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Can You Lease a Used Car?

By Autolist Staff | February 23, 2019

Can you lease a used car?

Many consumers don't know this but it is possible to lease a used car instead of a new car. Leasing a used car is best with vehicles that retain their value well, such as Toyota and Honda. Although some shoppers don't like the idea of making a car payment indefinitely (as opposed to a loan that eventually ends), it's a good idea to think of a car lease like a car subscription. You can drive the vehicle for a few years and then trade it in for a newer model or a different model entirely.

Pros of Leasing a Used Car

The pros of leasing a used car are similar to those of leasing a new car. Leasing gives you the chance to own a level of vehicle you might not be able to afford otherwise (like a bigger car or one from a luxury brand). For example, luxury brands like Mercedes and Land Rover tend to hold their value as used vehicles.

Another major benefit of a lease is that it eliminates the hassle of trying to trade something in or sell it privately. Many people have difficulty finding time in their busy lives to list their vehicle, find a buyer and negotiate the sale. On the other hand, trading it in to a dealer almost always loses you money. Leases make the process hassle-free since the end of a contract is negotiated at the beginning.

Another possibility is getting a short lease. This is where you sign up for a lease swap, which puts you into a lease that's in the middle of its term, essentially taking it over from someone else. The lease length could be as much as three years or even less than a year. This might be a good idea for someone who wants to briefly try out a new model or if they only need a vehicle for a short period.

Cons of Leasing a Used Car

When you lease a new car, you're obviously getting a vehicle with no extensive use and little to no mileage. Older cars always have the risk of problems after a decent amount of use. If you're attempting to take over a used car lease, then you'll likely have to pay an acquisition fee, whether it's from a lease trade site or a dealership. Sometimes it's possible to find a financial institution not charging a fee, but most charge up to $600.

Warranties also get trickier with used cars. Some cars may have remaining warranties, but bumper to bumper warranties are sometimes harder to get on a used vehicle. Another issue is that leases are based on the future value of a vehicle. For example, if you lease a new car for three years, the lease cost would be based on how much that car will be worth in three years. The con of taking over a used car lease is that it might be at an estimated lower value and you might get stuck paying the difference.

Look At Dealers First

Dealers that sell some of the aforementioned luxury brands often will offer lease deals on their used inventory. Look for your desired make and model and ask if there's a lease available. Many prospective car buyers don't even realize that it’s possible to lease a used car. It's less common to lease a used car, but that doesn't mean it's not an option at certain dealerships. As previously mentioned, high-end vehicle dealers are more likely to offer this.

Internet Lease Trades

One interesting option currently is swapping or trading leases. Various online sites allow you to either take over a used lease or get rid of your current one. Some of these sites include:

  • SwapALease.com
  • LeaseTrader.com
  • LeaseQuit.com

Taking over a used lease makes plenty of sense in certain situations. It can help you afford a car that you might not be able to buy outright or even lease new. It also enables you to potentially enter into a shorter contract if you take over a lease that's only a year or so away from ending.

Always Negotiate

Leasing a car is always a negotiable deal, just like buying one. To calculate what you should be paying each month for such a lease, take the current value of the vehicle you want, subtract what its value is likely to be at the end of your lease and then divide that by how many months your lease will be. That number tells you the potential monthly payment. Sometimes sellers even offer an incentive to have a lease taken over. Sometimes they'll offer to pay one or two payments to get out of it.

Get a Good Warranty

For a used car lease, a good warranty is especially important. Used cars are more likely to have problems and even though you won't own it, you're still responsible for fixing said problems. Make sure to ask about any available warranty when you negotiate the terms. Some vehicles will come with a transferable warranty and the dealer will likely offer an optional extended warranty.


Almost every state requires car insurance, whether it's a new car or used car lease. Each state has different minimum limits, but usually the leasing company will want more coverage than the minimum, and their requirements will be laid out in the terms of the lease. Liability coverage will usually be around 100,000/300,000 and comprehensive and collision will usually also be required.

High deductibles aren't usually desired by the leasing company as it lowers the odds of the owner getting the car repaired. However, lower deductibles usually also mean higher premiums. If you don't get enough coverage as stipulated by the lease terms, the company will then take out a third-party policy. They will then bill you for the coverage. When you get insurance coverage, you will need to add the leasing company as a payee and additional insured. The company is essentially considered another owner.