They're fancy, shiny, and packed with great tech - and of course, they’re brand new. You can’t possibly lease a used car, right?
Wrong. It’s actually becoming more and more common to lease a used car. It’s admittedly a slightly more affordable option than leasing a new car.
Is it a good idea though? The best part of leasing is that you get a brand new car that isn’t going to break down, so why would you lease a used one?
Having said that, we’re going to run you through what the process is like for leasing a used car, and explain why you’re much better off leasing a new car.
How does used vehicle leasing work?
Used vehicles that are available for leasing are usually manufacturer certified pre-owned, less than 4 years old and under 50k miles - so you can’t lease that 2008 Fiesta ST you wanted when you were 16. Sorry!
In terms of how used car lease deals work, it follows the exact same structure as when you lease a new car.
You make an initial payment (known as the initial rental - essentially a deposit) and the following monthly payments are calculated based on how much value is left on the vehicle. You’re essentially paying the depreciation.
The monthly payment is made for the duration of the contract length, which is typically between 2-5 years. The monthly cost obviously lowers the longer the contract, and what your mileage allowance is.
If you go over your annual mileage allowance for your personal lease, you’ll need to pay the excess mileage charge, which can be ludicrously high.
Why would I lease a used car?
Part of the appeal of leasing is having a fancy new car that you don’t have to worry quite as much about maintaining it (of course, you still have to maintain your lease car, it is just less likely that things will go wrong off the bat). So why would you want a lease deal on something that is far more likely to break, and that you’re going to have to worry about MOT’ing during the contract term?
Here are a few reasons why someone might want a used car lease:
- Cheaper per month: This is perfect if your car lease negotiation techniques didn't work. Your monthly payment is going to be cheaper because an older car depreciates far less than a newer one - an older Toyota won’t depreciate as much as brand new Volvo SUV. However, with more maintenance required with an older car, this might balance out over time!
- Insurance: As the car isn’t worth as much as a new car, your insurance might be cheaper as it won’t cost the insurance company much to replace in the event of a write-off.
- Poor credit: "Do you need good credit to lease a car?" Yep, you pretty much always do. So, with a used car leasing, the risk for the broker is lessened, so you're more likely to be accepted with poor credit (but not always).
Should I just lease a new car instead?
In our ever so slightly biased opinion, yes. But hear us out, we bet you’ll agree that a new car is:
- Less hassle: Take out a lease on a new car with a contract of 3 years or less and all you need to do is get the car serviced, keep it clean, and don’t crash it! No MOT required. Also, you can sign up for a maintenance package with your leasing company/finance company and have peace of mind for the duration of your contract.
- Under warranty: Most manufacturers offer a 3-5 years manufacturer’s warranty. If you rent an older car, it’ll likely be out of warranty by the time your contract ends.
- Safer: In-car safety features improve every year. By leasing a new car, you can make sure that you have the most up to date safety features to keep you and your family safe while driving.
- More fun: Cars tend to get more fun to drive and feature better tech than their older counterparts.
- Better for the environment: Most vehicles are getting more and more Co2 efficient. Leasing a new vehicle means you’re likely getting a car that pollutes far less than an older one - especially if you go for a hybrid or an electric.
- Has that new car smell: It’s definitely a thing. You’d rather be in a brand new BMW coupe than an old Peugeot Hatchback that’s seen one too many McDonalds drive-thrus.
We think leasing a used car is a bad idea. Once you’ve taken into account the inevitable maintenance and MOT fees you need to pay, you’re not saving much money to drive an older, shabbier car.
Leasing a new car allows you to drive the Audi or Mercedes-Benz of your dreams for a low monthly price. If you opt for a maintenance package, you don’t even have to worry about servicing the car - this is just a figure added on to your monthly rental, so you can relax until the end of the contract.
Even if you’re on a budget and you're wondering whether to buy or lease a car, we recommend waiting around for some special offers on a new car - you’ll be surprised at how affordable some leasing deals can be! You might be able to pick up a car you never thought you’d afford.
To make sure you don’t miss those deals, make sure you regularly visit Lease Fetcher to check the dealership that offers the cheapest deal for your car of choice!