Searching only off-lease cars to find a good deal can be daunting. Each year, millions of people trade in their off-lease cars with the hope of upgrading to a new, stylish, and affordable vehicle. Finding great deals on those off-lease cars can be a daunting task, but knowing what to look for will help you find the perfect off-lease vehicle that fits your needs and wallet. Here are a few questions you may have when searching for only off-lease cars:
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How common are off-lease cars?
Off-lease cars are everywhere! The used-car market is booming. A recent Wall Street Journal story found that the demand for used cars is on a major uptick as a result of the increased cost of new cars. The price gap between new cars and used cars is at its widest in history. That means that all of those vehicles are coming back lightly used, and dealers are looking to get them sold. And, with new cars lasting longer and longer, there’s a glut of available off-lease cars. With the gap between new car prices and used car prices widening — and demand for off-lease cars remaining high, you may think that it would be impossible to find a great deal on an off-lease vehicle. Not so. Because there are so many cars coming off lease, dealers are willing to haggle to move the inventory, which means you can save a chunk of change. In fact, according to that story by the Journal, the average transaction price of a new car is around $35,000. By buying a three-year-old model that’s just come off-lease, you can save around $15,000. So how do you find the right off-lease car for you? Follow the steps below and find out.
What does “off-lease” mean? What is an “off-lease vehicle?”
An off-lease car is a vehicle that’s been returned to a dealer at the end of its lease. Generally off-lease cars have been gently used. Off-lease cars tend to have:
- Lower mileage
- Less wear and tear
- Have been maintained by dealerships on a regular basis, thanks to the terms of the lease
- Coverage under the manufacturer’s warranty
Off-lease cars aren’t necessarily certified by the manufacturer but are generally inspected by certified mechanics at the dealer when the car is returned.
What does Certified Pre-Owned (CPO) mean?
If you’re looking for an additional level of assurance, it may make sense to step up to a certified pre-owned (CPO) off-lease car. In most cases, CPO vehicles go through a number of inspections and repairs done by the car manufacturer in order to label an off-lease vehicle as “certified.” For example, if you turn your off-lease Chevrolet into the Chevy dealer, they’ll put it through their inspection process to CPO it. If you take your Chevrolet to an Audi dealer, however, the Audi dealer will give it a mechanical once-over, but not certify it. These inspections and repairs reset and restore the functions of the vehicle back to the factory settings, which means that you get a like-new car. Lexus was the first company to offer CPO vehicles back in the early ’90s; since then, CPO-certified off-lease vehicles are available from manufacturers that include:
The benefit of purchasing a CPO certified vehicle is that they often come with a few perks, such as loaner cars for when your vehicle is in the shop, as well as extended warranties. However, CPO vehicles generally come at a higher price due to the work that car makers invest to certify them.
Why are off-lease cars cheap?
Off-lease cars are generally more affordable than CPO cars because they don’t go through such exhaustive inspections; they generally represent inventory that a dealer wants to move quickly. For example, let’s say a buyer wants to trade in their leased vehicle for a different brand of car. Say that someone has a leased a Cadillac Escalade that they want to trade in for a Mercedes-Benz GLS. They decide to head to their local Mercedes dealership and trade in the Escalade. That Escalade will sit on the dealer lot as an off-lease vehicle. While the Mercedes dealer won’t “certify” the Escalade because it’s a Cadillac, it will offer other inspections to ensure that the SUV is in good working order before selling it. Because a vehicle is off lease doesn’t mean that it won’t necessarily be covered should something fail mechanically. Most off-lease cars are still covered by the manufacturer’s warranty, and dealers offer different kinds of extended warranties and certifications for vehicles that are of a different brand. You can purchase an extended warranty for an off-lease vehicle at the dealer from which you purchase a car; just be sure you read the fine print regarding service, because some warranties limit you to specific dealers for repairs. There are plenty of jargon-laden terms thrown around when you go to purchase a car, so understanding what an “off-lease vehicle” is — and what it can mean for you — is the first step in finding the perfect car for you.
How do you find only off-lease cars?
You can find off-lease cars by either visiting dealers in your area who also carry used cars or by doing an online search for off-lease or CPO used cars in your area. Most off-lease cars look just like any other used or CPO car. If you’ve decided to hit the pavement and visit local dealers, be sure to find the area of the dealership that has the used cars. It’s usually clearly marked and separate from the new-car area. This is usually the more time-consuming (and often frustrating) form of off-lease car shopping. It can be hard to tell what options a vehicle has from the outside, so it’s better to narrow your search online first before heading to a dealership. The best and most efficient way to find off-lease vehicles in your area is to start online. Be prepared to do a lot of online searching before setting foot at a dealership.
What do you need to know about off -lease cars?
When going to purchase an off-lease car, there are a few things you need to know, including:
- The vehicle’s history
- Maintenance records
- Mechanical condition reports
- Warranty options as well as pricing and options.
Once you’ve found the car you want, verify with the dealership that it has the options that you want. There’s often a small amount of wiggle room in the price of an off-lease car; before you arrive, be sure to ask about the dealership’s haggling policy. Some dealerships give you the price on the sticker, while others include a small markup that can be negotiated out. Once you confirm these details, it’s time to head out on a test drive. On the test drive, be sure to visually inspect the vehicle. This includes:
- The inside and outside of the vehicle
- The engine compartment
- The trunk
Be sure to look for dings, scratches or dents. Use your nose to see if there are any lingering smells inside the vehicle. Since the U.S. has suffered a number of floods and hurricanes in the past few years, be sure to look for any signs of water damage or signs that the car has been flooded. Take the car for a test drive and see if you notice any strange mechanical behavior; ensure it meets your expectations. Next, ask the dealer for the vehicle’s history and any maintenance records. This can come in the form of a CarFax or another vehicle history report. Check it for any red flags. This can include:
- Severe accidents
- Damage reported to the police department
- Damage reported to the insurance company
Once you’ve reviewed the reports, determined your budget and your price; it’s time to negotiate. Get a clear idea of the warranty on the vehicle and, if you want to purchase an extended warranty, be sure to read the contract before signing on the dotted line. While finding only off-lease cars can seem daunting, following the steps above will help you find the right car for you. By the end of the day, you could drive off with a new-to-you, off-lease car!