Can You Lease a Used Car?
Most people lease new vehicles, but leasing a used car is also an option at Parkway Honda. We have leases available across a range of certified pre-owned (CPO) Honda vehicles. These vehicles are up to six years old with low mileage and clean histories. They must also pass a comprehensive multi-point inspection, so you know you can trust their quality. For a lease vehicle you can count on, consider a certified pre-owned Honda from Parkway Honda.
Understanding Used Car Leasing
In principle, leasing a car is a lot like leasing an apartment. You make monthly payments to a finance company to use the vehicle, much like paying your landlord rent to live in an apartment. Because you don’t own a leased vehicle, there are usually some restrictions. For example, you can’t modify a leased vehicle. At the end of the lease period, you may have the option to purchase the vehicle or return it to the dealership.
How To Lease a Used Car
Leasing a used car couldn’t be simpler. The process usually involves these three steps:
Researching Used Car Lease Options
Not every dealership offers used car leases. It’s worth researching which local dealers offer this kind of financial arrangement and what used vehicles they’re happy to lease. This research should help you compile a shortlist of vehicles you’re interested in. Check the value of these vehicles using a reputable site like Kelley Blue Book so you can understand whether a dealership offers you a fair deal.
It’s also a good idea to start thinking about the different used car leasing options and what’s important to you. Consider the total vehicle cost and the monthly payments. You also want to understand annual mileage limits and whether they’ll suit your lifestyle. Checking out a dealership’s fees for early lease termination, acquisition, and the residual if you decide to buy the vehicle can also help you understand what to expect.
Negotiating with Dealers
Just like when you purchase a vehicle, you’re entitled to negotiate with the dealer for a lease agreement that suits you best. This starts with the price of the vehicle. Your research about the model’s market value can help you negotiate a competitive deal.
You can also negotiate the lease interest rate, sometimes called the money factor. You can convert this rate to the equivalent percentage rate by multiplying it by 2,400. Vehicle leases are much less risky for finance companies, as they own the vehicle and can easily repossess it if you don’t make your payments. So you should expect your percentage rate to be much lower than the interest rate for a loan on the same vehicle.
Your lease terms are also up for negotiation. Look closely at the mileage allowance, required down payment, and purchase-option price. If they don’t suit your finances or lifestyle, speak up during the negotiation period. Any changes you make could increase your lease payments, but it may be worth it in the long run. For example, if you exceed the annual mileage allowance, you’ll pay a surcharge for every extra mile. These surcharges could be more costly, so consider your daily commute, leisure activities, and vacation habits and negotiate for a higher limit if you need it.
Understanding the Lease Contract
Your lease contract will outline the terms of your agreement with the finance company that owns the vehicle. It should include:
- The vehicle’s value
- Your down payment
- Your lease instalments
- The lease period, typically 24 to 36 months
- The lease interest rate
- The purchase-option price
- The annual mileage allowance is usually between 12,000 and 15,000 miles
- Maintenance requirements
- Insurance requirements
- Wear and tear conditions
- Termination conditions
- End-of-lease options
Read the lease contract carefully. Our finance team will happily answer all your questions to make sure you understand your responsibilities before you sign a lease with us.
Lease-End Options
When your lease on the used car ends, you have the following options:
- Return the vehicle and walk away
- Purchase the vehicle, either with cash or a finance deal
- Lease a new vehicle
- Ask for an extension on your lease
Pros and Cons of Leasing a Used Car
There are several advantages to leasing a used car, including:
- Smaller down payments and monthly payments than purchasing the same model or leasing or purchasing a new vehicle.
- Most repairs are covered under the CPO warranty
- Easy end-of-lease process
- Simple to upgrade to a recent model every few years
However, it’s also important to understand the drawbacks, such as:
- Mileage limitations
- Continual monthly payments, unlike with a car loan, which is paid off
- Limited ability to personalize your ride
Weighing up the pros and cons can help you decide whether leasing a used car is right for you.
Alternatives To Leasing a Used Car
There are several alternatives to leasing a used car you might consider, depending on your needs and budget. If you’d prefer a vehicle that doesn’t have mileage limits or know you want to own your car in the end, you might prefer financing a used vehicle instead. You may also decide to buy a used car if you’d prefer a vehicle that’s not part of the Honda pre-owned certified program, such as an older, more affordable model.
You could also opt for a new car. As all our new vehicles are available for lease, you’ll have more options. We also offer exciting new car lease specials that could save you plenty. Our new cars are also available for purchase with competitive financing deals.
Visit Parkway Honda To Meet Your Perfect Used Vehicle for Lease Today
At Parkway Honda, we have a wide range of used vehicles available for lease to suit any taste and budget. Visit our Dover dealership to check out our inventory of certified pre-owned Honda vehicles. Our friendly team can answer all your questions, offer personalized advice, and organize your test drives. If you find the right vehicle, our finance team can create a lease agreement that works for you and guide you through the paperwork. At Parkway Honda, we make buying and leasing used vehicles easy.
0 comment(s) so far on Can You Lease a Used Car?