Leasing a car is a popular option for a number of reasons. Lease payments are generally cheaper than financing payments, you can get a new car every few years, and you don’t have to deal with a lot of the hassles of car ownership when you simply lease. But what if you don’t have your heart set on a new car? Is it possible to lease a used car and save yourself some money?
While some people love to buy new cars so that they have an asset at the end of their payment period, there are a lot of benefits to leasing a car instead.
But how do you decide between leasing a new car and leasing a used car? Leasing a used car has one main advantage: it’s a lot cheaper. Not only will your lease payments be cheaper, but your insurance will most likely be cheaper. But it’s not without its downfalls.
Leasing a used car has a few downsides:
But all that being said, it is still cheaper to lease a used car. Although the interest rate may be a bit higher, the car will have a much lower residual value. Residual value is what the car is expected to be worth at the end of the lease period. Since a used car will have already gone through its biggest depreciation period, the car will be worth much less (therefore your monthly payments will be much less).
If leasing a used car sounds like a good option for you, it’s pretty easy to do. Here are our steps for leasing a used car.
Whether you are buying or leasing, determining a realistic budget is the most important step. Look at your monthly budget and see how much you can afford in car lease payments. Experts recommend spending no more than 20% of your total monthly income on transportation expenses. This includes car payments, gas, maintenance, parking, tolls, and any other expenses that may come with owning or leasing a car.
Having a good credit score will help you to secure the best interest rate for your car lease. To make sure your credit score is in the best shape possible, be sure to do the following:
You will need to find dealers that lease certified pre-owned cars, but they are relatively easy to find. It’s good to be a little flexible in what you are looking for, as this will give you the most room to explore and find good deals. There is a lot of demand for used cars in today’s environment, so there will not be as many options for used car leases as you may be hoping. But being flexible and shopping around will help you to find what you are looking for.
There are a lot of terms that you will be able to negotiate in your car lease.
When your used car lease is over, you will have three options.
If you are done with your lease and have other plans for your transportation needs, you can simply return your leased car and walk away. You will be responsible for any fees (wear and tear, mileage overages, etc) but once you pay them you will be done with your lease.
You can also decide to return your used car lease and get a new lease. This allows you to get another vehicle (new or used) and start over with new terms. This is what most dealerships prefer; they can then sell or lease your old car while getting you into a new lease that you will make payments on.
If you really like your car, you can choose to buy your leased car from the dealership. This may be an especially good idea now given how hard it can be to find a new car right now. A lease buyout may make sense if any of the following apply to you:
If a car lease buyout sounds like a good idea, you may need to secure a car lease buyout loan. At Auto Approve, we can help ensure you get the best car lease buyout rates possible. We have relationships with lenders all across the country, so we can help you shop around and compare. Lease buyout loans are one of our specialties, so we know a thing or two about getting you the best deal.
If you love your leased car, whether it’s a new car or a used car, a car lease buyout may be a great option for you. And when you use Auto Approve, you know you are in good hands. With a 96% would-recommend rating on LendingTree and an A+ rating from the Better Business Bureau, we’ve helped tens of thousands of people finance the cars of their dreams. So don’t wait–contact Auto Approve today to get started!