much you think the car will be worth at the end of the lease. The better the car holds its value, the lower your lease payment. As a result, when leasing a used car, the best deal tends to be something from the more luxurious end of things, as those brand names tend to hold their value better.
Leasing used is a quick way to the keys.
You will need to treat leasing a used car as if you are buying it. Be sure to get familiar with how the car has depreciated in the past, and refer to that history when negotiating the lease. If you can point out the car you are leasing holds value well, that means a lower monthly payment for you.
The second concern is paying for repairs. New cars leased off the lot are under warranty and largely remain so for the term of their leases. Used cars? Well, the warranty might expire. So, if you are going to lease a used car, you should discuss what the warranty is and whether you should get a separate warranty to cover the car. Certified pre-owned cars tend to be slightly better on this front.
Finally, there is the issue of reliability. Treat any used car you are leasing like one you are buying. Kick the tires, examine the bits and pieces, and ask about the car’s past. If you are not satisfied, do not lease it.
If you follow that advice, it can often mean you get a great car at a perfect price. For more about buying or leasing, whether new or used, start with the research from CarFoundMe.