What You Need to Know About Leasing a Used Car

What You Need to Know About Leasing a Used Car

Can you lease a used car? The answer is yes, and it can allow you to save thousands instead of leasing a brand new vehicle.

If you are interested in knowing more about it and how it works, then you are on the right page. Continue reading below for some valuable insights on leasing a used car. 

Used Car Leasing Process

Leasing a used car has a similar structure as leasing a new car. The difference is that used vehicles available for leasing from used car dealerships must be certified pre-owned. These vehicles should also be not more than 4 years old, and it should have less than 48,00 miles on its odometer.

Once you pick a used car deals for lease that satisfies the requirements mentioned above, the leasing process will begin. It will start with the lender assessing the residual value of the vehicle. They will then determine the payment based on the difference in the vehicle's sales price and residual value. However, remember that there is no standard depreciation rate for all vehicles, so there will be a variation on the residual value.

After that's figured out, the lender will then assign an interest rate, which is also called a money factor. The money factor on a used car lease is typically higher compared to a new car lease. However, when combined with its lower sales price and rate of depreciation, the overall payment is considerably lower than leasing a new car.

The Pros and Cons of Used Car Leasing

Now that you have a better understanding of how leasing a used car works, it's time to look at its pros and cons.

Pros of a Used Car Lease 

  • Affordable Luxury Cars

Luxury used cars retain their value better, which makes them excellent for leasing. This way, it is possible for you to get your hands on an Audi or Lexus without breaking the bank.   

  • Easy Trade or Upgrade

The process of selling a used car can be time-consuming and challenging. However, by leasing, the process is made easier since the terms are already decided during the purchase of the vehicle.

  • Short Lease Option

Leasing a used car also allows you to avail of the short lease option. The duration of this lease can be as short as 6 months. This is perfect for those who want to try out other models in a short amount of time.

Cons of a Used Car Lease 

  • Older Car Issues

The biggest problem with leasing a used car is that you will be getting a used car. This means that it might have already developed issues that will cause you trouble and money later on.

  • Expensive Warranties

The older the car is, the higher the warranties will be. That's just how it works because used cars have more risks for wear and tear compared to newer vehicles.

  • Acquisition Fees

You have to pay for acquisition fees regardless of whether you are getting the vehicle from a dealership or lease trade site. This can cost up to $895, but some financial institutions may offer to waive this fee. 

Tips on Leasing a Used Car

Leasing a used car is uncommon compared to buying a used car for sale. This is why it's understandable why you might feel unconfident with the process. However, here are some tips that will help you along the way: 

  • Shop Around 

Not all car dealerships offer the option to lease a used car since it is an uncommon choice, to begin with. This is why you should shop around the dealers in your area.

To help narrow down your dealership options, decide on a goal. Are you leasing to get your hands on a luxury vehicle, or are you doing it to get more standard vehicles? Answering this will help identify which dealership you should work with.

  • Get the Vehicle Inspected

Although cars in dealerships undergo a thorough inspection, it is advisable to bring your own certified mechanic to check the vehicle. This will help you avoid future mechanical issues that you are unaware of, and it will also help leverage the price of the lease. Besides, bringing your own mechanical is always a must when dealing with used cars.

 The beauty of leasing a used car is that you will save a considerable amount of money compared to leasing a brand new one. However, it also comes with its own risk, so better do thorough research to ensure that it's the best option for you. Want to make sure you are getting a great deal visit www.wyzedryver.com