The Ins and Outs of Leasing a Used Vehicle

When you are considering a new vehicle, you likely run through your financing options. Buying your next car flat out, financing a new or used vehicle or leasing a new vehicle; these are all very common and frequently pursued options, but did you know that you’re able to lease a used vehicle as well? If you’ve decided that leasing is an option you’d like to explore, take the time to consider how leasing a used vehicle may suit you or if you should consider one of the other financing options.

The premise of leasing a new vehicle remains the same when you take out a lease on a used vehicle. Your monthly payment will be calculated based on the projected value/ depreciation of the vehicle’s value. This means that if you find a used vehicle available for lease, your monthly payment will likely be lower than with a new vehicle because the initial depreciation in value that occurs with new cars has already taken place. This can seem like a great motivator for leasing a used vehicle but there are some other things you should take into consideration!

Finding a used vehicle that is available for leasing may be a challenge. Dealers are less likely to consider leasing a used vehicle because the value of a used vehicle is more difficult to predict down the road. This could result in you paying more in monthly payments than you should if the car depreciates in value faster than anticipated. When leasing a new vehicle it is easier to anticipate how their value will change over the next few years.

If you are willing to overlook the risk and opt for the lower monthly payments there is another important financial risk you should know about it. Maintenance. It has been suggested that vehicle over three years of age will accrue twice as many service issues than its younger counterpart. If these repairs are not covered up your warranty agreement, then you will be on the hook for payment even though you are not the vehicle’s owner. Make sure that you are able to receive an extensive, full term warranty before you consider driving off the lot and discuss service costs and responsibilities with a trusted auto sales agent.

Just as you would take the time to consider leasing vs. financing a new vehicle, make sure that leasing in general is the right path for you. You should consider your predicted annual mileage, vehicle needs, customization requirements etc. on top of assessing the financial considerations above. Overall, if you are looking at an older vehicle and you can afford to do so, purchasing or financing is the way to go. You are undertaking some risks by choosing to go with a used vehicle lease. With all the said, it is an opportunity to save you money up front or the chance to lease a luxury vehicle you other wise may not be able to afford (beware of higher service/repair charges!), but the risks are likely not worth the rewards. To truly know what is best for you, speak with a trusted automotive sales/financing representative.