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With new car production playing catch up, the used car market has boomed over the last year. In fact, more than 7.5 million used cars were sold in the UK in 2021, compared to around two million new cars. Still, many buyers aren’t always sure if they can lease a used. Simply, you absolutely can.&nbsp;

Caruno is here to assist you with all your car leasing needs. We help you understand the used car leasing process, the possible risks, and benefits, along with other considerations.&nbsp;

So, can you lease a used car and how does it work? Let’s take a closer look.

Leasing, also known as <a href="https://www.caruno.co.uk/car-finance/personal-contract-hire/">personal contract hire</a> (PCH) is very similar to renting a car. <a href="https://www.caruno.co.uk/car-leasing">Used car leasing</a> has now become a popular and convenient way to get behind the wheel of the car you want to drive, especially if you don’t have the funds to pay for a car outright.&nbsp;

Used car leasing also comes with other benefits, such as dedicated maintenance plans, road tax inclusions, and more. This can vary from one car to another.

&nbsp;How does used car leasing work?&nbsp;

The used car leasing process is like leasing a new one. You select the car you want, set your annual mileage limit and choose the length of the contract term you prefer – usually 24 to 48 months.&nbsp;

You’ll have the option to put down an initial payment if you like. The more you pay upfront, the less you’ll pay per month.&nbsp;

Your monthly payment will be calculated based on a combination of these factors; your annual mileage limit, your lease term, and how much – if any – initial payment you’re putting down.&nbsp;

The lower your annual mileage limit, the longer your lease term, and the higher your initial payment – the cheaper your monthly payments will be.&nbsp;&nbsp;

Once that information is set, and you’re approved for the lease, you can drive the car for the agreed period.&nbsp;&nbsp;

This type of car finance won’t result in you owning the car at any stage. The car must be returned to the leasing company when the lease expires.&nbsp;

If you’ve followed your lease terms, there’ll be no further expenses. If the car has any damage outside of the BVRLA wear and tear guidelines, or you’ve gone over your mileage limit, there will be excess charges to pay.

There are many benefits to leasing a car, some of which are exclusive to used car leasing.

Monthly payments are worked out based on the depreciation of the car over the leasing period. As used cars are generally worth less than new ones, it’s likely that the used car you choose will lose less value over the course of the lease&nbsp;

Leasing a used car means higher-end brands are now within your reach, along with all the fancy tech that comes with them. These brands may not be as affordable if leased new, or bought outright.&nbsp;

This also applies to new car leasing, the difference being, it is far more difficult to organise a resale for a second or third-hand car.&nbsp;

Choosing to lease a used car – providing you’ve met all of the terms of your lease - means you can simply return the car at the end of your contract without any further obligations. 

What to consider before choosing a used car lease

Before choosing a used car lease, it’s a good idea to consider the following:

When buying a car, new or used, you will make payments towards full ownership at the end. Once the car has been paid off, it’s all yours.

Leasing a used car may mean lower monthly payments, but you’ll never own it.&nbsp;&nbsp;

On the other hand, you’ll never have to worry about the depreciating value of the car and the hassle of selling it on.

If you opt for a maintenance plan, like <a href="https://www.caruno.co.uk/about-us/caruno-care">Caruno Care</a>, you won’t need to worry about most repairs or regular servicing costs either.&nbsp;

Another option is to drive a used car through <a href="https://www.caruno.co.uk/car-finance/personal-contract-purchase/">personal contract purchase</a> (PCP) instead of leasing. In this way you’d still enjoy lower monthly payments, but you’ll have the option to either return the car at the end of your agreement, or to pay a final lump sum, known as a balloon payment, to take full ownership. In some cases, a PCP deal may even turn out to be a cheaper option than PCH.&nbsp;

However, if you decide to buy a used car, choosing to finance with <a href="https://www.caruno.co.uk/car-finance/hire-purchase/">hire purchase</a>, you’ll have no mileage restrictions, and you’ll own the car at the end of your agreement.

Having said that, a hire purchase often comes with higher monthly payments than a lease deal. Depreciation would then become a factor should you want to sell the car.

With new car production affected by supply chain delays and the worldwide semiconductor chip shortage, used cars are in demand and more widely available. So, if you don’t want to wait and need a car quite quickly, used car leasing is the better option.&nbsp;

As used cars carry a lower value, leasing one should mean lower monthly payments. However, depending on which car you choose and your circumstances, a new car lease may not be that much more, if you’re willing to wait for the car you want.

One of the downsides to leasing a used car is that they’re older and therefore more likely to pick up issues needing repair. At Caruno we carefully test and carry out a <a href="https://www.caruno.co.uk/about-us/caruno-car-quality/">275-point inspection</a> of all our used cars before we add them to the website - reducing the chance of any problems arising.&nbsp;

Once again, opting for a maintenance plan will ensure you don’t have to deal with, or pay for, any potential repairs. Saving you both time and money.

Leasing a new car means receiving an untouched car in flawless condition, with all of the mod-cons that come with the latest models. Additionally, if you choose a new car lease for 24-36 months, an <a href="https://www.gov.uk/getting-an-mot/the-mot-test">MOT</a> won’t be required whilst you’re driving it. 

Used car leasing with bad credit – can I still apply?&nbsp;

Leasing a used car means going through the usual eligibility checks carried out by lenders. This means an in-depth look at your credit report.

Lenders consider many factors when looking at your application. If you don’t have a good credit rating, this could be viewed as a potential financial risk.&nbsp;

For the best chance of approval, it’s important to build your credit history by making timely payments which help to improve your credit rating.&nbsp;

However, if you’ve previously hit a speed bump in the road, but are now in a good position to lease a used car, caruno can help.&nbsp;&nbsp;

We work with a diverse panel of lenders who consider applicants from different credit backgrounds. We’ll find you the best rate on the market and match you with a lender that’s right for your circumstances. You’ll even get personalised pricing tailored to meet your requirements.

READ: <a href="https://www.caruno.co.uk/advice-and-guides/car-finance-with-bad-credit">Can you get car finance with bad credit?&nbsp;</a>

Caruno is committed to helping everyone find the most affordable and convenient car leasing option for their financial circumstances. We conduct soft credit searches and provide instant decisions, without affecting credit scores.

Try our fast and easy <a href="https://www.caruno.co.uk/car-finance/eligibility-checker/">eligibility checker</a> to find out your likelihood of approval for car finance.&nbsp;

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Can you lease a used car and how does it work?