How Common Is Used Car Leasing?

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Contributing Writer

Bethany Hickey is a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. She is a content writer for Auto Credit Express, CarsDirect, and many other automotive blogs, as well as the Poetry Editor for UM-Flint’s writing magazine.


, Contributing Writer - December 22, 2020

If you don’t quite qualify for a new car lease, but you’d still rather lease than buy, used vehicle leases do exist – but they’re few and far between.

Recent Stats on Leasing

New car leasing is usually for borrowers with good credit scores. Despite a higher credit score requirement, leases are popular with borrowers looking for a smaller monthly payment – even though leasing comes with restrictions.

Of all the new vehicles on the road, 26.20% of them are leased, as reported by Experian’s State of the Automotive Finance Market report covering the third quarter of 2020. While a little over a quarter of new cars on the road are leased, only 9.59% of all leased vehicles are used.

Where Do I Find a Dealer That Leases Used Cars?

Yes, you can lease used cars and they do make up for a small chunk of leased vehicles. However, they’re not offered by every dealership.

Dealers that do offer them are typically the ones that have certified pre-owned (CPO) cars. These vehicles are commonly just coming off-lease, with less than 50,000 miles, and are typically under five years old. Automakers vary in their standards for what qualifies as a CPO, but the requirements are usually in that ballpark.

Finding a dealership that offers this may require some legwork. A good place to start is calling dealers that offer CPO cars. It’s not very likely to see any advertisements for this type of deal, so you probably need to take the initiative.

CPO vehicles are predominantly the ones available for used leases. Similarly to buying a used car over a new one, you may be able to wrangle a lower monthly payment. However, you may be confronted with a higher money factor (lease interest rate).

Used vehicles come with more risk for the lender and lessor, no matter if you finance a loan or a lease, since there’s a higher chance of mechanical breakdown from wear and tear. Due to the higher risk, it means paying a little extra in interest charges or money factor fees for used cars.

However, with used vehicles almost always being less expensive than their new counterparts, it’s likely you can save a lot of money opting for the used choice.

Bad Credit Borrowers and Leasing

Only 4.84% of new car leases are extended to borrowers with credit scores between 501 and 600, according to Experian. Those with credit scores below 500 only make up 0.22% of new vehicle leases.

While leasing a used car may be slightly more doable than leasing a brand-new one, you may still need a decent credit score to qualify. Leasing companies tend to have higher credit score requirements since new and like-new vehicles come with a high sticker price.

Buying a car with an auto loan may be easier for borrowers with less than perfect credit. There are special finance dealerships signed up with subprime lenders that can assist bad credit borrowers. Instead of just using your credit score as the main factor of your eligibility, they look at your income, living stability, work history, credit reports as a whole, your down payment size, and more.

Bad Credit Car Loans

Finding a special finance dealer can be simple when you start with us at CarsDirect. We’ve generated a nationwide network of dealerships that are signed up with these bad credit lenders.

Instead of calling or driving all over town looking for a dealer that has subprime lending options, start right now by filling out our car loan request form. We’ll do the looking for you, with no cost or obligation.

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, Contributing Writer

Bethany Hickey is a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. She is a content writer for Auto Credit Express, CarsDirect, and many other automotive blogs, as well as the Poetry Editor for UM-Flint’s writing magazine.


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