Leasing a car is a popular option, known for lower monthly payments compared to buying. Traditionally, leasing has been associated with brand-new vehicles. However, savvy consumers are increasingly turning their attention to Used Car Lease Programs. This approach can offer significant savings and flexibility, but it’s essential to understand how it works and if it’s the right choice for you.
Step-by-Step Guide to Navigating Used Car Lease Programs
While not as common as new car leases, securing a lease on a used vehicle is definitely achievable. Here’s how to navigate the process effectively:
1. Contact the Lender Directly: If you have a specific car brand in mind, your first step should be to contact the brand’s financial services arm, often known as the captive lender. For instance, if you’re interested in a used Honda, reach out to Honda Financial Services. You can usually find their customer service number by searching online for “[Brand name] finance phone number.” Inquire directly whether they offer lease programs for certified pre-owned (CPO) vehicles.
2. Establish a New Car Lease Comparison: To determine if a used car lease presents a genuine value, you need a point of comparison. Before diving into used car options, obtain a lease quote for a new version of the car you are interested in. This new car lease quote will serve as your benchmark, allowing you to accurately assess the financial benefits of a used car lease.
3. Begin Your Used Car Search: Online marketplaces are your best friend in this step. Websites dedicated to car sales, like Edmunds, provide tools to efficiently search for used cars. Focus your search on certified pre-owned (CPO) vehicles, as these are often eligible for lease programs due to their inspected condition and manufacturer backing. Remember, the used car market means inventory can be less predictable. You might need to be flexible on color or specific features. Identify a few CPO vehicles from different dealerships to increase your chances of finding a suitable lease option.
4. Identify Dealerships Offering Used Car Leases: This is where patience comes in. Used car leasing isn’t standard practice, so finding a dealership that offers it may require some legwork. You might need to contact several dealerships. When you find a CPO vehicle you’re interested in, call the dealership and ask to speak with an internet manager or sales manager. Clearly state that you are interested in leasing a specific certified pre-owned car from their inventory. If you initially encounter a “No,” politely ask the manager to double-check with a senior team member, as used car leases are sometimes less known about by front-line staff. Be prepared for a callback as they investigate your request.
Evaluating the Deal and Making a Decision
Once you’ve located a dealership willing to discuss used car lease programs, it’s time to get down to specifics and evaluate the offer.
1. Request a Detailed Price Quote: Treat this process like any car negotiation. Request a comprehensive price quote. Negotiate the purchase price of the used vehicle, just as you would if you were buying it. Utilize resources like Edmunds’ appraisal calculator to ensure you’re aiming for a fair price. Crucially, ask for the residual value of the vehicle at the end of the lease term. This is important if you consider buying the car later. Finally, understand all costs: the total down payment, monthly payment inclusive of all taxes and fees.
2. Compare Used vs. New Lease Costs: Now, compare the used car lease quote against the new car lease quote you obtained earlier. Are the savings significant enough to justify choosing a used model? If the financial advantage is clear, it’s time to arrange a test drive and potentially finalize the used car lease deal.
Advantages of Used Car Lease Programs
Why might you consider a used car lease? Several compelling benefits exist:
Lower Monthly Payments: This is the primary draw for most. Used cars have already experienced their steepest depreciation, resulting in a lower selling price compared to a new car of the same model. This lower price point, even when factoring in potentially higher interest rates (money factor), translates to significantly lower monthly lease payments. You avoid the brunt of new car depreciation.
Excellent Lease Buyout Potential: Because used cars have lower residual values than new cars, they can be attractive for lease buyouts. At the end of the lease, the price to purchase the used car will be lower. This can be advantageous if you’ve grown to love the vehicle. However, always conduct thorough research to ensure the buyout price is still competitive in the market, considering potential maintenance and extended warranty costs associated with an older vehicle.
Extended Powertrain Warranty: Certified pre-owned vehicles often come with extended powertrain warranties, sometimes reaching up to 100,000 miles. This is a major benefit, especially if you are considering buying the car at lease end, offering long-term peace of mind regarding major mechanical components.
Potentially Lower Insurance Costs: The reduced value of a used car can also lead to lower auto insurance premiums compared to insuring a brand-new, more expensive vehicle. This adds to the overall cost savings of a used car lease program.
Disadvantages to Consider
While attractive, used car lease programs also have potential drawbacks:
Increased Maintenance: Used cars, by definition, have mileage and wear. You should anticipate maintenance needs arising sooner and potentially being more frequent compared to a brand-new car. Factor in potentially higher upkeep costs into your budget.
Absence of “New Car Feel”: While new to you, the car isn’t fresh from the factory. Expect minor cosmetic imperfections like scratches or interior wear. If the pristine condition of a new car is a priority, a used car lease might not fully satisfy.
Potentially Older Technology: An older model year vehicle might lack the very latest safety and technology features found in current models. When considering a used car lease, ensure the vehicle has all the essential features and technology you require for your needs and comfort.
Exploring Alternative Used Car Lease Options
Beyond traditional dealerships, other avenues for accessing used car leases exist:
Lease Transfer Marketplaces: Websites like Swapalease and LeaseTrader facilitate lease transfers. Individuals wanting to exit their existing car leases can list their vehicles, and those seeking short-term, affordable car options can “take over” these leases. Often, the original lessee has already paid a significant down payment, meaning the lease takeover might require little to no upfront cost. In some cases, the original lessee might even offer a cash incentive to sweeten the deal and expedite the lease transfer. These marketplaces can be a source of very favorable used car lease terms.
Car Subscription Services: A Lease Alternative?
Car subscription services are emerging as a related, albeit slightly different, option. Companies like Sixt+, Finn, SimpleCar, Kyte, and Go, alongside offerings from automakers like Porsche, Volvo, Nissan, and Hyundai, provide car access through subscriptions. While not technically leases, they share similarities. They typically involve low upfront costs, mileage restrictions, and monthly payments that are often less than car purchase payments. Maintenance is usually included. However, unlike some leases with buyout options, subscriptions typically do not offer the option to purchase the vehicle at the end of the term.
The Growing Trend of Used Car Leases
Used car leases are gaining traction. With new car leases consistently representing a significant portion of new car financing, the return of these vehicles as lease-ends fuels the used car market. Dealerships are increasingly recognizing used car leases as a way to cater to budget-conscious consumers and move used inventory.
Important Note: Not Always the Best Deal
Used car lease programs are not a guaranteed “best deal.” Aggressive incentives on new cars, such as cash rebates, subsidized interest rates (lower money factors), and end-of-model-year promotions, can sometimes make leasing a new car more financially advantageous than a used one, especially for newer used models.
However, if you’re interested in a car model that typically doesn’t have substantial incentives – perhaps a popular, high-demand vehicle – then exploring a used car lease program can be an excellent strategy. It allows you to access a vehicle that closely matches your preferences at a significantly reduced cost compared to a new lease. Careful comparison and research are key to determining if a used car lease program is the right path for your automotive needs.
