If a leasing company allows it, you can lease a car for a year, but this option isn't available in most cases. Auto leases already are short, but they usually last either 24 or 36 months – two or three years. While some leases are for longer terms, it's rare to see an offer for as short as 12 months.
Average Car Lease Terms
The average car lease terms are typically around two to three years (24 or 36 months). However, some lease terms can be longer or shorter than this, a common example is a 39-month lease. According to Experian's State of the Automotive Finance Market Report for the third quarter of 2023, the average length of a lease is between 35.53 months and 37.02 months, depending on credit. Here are some things to keep in mind:
- Lease terms can be either short or long. A short-term lease lasts between 12 and 24 months.
- Leases are considered to be long-term when they stretch over 36 months. They can sometimes be stretched for 60 months (five years), but at this point, if you need a lease longer than 36 months, you should probably buy a vehicle rather than lease one.
What is the Best Length for a Car Lease?
If you’re thinking about leasing a vehicle, you need to determine if that time frame is right for you. You need to consider these three factors before you jump into a lease:
- Your monthly budget – Leases are generally cheaper than buying a car, but you need to make sure you can afford the monthly payment, insurance, and maintenance costs. Instead of paying for the cost of the vehicle, you pay for the depreciation, taxes, and the money factor during the time you use the car.
- How long you want the vehicle – Ending a lease early isn’t easy or cheap. Make sure you know how long you want to keep the car. While there are ways to end one early, it isn't always possible and it takes time. If you know you want a new vehicle every two years, opt for a 24-month lease term if it’s available.
- How much driving you plan to do – Leased vehicles come with mileage restrictions. If you have a rough estimate of how much driving you plan to do, make sure you choose a mileage limit that gives you a nice cushion so you don’t go over it. If you do, you’re going to pay per extra mile (usually 25 cents). On the flip side, if you purchased extra miles up front and end up driving less, you won’t get any money back.
One thing to keep in mind is being able to qualify for a lease. Leases are typically reserved for car buyers with good to excellent credit. If you have bad credit, it’s not always impossible to qualify for a lease, but it's typically more difficult.
Getting a Lease with Bad Credit
If you have bad credit, can you even lease a car? The answer isn’t so simple. Most of the time it’s no, but in rare cases, a lessor may extend a leasing offer to someone with bad credit.
If you’re considering leasing, you need to double-check your credit score and credit reports and come up with a budget that covers the monthly payment plus expenses. Once you know where your credit stands and have an estimate on a lease payment you can afford, you can shop around for the best lease deal.
What you may find when leasing with bad credit is that the lessor may ask for multiple security deposits and additional documents in order to approve you. These include proof of income, proof of residency, and a list of personal references. They want to make sure you’re willing and able to pay for the lease.
Need Help Finding a Dealership?
Leasing may sound great, but you usually can't do it for only a year. The best lease term is dependent on what you want out of the leased vehicle and your budget. There are multiple lease deals out there to choose from, but if your credit isn’t in the best shape, you could find yourself being turned down. On the other hand, there are many benefits to taking out a subprime auto loan, which includes being easier to get approved for compared to leasing when you have bad credit.
In fact, a bad credit car loan can help you raise your credit score by giving you the chance to make on-time payments on a long-term credit account. If your credit isn’t great right now, you may want to consider financing a vehicle and working toward improving it. This way, you can work toward leasing the car you want in the future.
