New Road Rules: Leasing a Used Car

Used cars aren't what they used to be. "Previously owned cars" have gained a respectable reputation and a following among car shoppers on a budget. Now how about considering a previously leased set of wheels?

June 1, 1999

Carrie Cartland isn't in real estate, but she faced the same dilemma some real estate practitioners face when they go car shopping: big expectations but a small bank account. Cartland wanted the looks, comfort, and reliability of a new car, but she couldn't afford one.

"No matter how I tried to work it out, I just didn't have the money to buy the kind of car I wanted," says the 37-year-old Los Angeles merchandise manager. Then the salesperson suggested leasing a three-year-old Ford Taurus GL for half the price of leasing a new one. Cartland's "new" used car went through an extensive certification program and was backed up with a like-new warranty and roadside service.

"I don't know why I'd ever buy a new car again," Cartland says with delight. And she's not unique.

A growing list of automakers now offer "certified" used cars backed by extended factory warranties and niceties such as roadside assistance and trip interruption protection. Better yet, many of the vehicles are offered with "like new" leases.

Obviously, a used car—whether bought of leased—isn't for everyone. If prospects ride in your car, you need a car that's both attractive and well maintained. Typically, you won't want something older than 36 months. Nor should you sign up for a lease longer than 36 months. After that, the experts warn, breakdowns and repairs may mount.

Are you getting a good deal? When you lease a new car, experts suggest picking something popular, because if the trade-in, or residual, value is high, the monthly rate will be lower. On a popular vehicle, like the Ford Expedition, resale values are so high you may pay nearly as much to lease the vehicle used as you would to lease it new.

With a used-car lease, it's often better to opt for something less popular. "That means the vehicle has already taken a big hit on its value," explains leasing specialist and author Michael Kranitz. So you're starting from a low base, which holds down the monthly payment.

As with a new car lease, read the contract carefully. Make sure you know what you're getting into, especially when it comes to mileage limits, excess wear-and-tear charges, and fees that come due at the end of the lease.

Paul A. Eisenstein is publisher of The Detroit Bureau. He has more than 30 years of experience covering the auto industry for a broad range of print, broadcast, and electronic media.

Notice: The information on this page may not be current. The archive is a collection of content previously published on one or more NAR web properties. Archive pages are not updated and may no longer be accurate. Users must independently verify the accuracy and currency of the information found here. The National Association of REALTORS® disclaims all liability for any loss or injury resulting from the use of the information or data found on this page.

Related