What is an off-lease car? Are they good deals?

About previously leased vehicles

When leased cars are returned to a lease company, the return is typically made to a new-car dealer, who handles the return for the lease company. The lease company is often the financial division of a major car manufacturer. Ford Motor Credit and Toyota Finance are examples.

Generally, the lease company arranges for the vehicle to be transported from the dealer’s store to a central location for resale, or to a car auction location. However, many times, the dealer to which the vehicle is returned likes the vehicle enough to buy it from the lease company to sell on his own used-car lot. These previously leased vehicles are known as “off-lease” vehicles.

Dealers often proudly advertise such vehicles because they know most have been treated well, are almost new, and have relatively low mileage.  A typical car might only be 3 years old, have less than 30,000 miles, be in excellent condition, and in some cases still have remaining manufacturer’s warranty. Dealers love them.  Many will be fully inspected, given an extended warranty, and placed into a dealer’s “certified car” program, which guarantees a higher selling price and more profit.

Customers like off-lease vehicles because of the peace of mind they offer — an almost new vehicle with low mileage and no problems.

Some independent used car dealers — dealers not associated with a major car manufacturer — advertise themselves as specializing in off-lease vehicles, implying a higher quality of vehicles — at higher prices. However, since there’s no convenient way of confirming if a vehicle has been previously leased, it would be wise to take the claims with a proverbial grain of salt. A dealer might be able to prove a vehicle was previously leased by showing a Carfax vehicle history report to customers.

Are off-lease vehicles good deals?

Automotive consumers sometimes confuse leasing with renting and believe that leased vehicles are abused and that “off lease” cars are to be avoided. This is not true of most previously leased vehicles.

There may certainly be cases of leased vehicle abuse but, in general, leased vehicles are better cared for than purchased vehicles, particularly for vehicles in the luxury category. The risk to potential buyers is relatively small and any rumors that suggest otherwise are much exaggerated. Many used car buyers regularly seek out previously leased vehicles because they know the risk of making a mistake are very small.

Will you need a loan?

If you need a loan for your off-lease car purchase, you can go with the dealer’s financing, get a bank loan, or use a reputable online auto loan provider, such as Auto Credit Express or InstantCarLoan.com, that provides quick approval and shows you their offer. Compare the rates from all your sources and go with the best one.

Since most off-lease cars are almost new, they are often sold with new-car loan rates which are lower than conventional used-car rates, which are determined by a customer’s credit score. Therefore, it’s important to know your current credit score before you visit a dealer to purchase your off-lease vehicle.  Get a Dark Web Scan and your Experian Credit Report for FREE!

Summary

In summary, off-lease cars are generally well worth your consideration if you are looking for a late model, clean, low mileage, and well maintained vehicle. Although prices are a  bit higher than other used cars, many buyers consider the extra peace of mind to be well worth the cost.