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Used Car Leasing

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.

Used car leasing: How does used car leasing work?

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.