If you’re in the market for a used car, it makes sense to consider all of your financing options. Car leasing is one of the most cost effective ways of securing a new vehicle, but does it offer the same advantages when you’re leasing a used car? This guide will explain exactly how used car leasing works and who it is right for.
Generally speaking, leasing a used car means undertaking the same process as leasing a new car. You contact the dealer, the company or the individual who owns the car and negotiate a price. The used car leasing company then has the car inspected and checks you credit before arranging to buy the car and lease it back to you. You then sign a contract to make regular payments over a set term. Once the term expires and all payments are made, you return the used car to the leasing company. In some cases you might be offered the chance to buy the used car at the end of the term.
What makes used car leasing different, is the vehicle itself. In theory it should be less expensive to lease a used car, because car leasing is based on the depreciation of a vehicle's value. This is because a used car has already undergone its most rapid depreciation in its first year.
In the majority of cases used car leasing is carried out on vehicles owned by drivers that are midway through their agreed lease agreement. If a leasing agreement ends during the term, the leasing company may choose to make the car available to exchange or transfer to another company or personal user.
The main advantage of leasing a used car instead of a new car is the same as the reason to buy a used car instead of a new car – affordability.
As you will generally lease a car over a shorter period (usually the remainder of the term of the original lease) you will not be paying as much as you would for a longer term lease on a new vehicle. Payments will generally be lower too as the car’s value will have depreciated in the first year.
However, does this make used car leasing a good deal? Certainly used car leasing can offer lower payments than financing a used car with a loan or leasing a new car.
Despite this, leasing a new car often works out as a more cost effective proposition. This is because leasing companies negotiate the price of new vehicles and can generally secure much more cost effective terms. Promotional incentives, discounts and rebates can make a new car lease a better deal and cheaper than leasing a used car.
Our suggestion is that you visit the car leasing company section at ContractHireAndLeasing.com to discover the leasing options available on the vehicle of your choice. The majority of companies will offer leasing on both used and new cars – so find the model you want and see what options are available. Compare quotes on both used and new cars to find the right deal for you.
It is more difficult to evaluate a used car lease than a new car lease, because there are many additional factors to consider. These include:
- True market value – Do your homework before negotiating a fair price. This is the key to securing a good deal.
- Mileage – Remember to check the number of miles on the clock. A high mileage car is unlikely to be offered a good leasing contract. Generally a car’s maximum mileage to be deemed ‘good value’ should be 15,000 miles/year. So a car less than a year old should have no more than 15,000 miles on the clock, a car two years old 30,000 miles, etc.
- Repair costs – Most used cars will not come with a warranty, unless there is time remaining on the manufacturer’s warranty. Any existing problems will be your responsibility as soon as you sign the agreement.
- Read the contract thoroughly – With any used or new car leasing agreement you should read the contract thoroughly to avoid being hit with add-on fees or unexpected charges.
As the majority of used cars made available for leasing are those that were already midway through a leasing agreement, the range of vehicles available is almost as wide as the options available with new car leasing.
Previously-owned luxury vehicles make particularly strong leasing candidates. Some of the leading models available through contracthireandleasing.com include models from Bentley, Jaguar, Mercedes-Benz and BMW.
As with buying a new or used car, the cheapest way to lease a used car is to shop around for the best deal online.
You might choose to take out a used car leasing deal from the company used by the dealer from whom you acquire the vehicle. Alternatively, you might wish to find the car from a dealer or individual and negotiate a price before contacting a leasing company of your choice.
At ContractHireAndLeasing.com we advertise more than 350,000 car leasing options for both used and new vehicles. Use our search tools to ensure you’re getting the cheapest offer on the vehicle of your choice and remember to compare the rates available on both used and new cars models to ensure you’re getting the most cost effective deal.
You can lease a used car but there are several points you should be aware of. The car usually has to be less than 24mths old, “VAT Qualifying” and covered less than 30,000 miles. Your payment may be lower compared to leasing a brand new car because much of the depreciation will have already occurred. British manufactured cars are usually good value as used cars as they suffer heavy depreciation in the first 12mths. A car that is one or two years old is usually a good bet – don’t buy something too old. Also check the residual value at the end of the term to make sure it is not too high.
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