Leasing a used car could save you hundreds on your monthly bill, but it comes with extra risk and leasing a used car on a car lot usually does not give you the most cost-effective deal. Private lease swapping can result in a cheaper payment and allow you to forgo some of the fees normally charged to customers.
Identification
It is possible to lease a car on a car lot, but it is the dealer's choice whether to offer this or not. Leasing a car a few years after the manufacture date could drastically lower your monthly payment, as cars tend to depreciate the most during the first three years after the consumer drives it off the lot, according to a July 2004 article in USA Today.
Risks
You must pay for damages to a leased car, even though the dealership owns the title. Cars significantly lower in value during the first few years of their life because of the higher incidence of mechanical breakdowns. A three-year old car, for example, has twice as many problems as a one-year old car, according to Consumer Reports. It is also harder to predict the future value of the car. You could be paying more than you should for car in year five if the dealer understates its loss in value.
Lease Trading
An alternative to leasing a used car from a dealer is lease trading. Private parties can resell their lease, which is often far cheaper than a dealer's. This is because the seller is less likely to charge any fees and may offer a competitive rate to get the car off his hands. Lease trading also allows you to have a car for a shorter length of time than an auto loan or a traditional car lease.
Tip
If you go with a leased used car from a dealer, you can still negotiate a lower price. The warranty should last for the duration of the lease and the dealer should go over the actual coverage guidelines. You can opt to take the car to a mechanic for an inspection and run a vehicle history report on it if you want to be thorough about your agreement. In some cases, you may be able to bargain with private sellers, as some may offer a cash bonus to quickly take their lease or pay the transfer fee.
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