Wondering, “can you lease a secondhand vehicle?” The short answer is yes! Leasing a secondhand vehicle exists but not in all dealerships.
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Car leasing is a great way to drive your favorite car without worrying about paying the whole price upfront. Unfortunately, although leasing can be much cheaper than buying, many people still find it challenging to lease a brand-new car.
The good news is that there is also secondhand vehicle leasing available that saves you thousands of dollars on your next car lease. However, keep in mind that you won’t find secondhand leasing at every dealership.
This article provides you with all the tips and tricks about secondhand vehicle leasing. In addition, it highlights the main benefits you’ll get from leasing a used car and the main disadvantages you might face.
What does car leasing mean?
Before we dive into the details of hours whether you can lease a secondhand vehicle or not, let's make sure that we are on the same page regarding the definition of car leasing.
The term car leasing is very similar to car renting. You can basically drive the most modern vehicle without worrying about expensive monthly payments that you'll pay for car loans. During the current lease contract, you have to pay monthly for driving the vehicle, but you will not be the owner of this vehicle at the end of the contract.
Depending on your car lease contract, you might have the option to purchase the vehicle at the end of the term. But, of course, the final car price depends on some calculations considering the initial car sale value and the depreciation value over the years of the contract.
Leasing a car provides you with many benefits, including enjoying the most modern car even if you don't afford expensive monthly payments. It also allows you to drive a vehicle that doesn't need much maintenance for the first couple of years, which is a huge plus for those suffering from major car problems with used vehicles.
To make things even more affordable, automotive experts and dealerships came up with approaches to lease a used vehicle. This way, you can still drive a good vehicle with a little mileage for fewer monthly payments. In addition, when leasing a used vehicle, you take advantage of lower monthly payments and insurance rates.
How does secondhand vehicle leasing work?
Although secondhand vehicle leasing is not very different from new car leasing, there are some specific details to keep in mind when leasing a used car:
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Eligible used cars
Not every used vehicle qualifies to be leased. According to experts, only certified-pre-owned (CPO) cars are eligible for car leasing. Thus, when leasing a used car, you will have peace in mind that all vehicles are not older than four years and don’t exceed 48,000 miles.
Of course, driving a car that is not very old is a huge plus because you don’t have to worry about major repairs immediately. But, at the same time, you won’t have a problem with significant depreciation that you might face when leasing a brand-new car.
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Secondhand vehicle evaluation
Like leasing a brand-new car, the dealership will work with you to determine the residual value for the secondhand vehicle. Then, they will subtract it from the current sale price to determine the monthly payments.
Even with used cars, vehicles do not depreciate at the same rate. Therefore, it’s hard to tell how much the difference between a sale and residual value for every single vehicle. In other words, your monthly payments differ on a case-by-case basis.
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Money factor determination
After calculating the residual value, the next step is determining the money factor. When calculating the manufacturer, people might get confused because the manufacturer for used cars is much higher than for brand new vehicles.
Even with the high manufacturer, you will end up with much lower monthly payments than leasing a brand-new car. This is because the newest cars do not have a very high depreciation rate, and their sale prices are much lower. Thus, when you see a higher manufacturer, don't feel that you'll pay much and keep your focus on the final monthly payment after everything is included.
In general, you will see at least $40 less in monthly payment when you lease a used car versus a brand new one. Thus, you might need to consider looking into a better vehicle.
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Understand the Buy Here Pay Here
There is a very common car leasing system called the Buy Here Pay Here. These systems are a little different, and they come from independent dealerships. If you go this route, it’s important to read the contract carefully and understand all terms.
What are the main pros of leasing a secondhand vehicle?
When leasing a secondhand vehicle, you get along, including:
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You will pay less each month
One of the first benefits you'll get from leasing a secondhand vehicle is lower monthly payments. Remember that we discussed how much the CPO vehicle is cheaper than the counterpart of no vehicles. Also, used cars do not have a very high depreciation value, so you will end up with a much lower monthly payment even though the manufacturer is a little higher.
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You have a high chance of buying the vehicle at the end of the lease
Since the used vehicles are much cheaper than brand new ones, when leasing a used car, you have a high chance of purchasing the vehicle at the end of the lease term. If you decided to do so, we recommend looking at the current market price and understanding what type of maintenance you'll face shortly.
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You'll take advantage of the powertrain warranty
Even when leasing a used vehicle, you'll still take advantage of the powertrain warranty. This is because the powertrain warranty is usually less than up to 100,000 miles. Of course, having such a warranty is a great benefit and can help you a lot with major mechanical problems.
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You don't have to worry about high insurance rates
Finally, since you are leasing a used car, you'll get much lower insurance than the counterpart's new car. If you don't already know, insurance plans are much more expensive for brand new vehicles than used.
What are the mean cons of leasing a secondhand vehicle?
Although seeing a secondhand vehicle comes with a lot of benefits, it is important to highlight the main disadvantages that you might face to be prepared:
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You might pay more for maintenance
Even though the eligible used cars for leasing do not have much mileage, there is still more susceptible to major repairs than counterpart new cars. Thus, it is most likely that you will pay for maintenance more frequently, which could be a big headache to many people.
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You will miss the brand-new vehicle smell
If you are a big fan of brand-new vehicles smells, you might miss this one when leasing a used car. It will feel the same as your older vehicle since it was owned by somebody else. If that's not a problem for you, you should be good with leasing a used car.
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You might not find all the advanced features
When leasing a brand-new car, you have the chance to experience and use all the most advanced features. However, you might not find this when leasing a secondhand vehicle. Some of these features include safety technologies and other entertainment and infotainment system features.
Is it worth leasing a used car?
It all depends on your budget and the type of used vehicle that uses light. For example, if you can't afford the monthly payment for a brand-new car, choosing to lease a used vehicle is a better option for you.
However, if you are concerned about expensive repair costs, you need to be aware that many used cars are more susceptible to major repairs than brand new cars.
Therefore, deciding whether it's worth leasing a used car or not depends heavily on evaluating your main objectives and comparing them to the main pros and cons of leasing a used vehicle. Once you make the right comparison and evaluate each element's importance, you will make an informed decision that works best for you.
Why should you never lease a car?
Although leasing a car is a great option that allows you to drive the most modern vehicle without worrying about heavy monthly payments for auto loans, it might not be a great idea for many people.
According to experts, when you lease a car, all your payments go towards a vehicle that you will never own. It is exactly like living in an apartment that you rent, not own. Whatever you pay does not go anywhere, and the vehicle will not be yours at the end of the contract. Once the contract expires, you must give the vehicle back to the owner.
With that in mind, you don't have any authority over the vehicle, and you cannot trade it or sell it to another buyer to purchase a better vehicle. Of course, when leasing a car, you'll enjoy it in the first couple of years because it's a brand new car, but after those years past, it will turn like any used car, and you will lose the excitement about driving it at some point.
What happens if you crash a leased car?
When leasing a brand new or secondhand vehicle, dealing with accidents is a huge responsibility. In general, if you got in a car accident, you'll still owe the vehicle's value to the leasing company.
Of course, depending on your insurance policy, many of the major repairs might be covered under the insurance. Still, if there is any gap difference between what the insurance pays and what the leasing company asks for, you'll have to take care of that.
That's why you got to be very careful about leasing a car, whether it's brand new or secondhand.
Is leasing a car a waste of money?
Not necessarily.
Depending on your own goals and budget, leasing a vehicle might be the only best option for you. For example, if you're interested in experiencing driving a brand-new car without worrying about expensive monthly payments, leasing a vehicle might be a smart option.
However, if you think that paying monthly for a vehicle that you don't own at the end of the contract is not a good idea, it could be a waste of time and money for you.
Remember that even with the monthly payments that you'll put, you are getting the advantage of driving a brand-new vehicle and do not pay the money for anything. As we indicated before, think about it like living and an apartment that you rent; even if you don't own the apartments, you still take advantage of living in it and using it. So, you still get benefits from your monthly payments toward the leased vehicle at the end of the day.
Conclusion
If you're wondering can you lease a secondhand vehicle, the short answer is yes, but you might not find it at every dealership.
Leasing a secondhand vehicle is a great idea for those who can't afford to lease a brand new car. Not only you'll save a lot on monthly payments, but also you can take advantage of purchasing the vehicle at the end of the contract, and they don't have to worry about paying high insurance rates.
If you still cannot afford to lease a used car, your old vehicle can help you even if it's not in the best condition. Cash Cars Buyer guarantees to remove your old car and pay within one to three days only! This way, you can take advantage of this payment and use it towards leasing the best secondhand vehicle!
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