Should I lease or buy a car?

car leasing guideThis is a question that frequently comes up for those who are thinking of buying a new car.

Since this web site is about used cars, let’s get one answer out of the way immediately;

Leasing only applies to brand new cars, not used cars. There are some exceptions in that there are independent dealers in some large cities who lease used luxury cars.

But, hold on, that’s not the final answer.

Used car leasing

There is one way to lease a used car that most people are not aware of.  It’s called by various names: lease takeover, lease assumption, lease trading, lease swapping, and taking over a lease.

Here’s how it works.

Someone who is in, say, a 3 year lease wants or needs to get out after a year. They would like for someone to take over the car and payments for the remaining 2 years, and might even offer cash to prospective “buyers.”

Is this possible and, if so, how do I find these deals?

There is an online service, Swapalease, that acts like a match-maker between people who want out of leases and people who would like a short-term used-car lease. Simply search for the car you want and the service arranges everything. For the buyer, there is only a small transfer fee to change the paperwork with the lease finance company.

 New car leasing

If you are considering a brand new car, leasing can be an attractive option because it has much lower monthly payment than you would pay in loan payments for the same car, or even for a newer used car.

But leasing is not for everyone.  It’s best for people who like to drive a new car every 2-4 years, drive only about 10,000 to 12,000 miles a year, take good care of their cars, won’t want to end the lease early, and don’t mind having no ownership equity in exchange for significantly lower cost.

Lease payments for a 3-year lease are typically only 50% of 3-year loan payments for the same car.

If you think that leasing is for you, we strongly suggest you visit our sister web site,, and learn how leasing works, who should (and shouldn’t) lease, how to find, negotiate, and evaluate  lease deals, how payments work, and the fees and taxes of leasing. There is also a handy car lease calculator that allows you to determine monthly payments and total lease costs.