Looking to get a car but don’t want to pay for a brand new one? There are a lot of great used cars available. However many are still quite expensive.
So many people want to know can you lease a used car instead of having to plunk down cash for one? Find the answer below…
Can You Lease a Used Car?
Yes, you can lease a used car. But not all dealers offer this option. And they can’t offer a lease all used cars. Here’s what you need to know…
Leasing a used car has a lot of benefits. It is also ideal for those on a budget and who need a vehicle for their daily commute.
Contrary to popular belief, used cars that are available for lease in dealerships are not that old. Dealerships are only allowed to lease cars less than four years old and have fewer than 48,000 miles on the odometer.
Finding the car you want in a dealership that knows how to use car leasing can help save a lot of cash.
However, keep in mind that not all dealers offer a lease on used cars. And most of the time, they are not advertised online or at all. In fact, there may even be employees at a car dealership who may not be aware of used car leasing.
The Process of Leasing a Used Car
So what exactly is the process that you have to go through in leasing a used car? For starters, we need to identify exactly what a used car is in a leasing market.
A used car in a leasing market is a certified pre-owned (CPO) car that is not yet four years old. These cars have not yet reached more than 48,000 miles on the odometer.
Leasing a used car is nearly just the same as doing so on a new car.
The lender will determine the car’s residual value. They will also determine the payment based on the difference between the car’s residual value and its sale price. The lender will also assign the deal a money factor.
The money factor is the interest rate. Interest rates of used cars are higher than unused ones. But even with higher interest rates, the sales price and depreciation rate are lower, resulting in lower overall cost.
But will you get more benefits when leasing a used car? Or is it actually the opposite?
The Pros And Cons
So what exactly are the benefits that you will get when leasing a used car? Let’s weigh some pros and cons.
Leasing a used car is much more affordable.
Another benefit would be that sales tax is also lower since you only pay for the depreciation value.
You can also lease luxury cars. If you are looking for a vehicle that is a bit luxurious, but you want it to be affordable, then leasing a used luxury car may do it for you.
Now let’s talk about the cons.
One disadvantage of leasing a used car is that the technology may be a little outdated, for a lack of a better word.
Because it is a used car, you cannot expect it to be perfect or work like a new one.
One of the things you should watch out for when leasing a used car is the warranty. Though many used vehicles in the leasing market have some extended warranty coverage, you still need to be cautious of those that are not.
An unwarranted car may cost you a lot of money, possibly more than what you bargained for. However, you can always try to get a warranty on your car by paying more for one. Ask your dealership if they offer a warranty.