Can You Lease Used Car

Leasing a used car is not only possible—it’s becoming increasingly popular. With lower monthly payments, reduced depreciation risk, and access to certified pre-owned models, it’s a smart alternative to buying or leasing new. This guide breaks down everything you need to know to lease a used car confidently.

Key Takeaways

• Yes, you can lease a used car: Many dealerships and leasing companies now offer certified pre-owned (CPO) vehicles for lease, especially from brands like Honda, Toyota, and BMW.
• Lower monthly payments: Used car leases typically cost 20–40% less per month than new car leases due to slower depreciation and lower residual values.
• Certified pre-owned matters: Always choose a CPO vehicle with a warranty and inspection history to avoid hidden mechanical issues.
• Shorter lease terms available: Most used car leases last 24 to 36 months, giving you flexibility without long-term commitment.
• Mileage and wear limits still apply: Just like new leases, used car leases include mileage caps and condition requirements at return.
• Credit and eligibility requirements: Lenders may have stricter credit standards for used leases, so check your score and shop around.
• End-of-lease options: You can usually return the car, buy it outright, or lease another vehicle—just like with a new car lease.

Can You Lease a Used Car? The Short Answer

If you’ve ever wondered, “Can you lease a used car?”—the answer is a resounding yes. While leasing has traditionally been associated with brand-new vehicles, the market has evolved. Today, many drivers are choosing to lease used cars, especially certified pre-owned (CPO) models, as a cost-effective and flexible way to drive a reliable vehicle without the steep price tag of a new car.

This shift is driven by several factors: rising new car prices, improved vehicle longevity, and the growing availability of high-quality used cars with warranties. In fact, according to industry reports, used car leasing has grown by over 30% in the past five years. Dealerships and leasing companies now recognize the demand and are offering more options than ever before.

But before you sign on the dotted line, it’s important to understand how used car leasing works, what to look for, and whether it’s the right choice for your lifestyle and budget. This guide will walk you through everything you need to know—from how leases differ between new and used vehicles to tips for negotiating the best deal.

How Does Leasing a Used Car Work?

Leasing a used car operates on the same basic principles as leasing a new one, but with a few key differences. At its core, a lease is a long-term rental agreement. You pay to use the car for a set period—typically 24 to 36 months—and return it at the end of the term. However, when you lease a used car, the vehicle has already experienced some depreciation, which affects your monthly payments and the overall structure of the lease.

The Lease Structure for Used Cars

When you lease a used car, the leasing company (often the dealership’s finance arm or a third-party lender) calculates your monthly payment based on three main factors: the car’s current value, the residual value (what it’s expected to be worth at the end of the lease), and the money factor (similar to an interest rate).

Because a used car has already lost a significant portion of its value—often 20–30% in the first year—the depreciation during your lease term is much slower. This means the leasing company takes on less risk, and that savings is passed on to you in the form of lower monthly payments.

For example, imagine you’re comparing a new 2024 Honda Accord with a 2022 Honda Accord CPO. The new car might lease for $450 per month, while the used model could be as low as $280 per month—even with similar features and low mileage. That’s a savings of nearly $5,000 over a 36-month lease.

Who Offers Used Car Leases?

Not all dealerships or leasing companies offer used car leases, but many do—especially those affiliated with major brands. Brands like Honda, Toyota, Ford, BMW, and Mercedes-Benz often provide certified pre-owned leasing programs. These programs are designed to give customers the benefits of leasing (lower payments, warranty coverage, no long-term ownership hassle) with the value of a used vehicle.

You can also find used car lease options through online platforms like Carvana, Vroom, or even credit unions that partner with dealerships. Some independent leasing companies specialize in used vehicles, so it pays to shop around.

Lease Term and Mileage Limits

Used car leases typically come with shorter terms than new car leases—usually 24, 30, or 36 months. This makes sense, since the vehicle is already a few years old and may not have as much life left as a brand-new model.

Mileage limits are also standard. Most leases allow 10,000 to 15,000 miles per year. If you exceed this, you’ll be charged a per-mile fee—often $0.15 to $0.25—at the end of the lease. However, some lenders offer higher mileage allowances for a slightly higher monthly payment, which can be worth it if you drive a lot.

Pros and Cons of Leasing a Used Car

Like any financial decision, leasing a used car comes with advantages and drawbacks. Understanding both sides will help you decide if it’s the right move for you.

Advantages of Leasing a Used Car

One of the biggest benefits of leasing a used car is cost savings. Monthly payments are significantly lower than those for new car leases, and you’re not paying for the steepest part of a vehicle’s depreciation—the first few years.

For example, a new car can lose up to 20% of its value the moment you drive it off the lot. By leasing a used car, you avoid that initial hit. You’re essentially paying for the next phase of depreciation, which is much slower.

Another advantage is access to higher-end models. Because used luxury cars depreciate quickly, you might be able to lease a BMW 3 Series or a Lexus ES for the same monthly payment as a new Toyota Camry. This lets you enjoy premium features, better performance, and a more upscale driving experience without the new-car price tag.

Additionally, many used car leases come with warranty coverage. Certified pre-owned vehicles often include extended manufacturer warranties that cover major components like the engine, transmission, and electronics. This gives you peace of mind and reduces the risk of unexpected repair costs.

Finally, leasing a used car offers flexibility. If your needs change—say, you need a larger vehicle for a growing family or want to switch to an electric car—you can return the car at the end of the lease and move on without the hassle of selling it yourself.

Disadvantages of Leasing a Used Car

Despite the benefits, there are some downsides to consider. First, not all used cars are eligible for leasing. Lenders typically require the vehicle to be relatively new (usually 2–4 years old), have low mileage (under 45,000 miles), and be in excellent condition. This limits your options compared to buying a used car outright.

Second, credit requirements can be stricter. Because used cars are seen as higher-risk assets, leasing companies may require a higher credit score—often 680 or above—to qualify. If your credit is less than perfect, you might face higher interest rates or be denied altogether.

Third, you may have fewer customization options. Unlike buying, you can’t modify a leased car (like adding aftermarket parts or changing the paint). And since you don’t own the vehicle, you can’t sell it or trade it in if your financial situation changes.

Lastly, wear and tear fees still apply. Even though the car is used, you’re expected to return it in good condition. Excessive scratches, dents, or interior damage can result in charges at the end of the lease.

Certified Pre-Owned vs. Regular Used Cars: What’s the Difference?

When it comes to leasing a used car, the term “certified pre-owned” (CPO) is crucial. Not all used cars are created equal, and CPO vehicles offer significant advantages over non-certified models.

What Makes a Car “Certified Pre-Owned”?

A certified pre-owned vehicle has undergone a rigorous inspection by the manufacturer or an authorized dealer. This inspection typically covers hundreds of points, including the engine, transmission, brakes, suspension, electronics, and interior condition. Any issues are repaired or replaced before the car is certified.

In addition to the inspection, CPO cars come with an extended warranty. For example, Honda’s CPO program includes a 7-year/100,000-mile powertrain warranty and a 12-month/12,000-mile comprehensive warranty. Toyota offers a similar 7-year/100,000-mile warranty, while BMW provides a 2-year/unlimited-mile warranty on CPO models.

CPO vehicles also often include perks like roadside assistance, complimentary maintenance for a limited time, and sometimes even a return policy (e.g., 3 days or 300 miles to return the car if you’re not satisfied).

Why CPO Matters for Leasing

Leasing a CPO car reduces your risk of mechanical problems and unexpected repair costs. Since the vehicle has been inspected and backed by a warranty, you can drive with confidence. This is especially important because, unlike buying, you don’t have the option to walk away from a bad purchase—you’re committed for the lease term.

Moreover, leasing companies prefer CPO vehicles because they’re more predictable in terms of depreciation and resale value. This makes them more willing to offer favorable lease terms.

Can You Lease a Non-CPO Used Car?

Technically, yes—but it’s rare and often not recommended. Most leasing companies only offer leases on CPO vehicles or cars that meet strict criteria. A non-certified used car may have hidden issues, higher mileage, or a questionable history, making it a risky choice for a lease.

If you do find a lender willing to lease a non-CPO car, expect higher interest rates, shorter terms, and stricter conditions. It’s usually better to spend a little more on a CPO model for the added protection and peace of mind.

How to Find and Lease a Used Car

Ready to lease a used car? Here’s a step-by-step guide to help you navigate the process and get the best deal.

Step 1: Check Your Credit Score

Before you start shopping, check your credit score. Most lenders require a score of at least 680 for used car leases, though some may accept lower scores with higher rates. You can get a free credit report from AnnualCreditReport.com or use free tools like Credit Karma.

If your score is low, consider improving it before applying. Pay down debts, correct errors on your report, and avoid new credit applications in the months leading up to your lease.

Step 2: Set a Budget

Determine how much you can afford to spend each month. A good rule of thumb is to keep your car payment under 10–15% of your take-home pay. Don’t forget to factor in insurance, fuel, and maintenance—even though the car is under warranty, you’re still responsible for routine upkeep.

Use online lease calculators to estimate payments based on the car’s price, residual value, and money factor. This will help you compare offers and avoid overpaying.

Step 3: Research CPO Programs

Visit the websites of manufacturers you’re interested in—Honda, Toyota, Ford, BMW, etc.—and look for their CPO leasing options. These programs often list available vehicles, lease terms, and special offers.

You can also search on dealership websites or use online car marketplaces like Autotrader, Cars.com, or CarGurus. Filter your search to show only CPO vehicles that are eligible for lease.

Step 4: Test Drive and Inspect

Once you’ve narrowed down your choices, schedule test drives. Pay attention to how the car handles, the comfort of the seats, and the functionality of features like infotainment and climate control.

Ask to see the vehicle history report (like a Carfax or AutoCheck report) to check for accidents, title issues, or service records. Even though it’s CPO, it’s smart to do your own due diligence.

Step 5: Negotiate the Lease Terms

Leasing a used car is negotiable—just like buying. Don’t accept the first offer. Try to negotiate the capitalized cost (the price of the car), the money factor (interest rate), and the residual value.

You can also ask for a higher mileage allowance, waived fees, or a lower security deposit. Some dealers offer incentives like free maintenance or discounted gap insurance.

Get everything in writing and read the lease agreement carefully before signing. Make sure you understand all terms, including early termination fees, wear and tear guidelines, and end-of-lease options.

End-of-Lease Options: What Happens When the Lease Ends?

When your used car lease ends, you typically have three choices: return the car, buy it, or lease another vehicle.

Option 1: Return the Car

This is the most common choice. You bring the car back to the dealership, have it inspected for excess wear and mileage, and walk away—no further obligations (as long as you’re within the terms).

Be prepared for potential charges. If you’ve gone over your mileage limit or caused significant damage, you’ll be billed. However, minor wear and tear (like small scratches or faded upholstery) is usually expected and not charged.

Option 2: Buy the Car

You can purchase the vehicle at its residual value—the price set at the beginning of the lease. This can be a great deal if the car has held its value well or if you’ve grown attached to it.

To buy, you’ll need to pay the residual amount plus any taxes and fees. You can finance the purchase through the dealership or your bank. Some leases even allow you to apply your security deposit toward the purchase.

Option 3: Lease Another Vehicle

Many drivers choose to lease a new or used car right after their lease ends. This keeps payments low and allows you to drive the latest models with updated technology and safety features.

Some dealers offer lease-to-lease programs with special incentives, like waived disposition fees or loyalty discounts.

Is Leasing a Used Car Right for You?

Leasing a used car isn’t for everyone, but it can be a smart financial move for the right person. It’s ideal if you:

– Want lower monthly payments than a new car lease
– Prefer to drive a newer, reliable vehicle without owning it
– Don’t drive excessively high miles
– Value flexibility and the ability to change cars every few years
– Want warranty protection without the high cost of a new car

However, it may not be the best choice if you:

– Drive more than 15,000 miles per year
– Want to customize or modify your vehicle
– Plan to keep a car for many years
– Have poor credit or unstable income

Ultimately, leasing a used car is about balancing cost, convenience, and risk. If you do your research, choose a certified pre-owned model, and understand the terms, it can be a win-win.

Final Thoughts

So, can you lease a used car? Absolutely. And with the right approach, it can be one of the smartest moves you make as a car shopper. You get the benefits of leasing—lower payments, warranty coverage, and flexibility—without the steep depreciation of a new vehicle.

By focusing on certified pre-owned models, checking your credit, and negotiating the terms, you can drive a high-quality used car for a fraction of the cost. Just remember to read the fine print, stay within your mileage limits, and return the car in good condition.

Whether you’re looking to save money, drive a luxury vehicle, or simply enjoy the latest tech without the long-term commitment, leasing a used car is a viable and increasingly popular option. With the market evolving and more choices available than ever, now might be the perfect time to explore this smart alternative.

Frequently Asked Questions

Can you lease a used car with bad credit?

Yes, but it may be more difficult. Some lenders specialize in subprime auto leases, but expect higher interest rates, larger down payments, and stricter terms. Improving your credit before applying can help you qualify for better deals.

How old can a used car be to qualify for a lease?

Most leasing companies require used cars to be 2–4 years old with under 45,000 miles. Older or high-mileage vehicles are typically not eligible due to increased risk of mechanical issues.

Do you need a down payment to lease a used car?

Not always, but many leases require a down payment (also called a capitalized cost reduction) to lower monthly payments. Some dealers offer $0-down leases, but these often come with higher monthly costs or stricter credit requirements.

Can you transfer a used car lease to someone else?

In most cases, yes—this is called lease assumption. However, the new lessee must qualify with the leasing company, and fees may apply. Not all leases allow transfers, so check your agreement.

What happens if a used leased car breaks down?

If the car is certified pre-owned and under warranty, repairs are typically covered. Contact the dealership or manufacturer’s service center. If the issue is due to normal wear, you may be responsible, so follow the maintenance schedule.

Can you lease a used electric car?

Yes, many manufacturers now offer CPO electric vehicles (like the Nissan Leaf or Chevrolet Bolt) for lease. These can be especially cost-effective due to lower operating costs and available incentives.