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Leasing a used car is not only possible, it may be better than leasing a new one.

Used car leasing was not widely available until recently, when automobile manufacturers started offering leases on their certified pre-owned cars. A big advantage of leasing a used car — as with leasing a new one — is that the payments are lower.

In general, buying a new vehicle will bring your highest possible monthly car payment. The next step down, cost-wise, is if you were to lease that same new car. Then comes buying a car when it’s a couple of years old, followed by what’s usually the cheapest option: leasing that model that has a few years on it.

Bankrate lease vs buy calculator can help you determine whether buying or leasing is the right choice for you.

The downside of leasing a used car

Cars that have been used as loaners or demo cars at the dealership, or that were leased brand-new and have recently been returned and are certified pre-owned, are the used vehicles typically available for leasing.

The biggest disadvantage of leasing a used car is that it could be out of warranty, resulting in additional repair costs for you.

BMW, General Motors, Honda, Porsche and Toyota all offer leases on their certified pre-owned models. The lease programs are structured so that customers will have some warranty coverage in most cases, should the need for a repair arise.

Another good reason to lease used

As with buying a new car, leasing a new vehicle can leave you upside-down. That means you find yourself paying more to lease the car than it’s worth because of depreciation, especially during the first few years. Being upside-down can be a major problem if you end up in an accident that leaves the car a total or near-total loss.

When you lease a used car, you avoid that depreciation hit. It’s similar to how buying a used car saves you from taking the loss from depreciation, which is all on the original owner.

Think buying may be for you? Compare auto loans today here at Bankrate.

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