Can You Lease a Used Car? Everything You Should Know
Yes, you can lease an old car, particularly certified pre-owned models from dealers you can trust. Leasing a used car is similar to leasing a new car, but it tends to be cheaper on a monthly basis. It's a good choice for people who want to save money on driving or try a more expensive model. This guide goes over how used car leases work, their pros and cons, and when it makes sense to get one.
Can You Lease Cars That Aren’t New?
A lot of people wonder if it's possible to lease a used car. Yes, you can lease a used car or a certified pre-owned (CPO) car at a franchised dealership that offers programs backed by the manufacturer. Edmunds says that leasing a used car is a lot like leasing a new car, but there are some differences. The car's estimated lease end value, also called its residual value, is based on what it will be worth after the lease period. This means the monthly payments for the lease are lower because used cars have already lost value.
CPO leasing is popular with brands like Lexus, Lincoln, Mazda, Mercedes-Benz, MINI, Mitsubishi, Nissan, Porsche, and Ram. This is because these certified used cars have passed inspections and come with warranties. Car companies only allow models that are under five years old and have less than 60,000 miles.
How Used Car Leasing Works
Used car leasing work follows the same principles as new leases. The dealer determines the car’s current value, expected future value, and lease term length to calculate the monthly payment amount.
Certified pre-owned vehicles: Only CPO vehicles qualify for used leases through authorized dealers.
Mileage limits: Most used car leases include limits, typically 10,000 to 15,000 miles per year.
Lower car insurance rate: Insurance costs are often lower than new car leasing because the car’s total value is reduced.
Franchised dealership only: Used leases are not available at independent lots.
Why Drivers Choose Used Car Leasing
Leasing a used car can save you money and still give you access to luxury brands like Mercedes-Benz, Lexus, or Infiniti. Since cars depreciate most in the first few years, you pay for less depreciation during your lease term.
Lower monthly payments: Costs less than new car leasing.
Potential for lease buyout: You can purchase the car outright at lease end.
Lower insurance rates: Used car leases typically carry cheaper insurance.
Access to high-end models: Drive premium vehicles without high upfront costs.
What’s the Oldest Car You Can Lease?
Toyota of Louisville says that most car manufacturers only let people lease used cars that are certified pre-owned, less than five years old, and have less than 60,000 miles. These models can't be leased until they pass inspection and certification by the maker.
CPO leasing is done by many companies, such as Honda, Hyundai, Infiniti, Jeep, Kia, Lexus, Lincoln, Mazda, Mercedes-Benz, MINI, Mitsubishi, Nissan, Porsche, Ram, Toyota, and Volkswagen. But Chrysler, Dodge, Ferrari, and Fiat might not always offer certified used car leasing programs.
Age, Mileage, and Certification Rules
Used leases are usually available for newer models that have proven reliability and resale strength.
Under 5 years old: Most CPO vehicles fall into this range.
Under 60,000 miles: Mileage affects the car’s estimated lease-end value.
Manufacturer inspection: Cars must meet CPO standards for quality and safety.
Franchised dealership only: Independent lots can’t offer manufacturer-certified leases.
Advantages of CPO Leasing
Leasing a certified pre-owned vehicle offers both savings and security. These cars often come with extended warranties and roadside assistance, similar to new car leases.
Added protection: Warranty coverage reduces repair risks.
Lower monthly payments: Costs less due to depreciation.
Dealer reliability: Only certified franchised dealerships handle these leases.
Peace of mind: Cars are inspected and backed by manufacturers.
What Is the 1 Rule for Leasing a Car?
The "1% rule" is a fast and easy way to see if a lease deal is fair. Gilchrist Automotive says that your monthly lease payment should be around 1% of the price of the car before taxes and fees. A used car that costs $40,000 should cost about $400 a month, for instance.
How to Use the 1% Rule
The rule helps compare deals between new and used car leasing options and spot overpriced offers.
Calculate: Divide the car price by 100 for a fair monthly payment estimate.
Compare: Check offers from multiple dealers and lenders.
Include all costs: Add insurance costs and fees for accuracy.
Review estimated lease-end value: Understand what the car is worth at lease end.
Why It Matters for Used Car Leasing
Knowing this simple rule helps drivers negotiate confidently and avoid inflated lease offers.
Budget clarity: Predict your monthly lease payment easily.
Better decisions: Choose the best value between a new vehicle and a used one.
Negotiation power: Helps ensure fair deals at franchised dealerships.
Why Don’t They Lease Used Cars?
A lot of people who drive cars wonder why used car leasing isn't as popular as new car leasing. U.S. News says that one big reason is the unpredictable resale value. Cars lose value at different rates, which makes it hard for lenders to guess how much a used car will be worth at the end of the lease. Dealers and lenders take a big risk when they try to figure out a fair monthly lease payment if that value is unknown.
It's also true that most manufacturers focus on leasing new models. The National Automobile Dealers Association (NADA) and the Automobile Dealers Association NADA say that dealers like new leases better because they are easier to predict, they have warranties, and the cars are worth more when they are sold again. In order for used car leasing to work, the car has to be a certified pre-owned (CPO) model with full service records.
Other risks and challenges:
Unpredictable value: Cars depreciate at different rates, affecting estimated value.
Maintenance concerns: Older cars may require more repairs during the lease term.
Limited inventory: Few franchised dealership programs support used leasing.
Insurance differences: While used leases may have lower insurance rates, they also come with higher wear-and-tear risk.
Why Dealers Rarely Offer Used Car Leasing
Many manufacturers, including Acura, Audi, BMW, Chrysler, Dodge, Ferrari, Fiat, Honda, Hyundai, Infiniti, Jeep, Kia, Lexus, Lincoln, Mazda, Mercedes-Benz, Mitsubishi, Nissan, Porsche, Ram, Toyota, Volkswagen, and Volvo, prefer offering new leases. Used car leasing facts show that only certain CPO models qualify, and those must pass strict inspection standards.
Some brands like Mercedes-Benz and BMW do allow leasing certified used vehicles, but terms vary. Dealers also face mileage limits and the challenge of balancing resale value at the estimated lease end.
How Much Is a Lease on a $45,000 Car?
Auto Bandit says that a $45,000 car usually costs $300 to $500 a month, depending on the down payment, credit score, and residual value. This amount for the monthly payment is partially based in part on the car's estimated value at the end of the lease, the interest rate, and the length of the lease.
Car leasing facts to remember:
Monthly payment: Depends on depreciation and financing rate.
Mileage limits: Higher mileage reduces the car’s estimated value.
Lower insurance rates: Used cars often qualify for cheaper coverage.
Potential for lease buyout: Drivers can purchase the car after the lease ends.
Is Leasing a Used Car Worth It?
Used car leasing work can be a smart option for buyers who want lower costs or plan a lease buyout later. It’s ideal for those who value flexibility and prefer a shorter commitment.
Benefits of a used car lease:
Budget-friendly: Lower monthly lease payment compared to new cars.
Flexibility: Option for lease buyout or upgrade.
Try before buying: A test drive-like experience for premium models.
In the end, car leasing is offered by many manufacturers, but new car leasing remains dominant. Knowing the difference between the sale price and residual value will help you make the right decision. The friendly finance team at your local dealership can help you make a plan that works for your life and your budget.
Final Thoughts
In most cases, leasing a used car is a good way to save money and still drive a dependable car. Leasing a used car works best with certified pre-owned models from a brand-specific dealership that follows strict inspection rules. Leasing a car instead of buying a new one usually means a lower monthly payment, which gives budget-conscious drivers more options.
Cars lose value quickly, but leasing helps you avoid the costs of owning a car long-term and gives you the option to buy the lease later. Leasing an older car may be the right choice for you if you want lower insurance rates, shorter commitments, and access to high-end models. Before you sign, make sure to look at the mileage limits, warranty information, and estimated lease-end value.
FAQs
Can you lease a used car with a low car lease monthly payment?
Yes, you can lease a used car with a lower car lease monthly payment depending on the estimated lease-end value and residual terms.
Does used car leasing work the same as new car leasing?
Generally speaking, used car leasing work is similar to new car leasing but applies to certified pre-owned vehicles with limited mileage.
What are the benefits of a used car lease?
A used car lease offers lower monthly payments, lower insurance rates, and potential for lease buyout at the end of the lease term.
Can I lease from a franchised dealership for certified pre-owned vehicles?
Yes, a franchised dealership allows leasing of certified pre-owned vehicles from brands like Mercedes-Benz, Lexus, and Toyota with flexible lease terms.
What should I check before signing a lease?
Check car leasing facts such as mileage limits, residual value, insurance costs, and estimated lease-end terms to ensure a fair deal that matches your car lease monthly payment.
