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How to lease a used car

Certified preowned is usually available — but get ready to negotiate for a good deal.

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Dealerships and manufacturers may allow you to lease a used car. But the selection is typically limited.

Fortunately, used car leases work the same as new car leases. As long as you shop around, negotiate and keep your eye on the total cost, a used car lease can mean lower payments on your next ride.

Can you lease a used car?

The short answer is yes, you can lease a used car the same way you can get a lease on a new vehicle.

The long answer: Finding a lease for a used car can be difficult. And while there are certainly cost-saving options, there are some risks because of the responsibility you take on.

Manufacturers and dealerships generally only lease certified preowned (CPO) vehicles. The price point on these is higher, but you can take advantage of an additional warranty and more security in your investment. You’re still responsible for some maintenance — but because CPO cars are recent models, it may not be as pricey as with older used cars.

How to lease a used car

In general, expect a similar process to if you were leasing a new car. You can negotiate the vehicle by itself, and your monthly payments will consist of interest charges — the factor rate — depreciation and the estimated value. Because used cars have a lower starting point and depreciate at a slower rate, you’ll likely have a lower overall cost.

1. Understand the leasing process

Come prepared with an idea of the fees you’ll pay, how you can finance your vehicle and what price point is the most competitive. For most leases, expect to drive a car for two to four years. Dealerships set hard limits on the amount of mileage you can accrue, so if you drive more than 15,000 miles a year, you may be stuck with high fees.

2. Request quotes

There aren’t many dealerships — and fewer manufacturers — that offer leasing on used cars. Even if it is available, you may not see your options advertised.

Do your research on sites like Edmunds or Kelley Blue Book (KBB) and reach out when you find a car that suits your needs. The seller may be able to provide you with a quote and work with you to determine the best way to create a lease contract.

3. Negotiate your lease

Once you’ve found a used car to lease, be prepared to negotiate. You can always work on lowering the purchase price of the car — which affects its value — and the money factor, or interest rate, you receive.

If you collect multiple quotes, repeat this process so you can lock in the best lease deal on a used car. And before you sign, be sure to have your potential vehicle looked over by an independent mechanic to confirm it’s in good working order.

Where can I find a used car lease?

Used car leases aren’t the easiest to find, but there are a few good places to begin your search.

  • Manufacturers. Some car manufacturers — especially luxury automakers — offer used car leases through CPO programs. If you have a specific car in mind, check with the manufacturer first to see what kind of deal you can get.
  • Dealerships. Although it’s still somewhat uncommon, dealerships may offer leases on used cars. Reach out to a few in your area to see if any offer this option.
  • Lease swaps. Online companies like Swapalease allow you take over someone else’s lease — including the payments and maintenance. This is ideal if you’re looking for a shorter lease term or want to avoid a large down payment.

Test drive a car near you

Get connected with dealerships in your area that offer upfront pricing.

When to consider a leasing a used car

From lower monthly repayments to more competitive insurance rates, there are a few perks that come with leasing a used car:

  • Pay less overall. Monthly payments tend to be lower because of the vehicle’s used status, largely because the cost of the car is less than a new model.
  • Easy to upgrade. When you lease, you won’t have to go through the hassle of selling a used car. Instead, you’ll have already agreed upon a set buyback price, making it that much easier to switch to something new when your lease is up.
  • Competitive insurance rates. You can find lower insurance premiums for used cars simply because the overall value is lower.
  • More affordable luxury. Although it may not have the most up-to-date technology, leasing a used car gives you the opportunity to get behind the wheel of an Audi or Lexus without having to pay the hefty price tag that comes with new luxury vehicles.
  • Typically well-maintained. Because most used car leases are for CPO vehicles, you’ll be getting behind the wheel of a cared-for vehicle with clear history. And with an additional warranty, major repairs should be covered.

Drawbacks of leasing a used car

Although you save some money, you won’t have any equity in the vehicle — which means no easy down payment on your next vehicle with a trade-in. Just because used car leases are generally less expensive doesn’t mean they’re the right choice for everyone.

  • May lack a warranty. Unless you opt for a CPO car or you choose a manufacturer that covers used cars under its initial warranty, you’ll have to pay for an extended warranty with your lease.
  • Responsible for maintenance. Not all leasing companies cover maintenance costs, which means you could be responsible for oil changes, tire rotations and other expenses to keep your car running smoothly.
  • Less selection. Because used car leases aren’t common — although that is changing with lease swaps — you’ll likely find that you have much less selection than you would if you opted for a traditional new car lease.
  • Lease restrictions. Just like a new car lease, your mileage will be restricted each year. And there will still be fees for wear-and-tear — along with your maintenance costs.

Differences between new and used car leases

The biggest difference? A used car will cost significantly less to lease than a new car. Because used cars are worth a fraction of the price of new cars, you won’t have to pay as much when you opt for something that already has a few thousand miles on it.

Here’s an example to see the differences in cost between leasing a new versus used car:

Cost of leasing a new car

Let’s say you’re ready to lease a brand-new $26,000 car. Over the course of a three-year lease, it will likely depreciate in value by about 30%, leaving you leasing a car worth only $18,200.

Your monthly lease payment will be based on the amount your car will depreciate in value — $7,800 — as well as any leasing fees. This would leave you with a monthly payment of around $216.

Cost of leasing a used car

Looking at the same car after those three years of depreciation, you’ll start by leasing a car worth $18,200. Using that same three-year lease term, your car would depreciate in value by about 20%, giving the car a residual value of $14,700. In this case, a $3,500 depreciation would give you a much lower lease payment of around $96 a month — less than half the cost of leasing a brand-new model.

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Bottom line

Used car leases often come with lower monthly payments and more competitive insurance rates — making them ideal for drivers on a budget. But they aren’t as common as new car leases, meaning you’ll have fewer vehicles to choose from.

Before you commit, learn more about how leasing a car works or compare your car loan options to see if you can afford to finance your own ride.

Frequently asked questions

Our answers to more questions commonly asked about leasing cars.

How do I know if I can afford a specific lease?

Just like when you buy a car, you’ll want to calculate your monthly lease payment based on the APR and terms of the contract. The exact amount you can afford will depend entirely on your personal financial situation.

These tips for scoring a good deal on a car lease can help you find an offer that fits your budget.

Would I be better off just buying a used car?

It depends on your needs. Any type of lease allows you to switch vehicles frequently without the hassle of selling the car yourself. On the other hand, even buying a used car can be considered an investment and is typically more cost effective than leasing in the long run.

You can learn more with our article on leasing versus buying a car outright.

Is a used car lease similar to a car subscription service?

Yes and no. You won’t own the car if you lease or use a subscription service, but a lease is still a long-term contract. With a car subscription service, you may be able to change cars within a few days’ notice, giving you more flexibility. But you won’t be able to negotiate down the price and may face more restrictions than with a lease.

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