Save Money and Lease a Used Car
Here’s something you may not know. It is possible to lease a used car. It’s a great way to get into a car you could not otherwise afford. There are a couple options available for leasing a used car. One is through a dealership and the other is through websites like Swapalease, LeaseTrader, and LeaseCompare. RELATED: Millennials Like Leasing More than Other Generations
As Scot Hall, executive vice president at Swapalease, said, there are transferable leases where you, in effect, pick up the remainder of someone else’s lease. Hall explained that Swapalease is a matchmaker between two sides. “We’re kind of a dating service for cars,” he said.
He said it breaks down to three steps. First, a lease seller finds a lease buyer to take over a lease. Then, the leasing company oversees a credit check. Finally, the lease is transferred from the seller to the buyer. Presto, you have a used car for the remainder of the lease (but you're going to need strong credit: sub-prime need not apply).
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So, why would somebody want to lease a used car? “Cars are getting more expensive – leasing makes it more affordable,” Hall said. Heck, the average new car price is $33,560. You would need to put down about $2,999 and pay $299 a month for a 36-month lease on a new car.
On a used car, though, you can pay the same amount for a $35,000 vehicle that was probably worth about $42,000 new one year earlier. Wait two years and you can get a car that was worth $45,000 new. That’s usually good for a bump in engine size and possibly a navigation system and better audio.
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However, your financial risks with a leased used car are higher, according to Consumer Reports. It says a three-year old car has twice the likelihood of mechanical problems compared to a one-year old car. You might want to see if a certified pre-owned used car is available for lease.
One thing to consider before leasing any car (new or used) is your insurance premium. They can change when leasing and be higher. That needs to be factored into your monthly costs.