How Much Does it Cost to Lease a Used Car? [2023]

Are you considering leasing a used car? It's more common than you might think. In fact, according to a survey by Edmunds, used car leases made up 4.4% of all lease transactions in Q3 of 2022, up 0.9% from the previous year. But how much does it cost to lease a used car? Our team at Car Leases™ has all the answers, plus some expert advice on getting the best deal.

How to Lease a Used Car

The process of leasing a used car is similar to that of leasing a new car. However, there are some key differences to keep in mind.

Find the car you want: Start by doing some research on the car you're interested in. Look for the year, make, and model that fits your needs and budget. Don't forget to consider factors like maintenance costs and gas mileage.

Check the car's history: Just like with buying a used car, it's important to check the vehicle's history. Look for any accidents or major repairs that may affect its value.
Determine the car's value: The value of a used car can be a bit harder to determine than a new one, but there are websites like Kelley Blue Book and NADA that can give you an estimated value.
Negotiate the lease: When it comes time to negotiate, know that the price of a used car lease is based on the car's residual value, which is the estimated value at the end of the lease term. A higher residual value means lower lease payments, so look for cars that hold their value well.

Sign the lease: Once you've negotiated the terms of the lease, it's time to sign on the dotted line.

Used-Car Leasing vs. New-Car Leasing

There are pros and cons to both used-car and new-car leasing. Here are a few things to consider:

Pros of Leasing a Used Car

Lower monthly payments: Since used cars have already experienced a significant amount of depreciation, lease payments are typically lower than on new cars.
Less expensive to insure: Since the car is worth less than a new car, it is less expensive to insure.

More affordable luxury: You might be able to lease a luxury car that is out of your price range if you were to buy it new.

Cons of Leasing a Used Car

Limited selection: There may not be as many used cars available to lease as there are new cars, which could limit your options.
Higher interest rates: Since used cars have already experienced depreciation, leasing companies may charge higher interest rates to offset the risk.

Higher maintenance costs: Depending on the age and condition of the car, maintenance costs could be higher than those of a new car lease.

Pros of Leasing a New Car

Current technology: New cars often come with the latest technology and safety features.
More options: Since new cars are more widely available, you're likely to have more options to choose from.

Warranty coverage: New cars typically come with a manufacturer's warranty, which means you'll have coverage if anything goes wrong.

Cons of Leasing a New Car

Higher monthly payments: New cars come with a higher price tag, which means lease payments will be higher as well.
High depreciation: New cars lose their value quickly after being driven off the lot, which means you'll be paying for a lot of that depreciation in your lease payments.

Expensive insurance: New cars are often more expensive to insure due to their higher value.

Is it a Good Idea to Lease a Used Car?

Leasing a used car can be a great option for those who want a lower monthly payment and don't mind driving a slightly older car. However, it may not be the best option for everyone. Before you decide to lease a used car, consider the following:

Your driving habits: If you drive a lot or put a significant amount of wear and tear on your car, leasing a used car may not be the best option.
Your financial situation: If you're on a tight budget, a used car lease may make more sense than buying a new car.
Your lifestyle: If you're someone who likes to have the latest technology and safety features, leasing a new car may be a better fit for you.

Compare Car Leasing and Buying Options

When deciding whether to lease or buy a car, there are many factors to consider. Here are some pros and cons to both options:

Pros of Leasing a Car

Lower monthly payments: Lease payments are typically lower than loan payments, which means you can drive a nicer car for less.

Less maintenance: Since leases typically last between 2-4 years, most repairs and maintenance will be covered under the manufacturer's warranty.
Easy upgrades: When the lease is up, you can simply return the car and lease a new one, which means you'll always be driving a newer car.

Cons of Leasing a Car

Never own the car: At the end of the lease term, you'll have to return the car to the dealership.

Mileage restrictions: Most leases come with mileage restrictions, which can be limiting if you're someone who drives a lot.
Fees: Some leases come with fees for things like excess wear and tear, so be sure to read the fine print before signing.

Pros of Buying a Car

You own the car: Once the loan is paid off, the car is yours to keep or sell.

No mileage restrictions: Since you own the car, there are no restrictions on how much you can drive it.
Customize the car as you like: Since you own the car, you're free to make modifications and upgrades as you see fit.

Cons of Buying a Car

Higher monthly payments: Loan payments are typically higher than lease payments, which means you'll be paying more each month.

High depreciation: Cars lose their value quickly, which means you could end up owing more than the car is worth if you decide to sell it.
More Maintenance: Cars require regular maintenance, which can add up over time.