Publish Date - December 31, 2018
Author: Greg Thibodeau
Used Car Lease
Can You Lease a Used Car?
Used car leasing is the fastest growing segment of the industry and can be an excellent leasing decision. Since the car you want to lease is used you must be extremely informed, both about the car and the leasing process, to insure you get a good deal. If you are a good negotiator, leasing a used car is your time to shine. There isn't a set value for a used car like there is for a new car. The value of the used car becomes what you can negotiate with the dealer.
The Benefits of Leasing a Used Car
Like a new car lease, a used car lease allows you to get a better car for a lower monthly payment than you could if you were purchasing. You are getting a good deal when leasing a used car because the previous person who leased the car already paid for most of the depreciation. You know the car was well maintained if it was previously leased and will have had the proper scheduled maintenance performed. Sometimes the used car will even still be under the original car warranty.
What to Watch Out for in a Used Car Lease
Leases are contractual documents which are difficult to change or terminate once they are signed. Make sure you absolutely understand every aspect of a used car lease before you sign it. The main concern about a used car lease is determining the current and residual value of the car. Every car is used differently and ages differently so two cars of the same make, model, and year can have wildly different values after a few years of use.
Cars to Avoid for a Used Car Leases
You want to look for a car with a good overall reputation but that has a high initial depreciation schedule. Once you choose a used car you want check to see how much it would be to lease a new model. If the used car you want holds its value well you should just lease a new one as the payments will be very similar. If you want a popular car then you should also check out new car lease as popular cars hold their value extremely well. Also, avoid cars driven more than 15,000 miles a year by the previous person who leased it.
The Used Car Lease and Warranties
When leasing a used car one of the best cars to look for are ones coming off a 2 year lease. These cars are often still under the manufacturer's warranty. Warranties for a used car lease are an important consideration. You will be paying for repairs for a car you don't own if you're leasing, the car needs repair and is out of warranty. Manufacturer's warranties are much better than a dealership warranty because with a manufacturer's warranty you can get repairs done nationwide.
Negotiating a Used Car Lease
- Haggle every aspect of the lease.
- Consult online internet sites for information about the prices of used cars.
- Know the used car's estimated current value. (the capitalized cost)
- Know the used car estimated wholesale value. (what the dealer could sell it for at auction)
- Negotiate the current cost as close to the wholesale value as possible.
- Understand what the expected residual value of the car will be at the end of your lease.
- You will be paying the difference between the used car's capitalized cost and its residual value plus fees. Negotiate for the lowest current value and the highest residual value.
Use the leasing tools on myAutoloan.com's web site for researching and contracting a good used car lease.