Jimmy Sturo

Leasing a used car is trickier than leasing a new car. Used cars do not have MSRP (manufacture’s suggested retail price) stickers on them, which makes it more difficult to estimate their cost. The capitalization cost is a guess based on the current market value of the car. Different dealers will give different quotes, and you have to shop around to get the best deal.

When leasing a used car, its warranty might be over and that means you will have to extend the warranty by paying an additional fee. There may be parts that are still covered, and you need to demand a list of all the warranties on the car and its parts. There may be some parts installed by the previous owner that were not in the original car. Any such customization would increase its lease price and would increase the monthly installments.

Maintenance costs on used cars are high. Though there may be coverage for all the major parts, there is still monthly checkups that need to be done and this is a huge bill for the entire lease period. And if you neglect this maintenance, there goes your claim deposit.

There is an upside to leasing used cars. Cars depreciate quickly in the first two years. After that, cars depreciate by a small percentage each year. That means, if you lease a used car, much of the depreciation is already over. Monthly payments are significantly lower on used car leases than on new car leases because of this.

Leasing a used car does not necessarily imply that the leaser’s financial situation poor. It may just be the lure of lower monthly payments. Leasing a used car is not bad when you consider you’ll be making significantly lower payments that won’t eat into your other household expenses. But one should be wary and take a trusted expert with you who can examine the car’s condition and protect you from getting trapped by the dealer’s confusing jargon.