How Long Is a Lease On a Car?

Car leasing terms vary between so-called short-term leases (under 24 months) up to long-term leases of 48 or even 60 months.

The average or “standard” term for a car lease in the U.S. is 36 months. Let’s take a brief look at each type of lease you may come across in your search:

1 to 12-month lease

These are rare and most dealerships or leasing companies don’t offer them. If you’re lucky enough to finda lease of this length, you may have to pay very high monthly payments.

12 to 24-month lease

Again, leases of less than two years are non-standard and you may have your work cut out to find one. If you do, watch out for the monthly payments.

24-month car lease 

This is typically the shortest advertised vehicle lease available from most car leasing companies. Not all companies will offer this but you’ll probably be able to negotiate a car lease of this length if not.

36-month car lease 

This is the average car lease length and most people consider three years as the “standard” lease available in the U.S. Most dealerships and leasing companies in the country provide this option.

48-month car lease

Some leasing companies in the U.S. offer a longer-term lease of four years that is aimed at drivers who want to benefit from lower monthly fees in exchange for a longer commitment.

60-month car lease

A five-year lease is again nonstandard and is unlikely to be offered by your leasing company. Most people considering such a long lease end up buying a car. 

The minimum lease period offered by many leasing companies is 24 months. Many companies consider this a “short-term lease” because the norm is 36 months. 

If you hunt around, you may be able to find a leasing company that is prepared to negotiate a shorter agreement of between 12-24 months — but don’t expect particularly favorable terms. Leasing may not be the best option if you want to drive a car for less than 24 months before changing it. Read on for other available options.

Can you lease a car for three months?

A lease of three months is more like a long-term rental. You might be better off speaking to a car rental company and trying to negotiate a deal with them.

What if you need a car for just a few months?

Short-term car leases are not favored by most leasing companies. Dealers generally calculate monthly payment amounts according to standard 36-month contract terms and factor in the estimated depreciation of the vehicle. There are many reasons why someone may want to consider a shorter lease than 24 or 36 months — the factors that determine the ideal lease length are covered in the next section.

One option for a short-term lease is a car lease takeover. This is where you find another driver who wants to get out of their lease and you agree to take over the responsibility for the lease (including paying any excess maintenance or damage fees). 

The downside of doing this is that you are unlikely to get much choice of vehicles but, on the upside, no down payment is usually required – just a small fee. Another option to a lease but with standard shorter contract terms is a car subscription with FINN, where 6-or 12-month subscription terms are standard (more about this below).

The golden rule with leasing a car is that you should never arrange a lease that you might break. Early termination will usually incur significant penalties and you may be required to pay out the entire term of your lease. It’s not possible to simply give the car back and stop payments.

Monthly fees are usually lower for long-term leases because cars depreciate more slowly as they age. Most cars lose value at the quickest rate in the first year (up to 20 percent) and the cost of a lease reflects this. 

However, it can be a big mistake to negotiate a lease that’s longer than you need, more expensive than you can afford, or is longer than the car’s warranty period: if the car breaks down after the warranty expires, you could face high repair bills for a car you don’t even own.

Choosing a short-term lease allows more flexibility but most deals are for two years or more — so if you want a shorter term than that, you’ll need to hunt around and will likely pay much higher monthly fees with traditional leasing companies.

Here’s how to decide on the length of your car lease:

• Do your financial homework and work out what you can afford to pay
• Research reliable leasing companies 
• Shortlist your leasing options
• Decide if you’re happy to pay a little more per month and trade your car in two years
• If you want the best monthly deals, focus on a lease of 36-48 months (but first decide if you’re happy to hold the car for that long)
• If you want to drive your car for less than two years, consider another option like a short-term car subscription (see below).

As you’ve seen, there are advantages and disadvantages of leasing a car — and the length of the lease you decide on counts for a lot. The following are the main pros and cons of short- and long-term leases:

Pros of short-term car leases

• Get to drive the car you want quickly
• Not tied to a long contract
• May still be lower monthly payments than financing for a car purchase
• New cars are covered by warranty for the term of the lease
• No need to worry about wear and tear

Cons of short-term car leases

• You never own the car unless you buy it back at the end of the lease 
• You’ll pay a high monthly rate for depreciation on a new car 
• Taxes, fees, insurance, roadside assistance, maintenance and repairs are all extra costs
• A down payment may be required
• Mileage limits and possible excess mileage fees apply
• High interest rates
• Penalties apply if the vehicle is not returned in its original condition (minus wear and tear)

Pros of long-term car leases

• Get to drive the car you want quickly
• Lower monthly rates
• No need to worry about wear and tear

Cons of long-term car leases

• You never own the car unless you buy it back at the end of the lease
• May be longer than the car’s warranty, which can mean high maintenance/repair costs
• Taxes, fees, insurance, roadside assistance, maintenance and repairs are all extra costs
• A down payment may be required
• Mileage limits and possible excess mileage fees
• High interest rates
• Penalties apply if the vehicle is not returned in its original condition (minus wear and tear)