Can I Lease a Used Car

Yes, you can lease a used car—especially certified pre-owned (CPO) models from dealerships. While not all used cars qualify, many manufacturers and dealers now offer leasing options on late-model, low-mileage vehicles. This guide covers everything you need to know about leasing a used car, including pros, cons, costs, and how to find the best deals.

Key Takeaways

• Leasing a used car is possible: Many dealerships and manufacturers offer lease programs for certified pre-owned (CPO) vehicles, typically 1-3 years old with low mileage.
• Lower monthly payments: Used car leases often cost less per month than new car leases because the vehicle’s depreciation is slower and the capitalized cost is lower.
• CPO programs add value: Certified pre-owned vehicles come with extended warranties, inspections, and roadside assistance, making them safer to lease than non-certified used cars.
• Not all used cars qualify: Leasing is usually limited to late-model, low-mileage vehicles from reputable brands with strong residual values.
• Watch for mileage and wear limits: Like new car leases, used car leases have mileage caps and condition requirements—exceeding them can lead to extra fees.
• Credit matters: Lenders still check your credit score when leasing a used car, so good credit helps you secure better terms.
• Compare total cost of ownership: While monthly payments may be lower, factor in potential maintenance, insurance, and end-of-lease fees before deciding.

Can I Lease a Used Car? The Short Answer

Yes, you absolutely can lease a used car—but with some important caveats. Unlike buying a used car outright, leasing a pre-owned vehicle isn’t as straightforward as walking into any dealership and signing a contract. Most used car leases are offered through certified pre-owned (CPO) programs by major automakers like Honda, Toyota, Ford, and BMW. These programs provide a middle ground between the affordability of a used car and the reliability of a new one.

So why isn’t leasing used cars more common? For starters, leasing is traditionally associated with new vehicles because the financial model is based on predictable depreciation. New cars lose value quickly in the first few years—this drop in value is what you’re essentially “paying for” during a lease. Once a car is a few years old, its depreciation slows down, which changes the math for lenders. However, many manufacturers have adapted by offering lease options on late-model CPO vehicles, making it easier than ever to enjoy lower monthly payments without sacrificing peace of mind.

How Does Leasing a Used Car Work?

Leasing a used car works similarly to leasing a new one, but with a few key differences. Instead of paying for the full depreciation of a brand-new vehicle, you’re covering the expected drop in value over the lease term—usually 24 to 36 months. Because the car has already taken the biggest depreciation hit in its first year, the monthly payments are typically lower.

Here’s a simple breakdown of how it works:

• Choose a CPO vehicle: Most used car leases are available only on certified pre-owned models. These cars are typically 1–3 years old, have low mileage (under 45,000 miles), and pass a rigorous inspection.
• Negotiate the capitalized cost: This is the price of the car you’re leasing. Since it’s used, this number is lower than a new car’s MSRP, which helps reduce your monthly payment.
• Set the residual value: The leasing company estimates what the car will be worth at the end of the lease. A higher residual means lower monthly payments.
• Agree on mileage and terms: Most leases include a mileage limit (e.g., 10,000–15,000 miles per year). Exceeding it results in per-mile charges.
• Make monthly payments: You pay for the car’s depreciation plus interest (called the money factor), taxes, and fees.
• Return or buy at the end: At the end of the lease, you can return the car, lease a new one, or purchase the vehicle at its residual value.

For example, imagine you lease a 2022 Honda CR-V CPO with 20,000 miles. The original MSRP was $32,000, but the CPO price is $26,000. The leasing company estimates it will be worth $18,000 after a 36-month lease. You’re essentially paying for the $8,000 difference in value, plus fees and interest—resulting in lower monthly payments than if you leased a brand-new CR-V.

Who Offers Used Car Leases?

Not every dealership or lender offers used car leases, but many major automakers do through their CPO programs. Brands like:

• Honda Certified Pre-Owned
• Toyota Certified Used Vehicles
• Ford Certified Pre-Owned
• Chevrolet Certified Pre-Owned
• BMW Premium Selection
• Mercedes-Benz Certified Pre-Owned

These programs often include lease financing options directly through the manufacturer’s financial services division (e.g., Honda Financial Services, Toyota Financial Services). Some independent dealerships may also offer lease-like financing on used cars, but these are less common and may not have the same protections as CPO leases.

Benefits of Leasing a Used Car

Leasing a used car isn’t just a budget-friendly alternative—it comes with several real advantages that make it an appealing option for many drivers.

Lower Monthly Payments

This is the biggest draw. Because the car has already depreciated significantly, the amount you’re financing (the difference between its current value and its residual value) is smaller. For example, leasing a 2-year-old Toyota Camry might cost $250–$300 per month, while a new one could run $400–$500. That’s a savings of $150 or more each month—money you can put toward savings, travel, or other expenses.

Lower Upfront Costs

Used car leases often require a smaller down payment (or even $0 down in some promotions). Since the capitalized cost is lower, the security deposit and first month’s payment are also reduced. This makes it easier to get into a reliable vehicle without draining your savings.

Warranty Protection

One of the biggest concerns with used cars is reliability. But CPO vehicles come with extended manufacturer warranties—often covering up to 7 years or 100,000 miles from the original in-service date. This means you’re protected against major repairs during your lease term, giving you the confidence of a new car with the price of a used one.

Newer Features Without the New Car Price

Many CPO vehicles are only 1–2 years old, so they still have modern safety features like blind-spot monitoring, adaptive cruise control, Apple CarPlay, and advanced driver assistance systems (ADAS). You get nearly the same tech and comfort as a new car, but at a fraction of the cost.

Flexibility at the End of the Lease

At the end of your lease, you’re not stuck with a depreciating asset. You can simply return the car and walk away, upgrade to a newer model, or even buy the vehicle if you’ve grown attached to it. This flexibility is ideal for people who like to change cars every few years or aren’t ready to commit to ownership.

Drawbacks and Risks of Leasing a Used Car

While leasing a used car has clear benefits, it’s not the perfect solution for everyone. There are some potential downsides to consider before signing on the dotted line.

Limited Selection

Not every used car is available for lease. Most programs restrict leasing to late-model, low-mileage CPO vehicles from the same brand. If you’re looking for a specific make, model, or trim that’s not part of a CPO program, you may be out of luck. This limits your options compared to buying a used car outright.

Higher Risk of Mechanical Issues

Even with a warranty, used cars are more likely to need repairs than new ones. While CPO inspections reduce this risk, they don’t eliminate it entirely. If something breaks outside the warranty coverage, you could face unexpected costs—especially if the issue arises near the end of your lease.

Mileage and Wear Restrictions Still Apply

Just like new car leases, used car leases come with mileage limits and condition requirements. If you drive more than 12,000–15,000 miles per year, you’ll pay extra per mile. Similarly, excessive wear and tear (dents, stains, scratches) can result in end-of-lease charges. This can be a problem if you’re using the car for work, road trips, or have a growing family.

No Equity Build-Up

When you lease, you’re essentially renting the car. You don’t build equity, and you don’t own the vehicle at the end. If your goal is long-term savings or building asset value, buying a used car (even with a loan) might be a better choice.

Potential for Higher Interest Rates

Some lenders charge slightly higher interest rates (money factors) on used car leases compared to new ones. This is because used cars are seen as slightly riskier investments. Be sure to compare financing terms and ask about any fees or markups.

Used Car Lease vs. Buying Used: Which Is Better?

This is one of the most common questions people ask: Should I lease a used car or just buy one? The answer depends on your financial goals, driving habits, and lifestyle.

When Leasing a Used Car Makes Sense

Leasing is ideal if you:

• Want lower monthly payments and minimal upfront costs
• Prefer driving a newer car every 2–3 years
• Don’t drive more than 12,000–15,000 miles per year
• Want warranty protection and peace of mind
• Don’t want to deal with long-term maintenance or resale

For example, a young professional who commutes 30 miles a day and likes having the latest tech might prefer leasing a CPO Honda Accord. They get a reliable, feature-rich car with low payments and can upgrade in three years.

When Buying a Used Car Is Better

Buying (with a loan or cash) is better if you:

• Plan to keep the car for 5+ years
• Drive a lot (over 15,000 miles per year)
• Want to build equity and avoid monthly payments long-term
• Prefer full ownership and customization freedom
• Are comfortable handling maintenance and repairs

For instance, a family with two kids who drives 20,000 miles a year might be better off buying a used minivan. They’ll pay more upfront but save money in the long run by avoiding lease fees and mileage penalties.

Cost Comparison Example

Let’s compare two scenarios over 5 years:

• Leasing a CPO 2022 Toyota RAV4: $300/month for 36 months, then lease a new one for another 24 months at $350/month. Total cost: $19,800. You own nothing at the end.
• Buying a used 2020 RAV4 for $24,000: $400/month loan payment for 60 months. Total cost: $24,000. You own the car outright and can sell it or keep driving it.

In this case, leasing saves $4,200 over 5 years—but you have nothing to show for it. Buying costs more upfront but gives you an asset. The best choice depends on your priorities.

How to Find and Lease a Used Car

If you’ve decided leasing a used car is right for you, here’s how to get started.

Step 1: Check Your Credit Score

Your credit score affects your lease terms. Most lenders prefer a score of 660 or higher for the best rates. Check your credit report for errors and consider improving your score before applying. Even a small boost can save you hundreds over the lease term.

Step 2: Research CPO Programs

Visit manufacturer websites or use tools like Edmunds, Kelley Blue Book (KBB), or Cars.com to search for CPO vehicles available for lease. Filter by “lease eligible” or “certified pre-owned” to narrow your options. Look for models with strong reliability ratings and good resale value.

Step 3: Compare Lease Offers

Don’t just go with the first deal you see. Compare offers from multiple dealerships and brands. Look at:

• Monthly payment
• Down payment (cap cost reduction)
• Mileage allowance
• Lease term
• Money factor (interest rate)
• Warranty coverage

Use a lease calculator to estimate payments and understand how changes in terms affect your cost.

Step 4: Negotiate the Price

Even though it’s a lease, you can still negotiate the capitalized cost (the price of the car). Research the car’s market value using KBB or Edmunds, and use that as leverage. A lower price means lower monthly payments.

Step 5: Read the Fine Print

Before signing, review the lease agreement carefully. Check for:

• Early termination fees
• Excess wear and tear guidelines
• Mileage overage charges
• Disposition fees (charged when you return the car)
• Gap insurance (often included, but confirm)

Ask questions if anything is unclear. A good dealer will explain all terms in plain language.

Step 6: Take Delivery and Enjoy

Once you sign, inspect the car thoroughly. Make sure it matches the description, has no undisclosed damage, and all features work. Take photos for your records. Then, drive off with confidence—you’ve got a great deal on a quality used car.

Tips for Getting the Best Used Car Lease Deal

Want to maximize your savings and minimize headaches? Follow these expert tips:

Time Your Lease Right

Dealerships often run promotions at the end of the month, quarter, or model year. Shopping during these periods can score you lower payments or waived fees.

Consider a Shorter Lease Term

Shorter leases (24 months) often have lower mileage limits but may offer better residual values and lower depreciation costs. If you don’t drive much, this can be a smart move.

Look for Loyalty or Conquest Offers

Some manufacturers offer incentives for returning lessees or switching from a competitor’s brand. These can include cash bonuses or reduced money factors.

Bundle Services

Some dealers offer free maintenance, roadside assistance, or tire protection as part of the lease. These perks add value and can save you money down the road.

Don’t Over-Option the Car

Adding extras like premium sound, navigation, or leather seats increases the capitalized cost—and your monthly payment. Stick to the features you really need.

Use a Lease Broker (Optional)

Lease brokers can help you find the best deals by negotiating with multiple dealers. They charge a fee, but it may be worth it if they save you hundreds on your lease.

Final Thoughts: Is Leasing a Used Car Right for You?

Leasing a used car is a smart, practical option for many drivers—especially those who want the reliability of a newer vehicle without the high cost of a new car. With lower monthly payments, warranty protection, and the flexibility to upgrade regularly, it’s a great way to enjoy modern features and peace of mind.

However, it’s not a one-size-fits-all solution. If you drive a lot, plan to keep a car long-term, or want to build equity, buying used might be better. The key is to weigh your priorities, do your research, and compare all your options.

Ultimately, the question “Can I lease a used car?” has a clear answer: yes—and it might just be the best financial move you make this year.

Frequently Asked Questions

Can I lease any used car?

No, most used car leases are limited to certified pre-owned (CPO) vehicles from dealerships. These are typically 1–3 years old with low mileage and pass a thorough inspection. Non-CPO used cars are rarely available for lease.

Are used car lease payments really lower than new car leases?

Yes, because the car has already depreciated, the amount you’re financing is smaller. This results in lower monthly payments—often $100–$200 less than a comparable new car lease.

Do I need good credit to lease a used car?

Yes, lenders check your credit score when approving a lease. A score of 660 or higher usually qualifies for the best rates. Lower scores may still be approved but with higher interest or larger down payments.

What happens if I go over the mileage limit?

You’ll be charged a per-mile fee, typically $0.10–$0.25. For example, driving 2,000 extra miles could cost $200–$500. Some leases offer mileage buy-ups upfront to avoid surprise charges.

Can I buy the car at the end of the lease?

Yes, most leases allow you to purchase the vehicle at its residual value. This is often a good deal if the car is in great condition and the buyout price is below market value.

Is gap insurance included in a used car lease?

Most manufacturer-backed leases include gap insurance, which covers the difference between what you owe and the car’s value if it’s totaled. Confirm this in your lease agreement to be safe.