Can You Lease a Used Car?

If you’re wanting to change up your vehicle without emptying your wallet, used car leasing might be the ideal solution. This option is becoming increasingly popular among budget-conscious drivers who still want a nice vehicle without long-term commitments. It’s the perfect balance — you can drive a better car for smaller monthly payments. Here at Firkins Chrysler Dodge Jeep Ram (CDJR), we’ve put together this guide to help you understand why leasing a used car might be a great choice for you and how the whole thing works.

Understanding Used Car Leasing

Think of used car leasing as borrowing a preowned vehicle for a set period — usually two to four years. You’ll be getting a car that someone else has already broken in, which means you’ll pay less each month. What you have to shell out will be tied to the expected depreciation of the car during the lease term. Watch your mileage, though. Lease deals come with mileage limits, and going over them will cost you extra. At the end of the lease, you simply return the car in good condition.

How Does Used Car Leasing Work?

First up, you need to find dealerships that actually offer used car leasing. This isn’t as easy as it sounds, as fewer dealerships provide this option compared to new car leasing. Once you locate a suitable dealership, they’ll evaluate your credit to determine your eligibility. They’ll then figure your lease payments based on the car’s current value versus its expected value at the end of the lease.

During this process, you might hear the term “money factor,” which is essentially just a fancy word for the interest rate you’ll pay to lease the car. You might need cash upfront for a down payment, too. After your lease ends (typically after 24 to 36 months), the dealership will check the car over. You then have the option to return it, buy it, or lease something else.

Advantages of Leasing a Used Car

The biggest benefit of leasing a used car is that you have lower monthly payments compared to financing or leasing a new vehicle. This means you might get to drive a fancier ride than you could otherwise afford. Plus, you’re not stuck with the same car forever, so if you like changing things up every few years, leasing makes this happen without the headache of selling your old car. Sometimes, you’ll find that insurance runs cheaper for leased used cars. And if you go with a certified preowned vehicle, you might still have warranty coverage.

Disadvantages of Leasing a Used Car

However, there are some drawbacks. It’s harder to find dealerships that offer used car leasing than ones that offer leases on new cars. When you do find one, you can expect higher interest rates than with new cars and no manufacturer’s warranty unless you opt for a certified preowned vehicle, which limits your choices.

Older cars can often have unexpected maintenance needs, and you might face repairs not covered under warranty. The mileage caps are also often stricter than with new car leases, which is tough if you drive a lot. It’s also worth remembering that by leasing, you’re building zero equity in your vehicle. After all those payments, you’ll own nothing but memories of driving a nice car.

Step-By-Step Guide To Leasing a Used Car

Ready to start the process of leasing a used car? Here’s how to navigate it:

1. Set your budget and pick the type of car you want.
2. Check your credit score — higher scores can mean better deals.
3. Search for dealerships offering used car leases.
4. Shop around and compare different offers.
5. Inspect potential cars carefully and test-drive them.
6. Negotiate the financial terms, including the monthly payments, down payment, and mileage limits.
7. Read the lease agreement carefully. Check any fees and end-of-lease arrangements.
8. Understand the insurance requirements for the leased vehicle.
9. Sign the paperwork and pay any necessary upfront costs.
10. Drive away in your new-to-you vehicle.

Don’t be afraid to ask lots of questions along the way, and, hey, if the deal feels off, don’t hesitate to walk away. There’s no shame in that. Your perfect lease will be waiting for you somewhere else.

Negotiating the Lease Terms

Before negotiating the lease terms, do your homework. Know what that car’s really worth before talking numbers. Several parts of the lease are often negotiable, including the car’s price (known as the capitalized cost), the interest rate (or money factor), and the mileage allowance.

If you want to lower your monthly payments, try offering more money upfront if you can. Be honest about your driving habits — it’s better to pay for extra mileage upfront than face penalties later. Also, ask about the acquisition fee, which typically ranges from about $595 to $1,095 — some dealers will be willing to negotiate it. Lastly, get quotes from multiple places. Nothing motivates a dealer like knowing you’ve got options elsewhere.

Understanding Warranty and Insurance Options

Warranty coverage can vary wildly with used leases. Some cars might have a factory warranty left, while certified preowned cars often include extra coverage, which is a huge plus. For older vehicles, consider whether purchasing an extended warranty makes financial sense compared to possible repair costs.

Insurance requirements work differently with leased cars. Dealerships usually demand higher coverage than the legal minimum. Most will insist on gap insurance, which covers the difference if your car gets totaled or stolen and you owe more than it’s worth. Remember, gap insurance means you’ll need comprehensive and collision coverage, too.

Reviewing Lease Agreements and Obligations

Before signing a lease, read every word carefully. Check the lease length, exact payment amounts, due dates, mileage limits, and what counts as normal wear and tear. Be sure to look for early exit penalties, as they can be brutal. Understand exactly what happens when the lease ends.

Also, watch out for sneaky fees. Besides the acquisition fee, there may be a disposition fee when returning the car or a security deposit. Check the maintenance requirements — some leases force you to service the car at specific places. If you find the legal jargon confusing, ask for clarification in plain English. Having someone knowledgeable review the contract isn’t overkill — it’s smart.

Lease a Used Car at Firkins CDJR Today

Used car leasing can put you in your dream vehicle without breaking the bank. You’ll enjoy lower monthly payments, the chance to switch cars more often, and fewer worries about long-term repairs. If you’re in the Bradenton area and want to explore your options, contact Firkins CDJR today. Our friendly staff in our finance center can guide you through the process, answer your questions, and find you a used car lease that fits both your needs and budget.

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