As prices for new and used vehicles continue to rise, alternative purchasing methods have been on the rise. Leasing for new vehicles is well established. What about for used cars?
It is not nearly as common as with new vehicles, but there are lenders that will provide leasing options for used vehicles.
Many manufacturers that provide a certified program often have a leasing program specifically for certified pre-owned vehicles. They are not often advertised, but it is one of the options that many manufacturer programs offer. An alternative option is a credit union that is a part of the Credit Union Leasing of America program (CULA).
Similar to leasing a new vehicle, you are able to get lower payments on a used vehicle lease because you are paying for expected depreciation plus an agreed upon interest rate, known as a money factor. Another benefit is that you have the vehicle for a pre-determined amount of time, and are able to turn it in without any financial repercussions, assuming that there isn’t any excessive wear and tear on the vehicle.
If you typically drive a lot more miles than average, leasing in general isn’t a good option for you. Also, if there isn’t comprehensive maintenance or repair coverage built-in with your lease, you could be in for some major service bills during your lease. Because you would likely be leasing a vehicle that is at least 3 years old, you would likely need to replace brakes, and tires, and vehicles in this age range are more likely to need other incidental repairs than a vehicle that is under 3 years old.