You cannot go from a vehicle purchase to a lease contract after purchase, although you can buy a lease at any time during the contract term. If you haven't completed the purchase paperwork for your vehicle with your dealership, you may still have an opportunity to lease the car instead.
Before You Purchase
If you haven't signed your new car paperwork yet, inquire about leasing with your purchasing dealer. To view current lease offers, visit the manufacturer's website to find out about current lease terms, mileage allowance, down payment requirements and monthly payment amount. If you don't see lease options online, ask your dealership for details; some vehicles are not available for leasing. Even if the manufacturer doesn't offer a leasing option on the vehicle you want, the dealer may be able to lease you a car using another lease provider.
Lease Process
Leasing differs from a purchase or finance, so not all auto loan providers offer the option. A manufacturer's bank usually offers a lease option. For leasing, the bank bases payments on depreciation. Depreciation is based on the vehicle's price, expected mileage allowance and term. Lessees usually pay for about 50 percent of the vehicle's total price over the contracted term. For this reason, leasing is rarely available for used vehicles. Leasing banks aren't set up to inspect used cars for value or able to accommodate all used car pricing, which differs by dealer and area. New vehicle leasing is based on the car's sticker price.
Credit Issues
Purchase and lease requirements differ. You can finance or pay cash for a vehicle with poor credit, but excellent credit is required for leasing. Even if you change your mind in the beginning of your purchase, you might not obtain an approval without good to excellent credit. You can, however, use a co-signer to obtain a vehicle lease. Otherwise, consider financing or purchasing outright. Subprime lenders, who offer loans to poor-credit borrowers, do not offer a lease option at all.
Other Options
You do not have to wait until your loan is satisfied to get rid of your car. Many loans equal out in payoff amount and vehicle value after around two to three years of payments. If you don't want to keep your vehicle beyond three years, which is a common leasing term, plan ahead to increase your vehicle's equity. Pay more toward your loan's principle during the term of your loan. After several years, check your car's value against its loan payoff amount. You can trade or sell your vehicle as long as you satisfy your loan amount. If you owe less than the vehicle's value, you can keep the profit.
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