The Basics of Leasing a Used Car

Used cars are a great way of getting a vehicle, while saving lots of money; leasing a used car is an option worth considering if you really lack the money needed.

The leasing scheme allows you to get your car by paying the minimum amount of money possible at once. Another great application is purchasing high-end cars. Through such a scheme, you are able to get the car of your dreams, even if you would not otherwise have the necessary resources.

The issue here is that not all deals are favorable. The numbers are all that matter, so, prior to making any decision, you should calculate, compare offers and see if they are worth the costs. Here are some important aspects on how leasing a used car works:

Estimated Value

The first important issue when dealing with used cars is their value. For a new car, it is easy: the dealer knows how much he paid for it, he also has the MSRP stickers to help him, so stating a price is a simple thing to do.

For used cars, the dealer must basically guess the actual value (the so-called estimated residual value), based on the depreciation degree. Doing it is quite difficult, since different used cars, even if they are of the same model, have different ages, mileages and possible defects.

leasingWhy does that matter to you? It does, because, when you decide on leasing a used car, you will soon find out that various dealers can have very different estimated values for similar vehicles.

The natural consequence is that you need to do some serious research prior to buying. Never hurry up! Take your time, see various offers, compare and determine which of them is more suitable for your budget. You can easily do this, either offline or online.

Up to this point, the story probably seems a simple one. Unfortunately, there is the tricky part: leasing deals depend on the depreciation degree. When the residual value has the least depreciation, you are more likely to get an attractive deal. This means that the newer the car is, the higher the chance of a true bargain.

Gap Coverage

This is another important issue when leasing a used car, since it involves lots of money. You are probably aware of the importance of having gap coverage – the insurance against damage, theft or loss. New cars usually come with such insurance, but this is rarely the case for used cars.

In such a situation, you will probably get a limited insurance policy, covering the car’s value at the time it gets lost, but not the amounts of money owed on the lease.

The big issue here is that the difference can be really huge: sometimes even a few thousands of dollars.

Since you do not want that, when leasing a used car, you should always try to get gap coverage. Discuss with the dealer. He may handle all the arrangements directly or put you in contact with a partner insurance company.

Warranty

Depending on the car’s age, some or all of its components might be out of warranty. Since you definitely want to be covered, in case anything goes wrong, you may want to extend this warranty. Obviously, an additional amount of money is required for that.

Request a list of all the existing warranties, to see which parts are still covered and which are not. Apart from the initial components, there could be also some custom parts, installed by the previous owner. The problem here is that they tend to increase the price (and monthly installments, accordingly), even if they are not really useful.

Finally, when leasing a used car, check out the upcoming maintenance costs and the coverage for them.