For some people, it may make perfect sense to lease a used car, however for others, it might not make as much sense financially. Ultimately, you will need to weigh the pros and cons for yourself to decide what makes the most sense for you and your situation.

When it comes to leasing a car, you dodge the upfront lump sum payment. This is often deferred to a residual value at the end of the term – usually 3 – 5 years. As a general rule, the larger the residual, the lower your repayments. Unless there is a supply shortage, used cars should always be cheaper than new ones. This is because the value of a car depreciates significantly after its initial purchase. It is important to note however, the price of a used car may not always be accurate to its true market value.

If you are looking for a near new car without the price tag, it pays to be patient and to do your research. You’ll pay extra to lease a used car with fewer miles and lower wear and tear, but it will look and feel new and won’t pay the money the new car loses in value when you drive it off the lot.

When it comes to leasing a used car it is also important to read and understand the legal obligations when signing a contract. There will always be terms, they may be inflexible and they don’t always have transparency when it comes to the fees. There may be exit fees and also penalties for late or missed payments, which can certainly happen in life.

If you’re thinking about a car lease, you should also consider a car subscription as an alternative to traditional leasing. There are many perks such as flexibility, no hidden fees and the ability to stop or swap your ride with just 2 weeks notice. It offers all the benefits of a car lease without the commitments.*

Read more about subscription vs leasing here.

* The advice given is general advice and does not take into account your own objectives, financial situation or needs. You should consider if the advice is appropriate for you before acting and read all applicable terms and conditions of any selected product or service prior to proceeding.