Car Leasing

Can You Lease a Used Car?

The car buying process often includes a debate over whether you should buy or lease. When it comes to leasing, you have more options than you may realize. Though it’s rarely advertised or spoken about, it’s possible to lease a used car. Most used cars that are available for lease are certified pre-owned vehicles that are less than four years old with under 48,000 miles.

The process to lease a used car is similar to that of a new car. However, there are a few key differences to consider. Keep reading to find out if and when it makes sense to lease a used car.

Types of used car leases

Before diving deeper into whether leasing a used car is a good idea, let’s take a closer look at the type of used car leases available:

Lease assumption

A lease assumption provides you with the opportunity to assume a lease from the original lessee by taking over their monthly payments.


With a lease-to-own agreement, you’ll make monthly payments until you’ve paid enough money to purchase the vehicle. It’s important to note that these agreements usually come with higher interest rates and monthly payments.


Lease-here-pay-here is a financing option offered through the dealership. It’s geared toward consumers who can’t qualify for an auto loan due to poor credit. The cost of this type of lease is typically far higher than a new car lease.


Here is a list of the benefits and the drawbacks of leasing a used car.

  • Lower monthly payment.
  • Lease buyout options.
  • Longer powertrain warranties.
  • Lower car insurance costs.
  • Shorter term leases available.
  • High upkeep costs.
  • Expiration of manufacturer’s warranty.
  • No “new car feeling”.
  • High interest rates.
  • Fewer options available.

Pros of leasing a used car

Below are some notable advantages to consider when deciding whether it’s worth it to lease a used car.

Lower monthly payment

Like a new car lease, payments are based on the difference between the car’s sale price and residual value. With a used car, you’re leasing a vehicle with a lower selling price. As a result, you’ll enjoy a lower monthly payment.

Lease buyout options

Used cars are worth less than their new car counterparts, making their residual values lower as well. Because of that, it may be wise to consider a buyout option at the end of your lease.

But make sure you do your research before you commit. Look into market prices and consider the potential costs of buying an older car (i.e., maintenance, warranty, etc.).

Longer powertrain warranties

Most certified pre-owned vehicles come with a powertrain warranty up to 100,000 miles. If you plan on purchasing the car at the end of your lease, this longer warranty is a huge plus.

Lower car insurance costs

Due to the reduced value of the vehicle, you can potentially save money on auto insurance for a used car,

Shorter term leases available

This isn’t the case for all used car leases. However, if you opt for a lease assumption, you can enjoy a shorter term as you’ll only be responsible for the remaining payments on the lease.

Cons of leasing a used car

While there are a handful of benefits to lease a used car, there are also several downfalls that come with it.

High upkeep costs

If you lease a certified pre-owned vehicle, you’ll likely encounter maintenance needs sooner than you would with a new car. So, while you may have a lower monthly payment, you should prepare for higher maintenance costs. Consider purchasing a prepaid maintenance plan.

Expiration of manufacturer’s warranty

A new car lease is covered under its original manufacturer’s warranty. A used car lease does not offer this benefit, meaning you will likely be required to pay for all repairs and maintenance costs out-of-pocket.

No “new car feeling”

Many car shoppers like the idea of riding home in a brand new vehicle. Who doesn’t love that fresh new-car smell? If this is important to you and you’re bothered by a stain, scratch, or ding, you may want to forgo leasing a used car.

High interest rates

Used car leases, especially lease-to-own and lease-here-pay-here options, come with high interest rates. They differ from new car leases in that there is no interest rate cap on used cars.

Fewer options available

Your options will be limited with a used car lease compared to what’s available for a new car lease.

When it comes to leasing a used car, don’t lease something that is too old or that will require a handful of repairs later down the road. Avoid leasing a used car that is over three years old.”

8 steps to lease a used car

If you’re interested in leasing a used car, follow these five steps:

1) Select an auto brand that offers used car leases

Not every automaker offers used car leases. You will have to do your research to find out which automakers can offer you a used car lease.

2) Find several used cars

Consider using Edmunds used car shopping tools to help you find the used car that’s right for you. You’ll have to be flexible as you may not be able to find a used vehicle that offers every single feature you want.

3) Ensure quality of the used cars

Once you’ve found several used cars, it’s essential to evaluate the quality of each one. Vehicle history reports can inform you whether the cars you’ve selected are high quality.

Stephan Lefebvre, the CEO of Autohaus Arizona says, “When it comes to leasing a used car, don’t lease something that is too old or that will require a handful of repairs later down the road (literally). It varies case by case, but generally speaking, it is safe to avoid leasing a used car that is over three years old.”

4) Call dealers

Not every dealership is willing to lease out used vehicles. It may take several calls to used car dealers until you find one that agrees to this type of transaction.

5) Obtain a price quote

As soon as you’ve found a dealership that agreed to lease a used car, obtain a price quote. Then, use an appraisal calculator to help you negotiate a good deal. Remember, even if you’re leasing a used vehicle, a dealer’s goal is to make as much money and possible. Get the facts before negotiating a price.

6) Understand the exact interest rate

If you notice that your contract doesn’t specify the interest rate, ask the dealership to include it so that you have it in writing.

7) Hire a qualified mechanic to inspect the used car

It’s wise to have a qualified mechanic inspect a used car before you purchase it. Doing so will help you avoid buying a car that requires repairs right off the bat.

8) Compare to a new car lease

Determine whether it’s worth it for you to lease a used car rather than a new one by comparing the two lease amounts side-by-side.

What next?

The more information you have, the easier it will be to find the best possible deal. Check what deal you can get if you were to purchase a car rather than leasing before you make up your mind.

Fortunately, it’s easy for you to get this information. You can find your best auto loan offer from leading lenders within minutes. Doing so won’t affect your credit score.

Also, check out our auto loan review page to review top auto loan lenders and compare their details side-by-side.