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A few used car leasing tips

By Charles Hopkins Published 05/18/2006 | Auto and Trucks

Theres a new and popular way of owning luxury vehicles, and that is leasing used cars. The biggest advantage of leasing is that you get good cars at a low rate. However, you must know how leasing works if you want to get a good deal.

The best is to go in for those cars that are about a year old, and enjoy good resale value. You also need to get quotes on the make and model of the car, not to forget the year of manufacture. When you compare these quotes with the lease deal for a new car, you will be able to estimate the saving that you are going to make.

Resale value is equally important. The best cars to lease are those that hold their resale value for at least three years. You also need to research the fair price of the car. A good place to obtain this is Edmunds. Its True Market Value price is quite dependable. You also need to look at consumer reports because very often these provide a good insight into car models.

Another must is to go through the cars history. Check who is the owner, and if the car has been involved in any major accident. Dont take things for granted. If need be, hire a third party like CarFax to do a check on the cars history.

Also, when looking for certified cars, go for those cars that offer manufacturer-sponsored certification. These cars have to go through a larger number of checks before they are certified as roadworthy. Some of them even come with new or extended warranties.

If you are going for a non-certified car then you must use a trusted mechanic to inspect the car thoroughly. Some of the areas that need a meticulous check are engine, transmission, body, and frame.

Mileage is another important indicator. Make sure that the odometer is not tampered, and the car has not been run excessively during the course of the year. Dont lease cars that have done more than 15,000 miles per year. These cars would need high maintenance, and are not worth owning.

You can get lease financing either from a used car dealer or from a lease company. In either case, look for rates that suit you most. You should also work out the lease period carefully. Ideally, the lease for one-year-old vehicle should be 24, 36, or 48 months. For two-year-old vehicle it can be 24 or 36 months while for three-year-old vehicle it should not be more than 24 months.

A vehicle that is more than three years old should be bought and not leased. This is because the advantage of leasing such a vehicle is eaten away by depreciation. Also factor the repair costs when working out a deal. Barring the certified cars with warranties or new cars whose warranty is yet to expire you must keep in mind the repair costs. A car that needs serious repairs should never be leased.

You must also negotiate gap protection to meet eventualities arising out of a leased car being stolen or destroyed in an accident. This must be done either with the leasing company or your insurance company.

Read the lease document carefully. If need be consult a lawyer to identify any hidden costs. It is better to be safe than sorry later.