Quick Facts About Leasing a Used Car
- It’s possible to lease a used car, and it can be more affordable than buying.
- Before leasing, understand how many miles you drive each year and only agree to mileage terms that make sense.
- Some dealerships don’t offer the option of used car leasing at all, while others lease used vehicles up to 10 years old.
If you wonder if leasing a used vehicle is possible, the quick answer is yes.
But not all dealerships offer used car leasing, so it involves patience and calling or emailing to find those who do. Offering a lease on a used vehicle can be risky because it’s difficult to know how a used car’s value may change over time.
Once you find a dealership, leasing a used car can be a great way to get behind the wheel of a newer used vehicle model. It’s typically more affordable than a new car, and many times you get a warranty with the lease vehicle when it’s certified pre-owned. You can also get more for your money, including a car with more options or a higher trim level. Read on for tips to help you decide if it’s the right move for you.
- Why Do People Lease Used Cars?
- How Many Miles Can You Put on a Leased Car?
- How To Lease a Used Car
- Is Used Car Leasing a Good Idea?
Why Do People Lease Used Cars?
Some car shoppers may turn to used car leasing after discovering that buying a new or used car is not an option due to finances, a low credit score, or affordability. It’s also for people who prefer getting into a newer vehicle without the expense of a larger car payment. The average new car transaction price reached nearly $48,000, and the average price for used cars remains around $26,100.
RELATED: Bad Credit Car Loans: Everything You Need To Know
How Many Miles Can You Put on a Leased Car?
On leased vehicles, it depends. You can select the average annual miles you think you’ll use during the duration of the used car lease. Typically, terms get set between 10,000 miles and 15,000 miles.
How To Lease a Used Car
See the steps below for leasing a used vehicle. Before leasing, it’s important to know how many miles you drive annually. Only agree to mileage terms that fit those parameters in the lease agreement.
1. Research and Know Your Options
You need to know what kind of car you want and what features are important to you. You also need to know what kind of monthly payment you can afford. That is why it is vital to do your research before shopping.
However, leasing a used car works differently than leasing a new one. The dealer will usually offer several models with additional features and prices to choose from when it comes to leasing a new car. With previously owned vehicles, much will depend on the dealership’s inventory of used, certified pre-owned vehicles, and dealership-certified models. Some dealerships don’t offer the option of used car leasing at all. Other dealerships offer opportunities to lease used vehicles up to 10 years old. For example, Honda offers such a program.
Supply chain issues and the chip shortage during the COVID-19 pandemic have impacted new and used car inventories in the past. So, finding a used car to lease may be more challenging than ever these days. For that reason, it’s imperative to know what you want before you go to the dealership. If you don’t see what you want, be willing to look at other vehicles in your price range.
PRO TIP: Bring a friend or family member with you when you go car shopping. They can help you decide and keep track of all the information.
2. Obtain a Vehicle History Report
Before you sign any paperwork, make sure you get a vehicle history report for the car. Typically supplied for free from the used car dealership, this report will tell you how many people owned the vehicle and its accident and service history. You can also ask for any service receipts for the vehicle, though the report will also list how often the car got serviced. That information can show you how well the previous owner cared for the vehicle.
If the vehicle history shows an accident in the report for the car you want, it may be best to walk away. The risk of mechanical problems down the road is just too high and defeats the purpose of meeting your transportation needs.
PRO TIP: If the dealer doesn’t offer to show you the report, you can ask them to provide one or obtain it on your own through AutoCheck and Carfax for a nominal fee. These reports help provide peace of mind when searching for your next vehicle. Just ask for the VIN (vehicle identification number) of the car. Reputable dealerships almost always will provide the report free of charge.
3. Check for the Manufacturer’s Certified Pre-Owned Program
Some manufacturers offer certified pre-owned programs for their used cars. These cars must meet specific criteria for approval and require additional warranties. If you lease a certified pre-owned car, the vehicle is less of a risk. Carefully read the fine print on the car warranty or car service contract before signing anything.
PRO TIP: Choosing to lease a used car that includes the remainder of its warranty is better than selecting a vehicle that doesn’t have that coverage. You can also compare certified pre-owned vehicles. See examples below of what automakers offer for certified pre-owned used leasing. Most CPO leases are from 24 to 36 months, though sometimes longer.
| Carmaker | Max Age |
| ~6 years | |
| Audi | ~5 years |
| BMW | ~5 years |
| Ford | ~6 years |
| Honda | ~5 years |
| Infiniti | ~5 years |
| Kia | ~10 years |
| Lexus | ~6 years |
| Mercedes-Benz | ~6 years |
| Nissan | ~6 years |
| Volvo | ~5 years |
4. Get an Independent Inspection
Safeguard your wallet by getting an independent inspection of the vehicle, especially if you’re not leasing a certified pre-owned car. This inspection from a qualified mechanic provides extra reassurance that the car is in good condition and won’t cost you down the road.
Review the inspection results and negotiate with the dealer to fix any problems before taking possession of the car. You can also walk away from the deal if it’s not acceptable.
5. Know All Your Costs
Leases for used cars typically last two to three years. Your budget should include more than the monthly payment you can afford. You must factor in taxes, car insurance, and maintenance.
Be sure to ask the dealer about all the costs and the final total, too. Ask about the monthly and down payments and any other fees required. Asking will prevent you from surprises, such as additional fees when it’s time to sign the lease agreement.
You also need to know your average annual mileage allowance and the cost of exceeding the limit. Most leases come with a mileage limit of 12,000 miles per year. If you exceed this limit, you may have to pay a fee of up to 50 cents per mile.
PRO TIP: Get a list of all fees in writing before signing the lease agreement. Don’t sign on to an extended warranty unless you really need one. Remember, leasing is temporary unless you want to do a buyback at the end.
6. Take Over a Lease Instead
If you are still interested in leasing a car that’s not entirely new, you can consider taking over an existing lease. Although this isn’t very common, it’s an option. Several websites like swapalease.com and others will facilitate a lease takeover between an original lessor and someone who wants to lease a car for an even shorter term than a traditional one.
Although it could be easier to find such a leased vehicle, it comes with its own set of issues. For one, you’ll need to be approved by the current automaker or the leasing company, and that process often takes time. You’ll also be on the hook for repairs necessary at the end of the lease, including repairing any damage done by the original driver. You’ll have to look closely at the contract to see if the lease requires any additional costs when the term ends.
READ MORE: Find out more about car leasing in our Car Leasing Guide.
Is Used Car Leasing a Good Idea?
In general, we suggest buying rather than leasing if you’re looking for a used vehicle. The process is simpler, and finding a used car for sale is far easier than a lease. Also, know that if you lease a 3-year-old vehicle without a warranty, you’ll be on the hook for any maintenance or repairs the car needs during your agreement period. This will be a problem for most drivers since they will be paying out of pocket to repair a car they don’t even own. Imagine paying to fix a house you rent, and you’ll understand why this isn’t a desirable scenario. Read more about the pros and cons of leasing.
Still, we could think of situations where leasing might be preferable to buying. For example, your finances and budget make buying anything impossible, especially because of higher interest rates. If that’s the case, do your research and know what you’re getting into before signing any paperwork. Following these tips will help you lease a used car with confidence.
