Can You Lease a Used Car?

Yes, you can lease a used car.

If you're looking for lower monthly payments and want more flexibility, leasing a used car could be a great option for you. Leasing used lets you drive a fancier ride for less cash per month compared to buying used. When the lease is up, you just hand over the keys instead of owning it. But be sure to give it a thorough check before signing, and go over the fine print carefully. That way you can avoid extra charges for too many miles, wear and tear, or ending the lease early. And note that you may be locked into the lease for at least 36 months. While leasing used can make sense for the right budget and situation, you’ll want to weigh the pros and cons versus buying used.

Leasing a car can get you driving a nicer ride for less money upfront, but know that new car leases typically have higher monthly payments, lower mileage limits, and less wear and tear allowed, while used car leases offer more flexibility on miles and condition but the cars are older models with limited warranties. Carefully consider your budget, preferences for latest models versus saving money, and driving habits as you decide between leasing new or used.

Leasing a new car

• Pros: You get to drive a brand new car, often with the latest technology and features. The warranty typically covers the duration of the lease, reducing your exposure to repair costs. Additionally, new cars usually have lower interest rates.
• Cons: Monthly payments can be higher compared to leasing a used car. Also, since you don't own the car, you won't build any equity.

Leasing a used car

• Pros: Lower monthly payments and down payment. It's also possible to lease a higher-end used car for the same cost as a new lower-end car.
• Cons: Higher interest rates and shorter warranties. There's also a greater risk of maintenance and repair issues.

Lease swap

A lease swap involves taking over someone else's lease contract.

• Pros: You can avoid paying a down payment and might benefit from lower monthly payments if the original lessee negotiated a good deal or put down a significant deposit.
• Cons: The vehicle's condition and mileage could be unknown factors. You may also have to pay transfer fees.

Ultimately, your decision should align with your financial situation, driving habits, and personal preferences.

Leasing used can provide affordability and flexibility, but read the contract carefully and get a thorough inspection to avoid extra fees and repair costs. Here are some of the main pros and cons of leasing a used car:

Pros of leasing a used car:

• Lower monthly payments: Since used cars have already depreciated significantly, leasing one can lower your monthly payments compared to leasing new.
• Drive a nicer car: You may be able to lease a used luxury or specialty car that you couldn't afford to buy or lease new.
• Less long-term commitment: Used car lease terms are typically shorter than new car leases, often 24-36 months.
• Potentially cheaper insurance: Insuring a used leased car may cost less than insuring a new leased car.

Cons of leasing a used car: 

• Limited warranty coverage: Used cars usually have little to no warranty left, so you'll pay for any repairs.
• Excess wear and tear fees: These fees can add up with an older used car if you go over mileage limits or return the car with damage.
• Fewer tech features: Used cars may lack some newer tech and safety features found in new cars.
• Interest rates may be higher: Lenders sometimes charge a higher interest rate for used car leases compared to new.

Step 1: Find different leasing options

• Research used car dealerships in your area that offer leasing. Many will have a section of their website dedicated to used car leasing or certified pre-owned leases.
• You can also search online leasing aggregators like Swapalease and LeaseTrader, which let individuals list their leased cars for transfer to another person.
• Consider leasing through the manufacturer's certified pre-owned (CPO) program if they offer leasing on CPO vehicles.

Step 2: Compare terms and conditions

• Compare lease terms (length, mileage allowance, disposition fee) and monthly payments across different dealers and listings. 
• Make sure you understand any conditions around wear and tear or maximum mileage to avoid end of lease penalties.
• Find out if there are any manufacturer incentives or special offers that can help lower your payments.

Step 3: Check vehicle history 

• Obtain a vehicle history report to check for any issues or red flags with the specific used vehicle.
• Have the car inspected by an independent mechanic before signing a lease to identify any problems.

Step 4: Finalize the lease

• If buying from a dealer, negotiate the monthly payment terms and see if they can apply any additional discounts.
• Review the full lease agreement carefully before signing.
• Pay any required upfront costs like the first month's payment, security deposit, acquisition fee, etc.
• Make sure the registration and title gets transferred properly into your name.

Step 5: Maintain the vehicle

• Follow the maintenance schedule and keep records for any repairs done.
• Return the car clean and undamaged to avoid excess wear and tear fees.
• Stick to the agreed mileage limits to avoid per mile overage charges.

Can you lease a used car from a dealership?

Yes, leasing a used car from a dealership is definitely possible and can be a great way to get into a car with lower monthly payments. Most dealerships will have certified pre-owned vehicles available for lease with extended warranty coverage to give you extra peace of mind. The process works similarly to leasing new, but you'll likely have shorter lease terms of 2-3 years and lower mileage limits. 

It's key to negotiate the monthly payment and residual value, inspect the car thoroughly, and review the full lease agreement before signing. While you won't have a new car with a full manufacturer's warranty, leasing used can provide an affordable way to drive a nicer late-model car while avoiding a large down payment. Just be sure to budget carefully for the lower mileage limits and lack of purchase option at lease end.

The dealership route likely remains the most common and straightforward, but these alternatives provide additional flexibility and options worth considering if you're set on leasing used. Taking over someone else's lease transfer often provides the best terms and lowest payments.

For more flexibility beyond the dealership, here are other creative options for you to consider when leasing a used car.

Car subscription from FINN

Driving should be an adventure, not a hassle. Skip the stress of used car buying and leasing and instead embrace the freedom of subscribing to your dream wheels. FINN makes it easy to get the car you want without the strings of ownership. Your car will be delivered right to your door and one monthly fee covers maintenance, insurance, and roadside assistance. When your term is up, FINN allows you to switch to a new vehicle seamlessly. No negotiations or hidden fees. Just affordable access to the car that perfectly fits your life. Let FINN take the wheel and show you how joyful driving can be again.

Peer-to-peer car sharing

Peer-to-peer car sharing platforms allow regular people to list their personal cars for rent. You could essentially "lease" a used car from an owner for a few months at a time. Just be sure to read rental reviews and arrange insurance beforehand.

Banks and credit unions

Certain banks and credit unions offer used auto leasing programs, though these tend to have strict credit requirements. It's worth checking with your financial institutions.

Lease transfers

Lease transferring services let you take over someone else's existing lease contract. The original lessee gets out of their lease early while you assume payments on a used car. 

Car rentals

Renting through a car rental company for an extended period can be similar to leasing a used car. While it gives you temporary access to a used car without buying it, renting long term has downsides like higher costs and uncertainty over car condition and maintenance.