can you lease a used car

When you’re in the market for a new vehicle, leasing often comes up as a low-monthly-payment alternative to buying. But what if your budget or preferences point you toward a pre-owned model? This leads many to wonder, can you lease a used car?

The short answer is yes, it is possible. While not as common as leasing a brand-new vehicle, a used car lease is an option offered by some dealerships and financial institutions. It works similarly to a new car lease but comes with its own unique set of considerations and potential advantages.

How Does Leasing a Used Car Work?

A used car lease functions much like its new car counterpart. You’re essentially paying for the vehicle’s depreciation during the lease term, plus interest and fees. The leasing company sets a residual value—what they predict the car will be worth at the end of the lease. Your monthly payments cover the difference between the car’s current price and that future value. At the lease’s end, you simply return the car, often with the option to buy it.

The Potential Benefits of a Pre-Owned Lease

Opting for a used lease can have some appealing perks. The most significant is often a lower monthly payment compared to leasing a new version of the same model. Since the vehicle has already taken its biggest depreciation hit, the amount you’re financing is lower. This can be a great way to get into a nicer, more feature-rich car than you might otherwise afford if you were looking at new models.

What to Consider Before You Sign

It’s crucial to look before you leap. Used leases typically come with shorter terms and stricter mileage limits. You’ll also want to pay close attention to the vehicle’s warranty. Ensure it has solid factory warranty coverage remaining or that a comprehensive service contract is included to protect you from unexpected repair costs. Always have a trusted mechanic inspect the car beforehand.

Where to Find a Used Car Lease

Your primary source will be franchised dealerships for brands like Toyota, Honda, or BMW that offer certified pre-owned (CPO) programs. Some of these manufacturers have official programs for leasing their CPO vehicles, which are attractive because they include extended warranties and undergo rigorous inspections.

While leasing a used car isn’t for everyone, it presents a viable path to an affordable vehicle with lower monthly payments. By doing your homework on the car’s history and the lease’s fine print, you can make an informed decision that best fits your driving needs and budget.