The average new car lease term across all credit tiers was 36.19 months in the second quarter of 2018, according to Experian’s State of the Automotive Finance Market report. Depending on the type of vehicle you lease and the deals that are being offered, the average lease term typically ranges from 24 to 48 months.
What is the Best Length for a Car Lease?
Whether or not a car lease term should be short or long is subjective – it depends on a few factors, including:
- Your monthly budget – Leases are known for having lower monthly payments. 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 much you plan to drive – Leases come with a mileage limit, and you need to pay (typically 25 cents per mile) if you go over it. On the flip side, if you purchased extra miles up front and end up driving less, you won’t get any money back.
- How long you want the vehicle – Ending a lease early isn’t easy or cheap. Make sure you know just how long you want to keep the car. If you know you want a new vehicle every two years, opt for a 24-month lease term if it’s available.
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.
The Bottom Line
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.
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. In time, you can improve your credit enough to potentially qualify for a lease in the future.
While we can’t help you get a lease, Auto Credit Express can connect you with a local special finance dealership that has the lenders available to work with unique credit situations. Take the first step by filling out our free auto loan request form today!
