Positive Aspects of Leasing a Pre-Owned Car
When shopping for a new car, there are an increasing variety of options available to consumers nowadays. You can buy a new car, lease a new car, or buy a used, pre-owned car. There is one option many people may not be aware of, though, which is leasing a pre-owned car.
Used car leases are a little bit of an industry secret. Not every dealership will offer them, and they are often not advertised. But if the shopper is willing to put in the time and research, leasing a pre-owned car can be a smart choice, enabling you to get a higher quality car for a lower price.
Typically, around 30% of new cars sold are leased. Due to the increase in people opting to lease new cars rather than buy them outright in recent years, car dealers are facing the issue of what to do with the ever-growing number of leased cars that are returned after the terms of the lease expire. These cars are often in great condition and have very low mileage, and leasing them again gives dealers another option for how to turn them back around.
How do used car leases work?
As a rule, used cars are only eligible for leases if they are certified pre-owned, less than 4 years old, and have less than 48,000 miles. The general process is the same as a regular lease. The lender will calculate the vehicle’s residual value, establish a payment schedule based on the difference between the sales price and the residual value, and assign an interest rate. Interest rates tend to be a bit higher on used car leases. Nevertheless, because of the lower sales price and lower rate of depreciation, the overall cost is still less than leasing a new car. Just as with a lease on a new car, the consumer has the option to buy the used car at the end of the lease term, which is usually a couple of years.
What are the benefits of leasing a used car?
The reason more and more people are choosing leasing over purchasing is lower monthly payments. This is even more true when leasing a used car. You can also get a nicer car for your money when leasing compared to buying. Also, the value of a brand new car can depreciate rapidly, and this is less of an issue with used cars. Typically, the sales tax on used vehicles is lower due to state rules, which will help save people money in the initial transaction as well as the monthly payments.
Leasing a used car may also help people get the car of their dreams, or a more luxury model than they would have been able to afford otherwise. A pre-owned Lexus may end up costing less than a brand new Toyota.
Considering that many used cars that are leased began their lives as new cars that were leased, they are usually in excellent condition. The fact that a vehicle is certified pre-owned also offers certain protections, ensuring the customer is receiving a safe and secure car. Many certified pre-owned vehicles also have a powertrain warranty up to 100,000 miles, which is a great reassurance, especially if you plan to purchase the vehicle upon the conclusion of the lease.
Used car leases are great when it comes to affordability of purchasing the car at the end of the lease. However, if you decide you don’t like the car or have any problems with it, you can easily turn it back in at the end of the lease and move on.
Another advantage of leasing a pre-owned car is that the older the car you are driving, the cheaper it is to insure, usually.
How Automotive Imports Can Help
Automotive Imports has been servicing the areas of Boulder, Lakewood, Centennial, Westminster, Littleton, and Denver, Colorado for years. In addition to servicing cars, specializing in those designed by German engineers such as Audis, BMWs, Porsches, Mini Coopers, and Mercedes, we also offer a great inventory of used and pre-owned cars for purchase and lease, as well as a wide variety of financing options to suit all of your needs.