Is a Short Term Car Lease a Good Idea?

Is a Short Term Car Lease a Good Idea?

When it’s time for a new car, you have a few options, including leasing. Leasing a car essentially means that you borrow it for a set amount of time, and when your lease expires, you return the vehicle to the dealership. Leases usually last about three years, but some dealerships offer much shorter contracts.

If you want to get behind the wheel of a brand-new car without making a long-term commitment, a short-term lease might be an appealing solution. However, short-term car leasing can be a gamble.

They’re usually not the most financially practical option, but they can work for some people. Before you commit to a short-term lease, make sure you know the advantages and disadvantages.

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Pros of a Short-Term Car Lease

Advantages of short-term car leases can include:

New Cars

Short-term auto leases can be a way to access the newest cars on the market without making a serious investment. If you love having a new car, you might appreciate the ability to lease the latest model for a year or two.

Car trends can change fast, so when the lease is up, you can swap it out for another popular model with the newest features.

Minimal Commitment

If you need a car fast but can’t find the perfect one for your lifestyle, a short-term car lease might be a fitting solution. It gets you behind the wheel quickly, and it’s low commitment.

In the meantime, you can continue researching and test driving cars to find one that’s worth your investment.


Maybe you’re on a year-long work assignment in another state. Maybe you plan on moving to a metropolitan city with plenty of public transit options next year, and you won’t need a car.

Whatever your situation, if you need access to a dependable vehicle and don’t want to pay for taxis and ride shares every day, a short-term lease might make sense.

Cons of a Short-Term Car Lease

There are also drawbacks to short-term leases, including:

Higher Payments

According to Experian, new cars depreciate 20 percent in the first year. With a short-term lease, you drive the car while it depreciates rapidly. And you pay for it.

Monthly payments on short-term leases are typically much higher than those on long-term leases because they account for the significant loss in value that occurs during the car’s first year or two.

Mileage Limits

Lease agreements typically dictate how many miles you can drive without incurring penalties. Most dealerships offer lessees between 10,000 and 15,000 miles per year unless you have a high mileage lease. If you plan on using the car on road trips or a long daily commute, you could risk exceeding your mileage limits.


Long-term leases are far more common than short-term leases. You might struggle to find a dealer in your area that offers leases shorter than two years. Having fewer options can leave you with a worse deal, as you have fewer quotes to compare.

Who Should Consider a Short-Term Lease?

A short-term lease can be a good idea if:

You only need a car for a short time. For example, you need a temporary vehicle due to work, school, or personal obligations, and you’d rather not commit to something long-term.You love new cars. If you’re happiest behind the wheel of a brand-new car, it may make sense to opt for a short lease.You want flexibility. If you think your tastes or needs might change in the next few years, you could choose a short-term lease and swap the car out when your contract ends.

Alternatives to Short-Term Leases

Short-term leases aren’t your only option if you need temporary access to a dependable vehicle. Other options include:

Taking Over Someone Else’s Lease

Instead of getting your own lease, you could inherit someone else’s lease that they don’t want anymore. People who want to end their contracts early often post their leases on websites to advertise them to people seeking short-term lease options. Lease takeovers may provide more flexibility than dealerships, as you might find lessees with 24, 18, or even 12 months left on their lease.

Carefully study the monthly payment, lease term, and condition of the vehicle, and understand any fees. Make sure you aren’t taking over a new batch of problems by taking ownership of the lease. You’ll be the one turning the car over to the dealership at the end of the contract, and if the original lessee racked up mileage or wear and tear, you could be responsible.

Lease transfers sometimes require an application and credit check. Swapalease, a popular lease takeover platform, notes that state tax is usually part of your car’s monthly payment, but it can vary between locations. Check with your local department of motor vehicles (DMV) to learn how taxes works for lease takeovers in your state.

Long-Term Car Rental

If you only need a car for a few months, you could rent one monthly from a rental service. Some car rental companies, like Avis, allow you to rent a car for up to eleven months. Long-term rentals have perks like:

Flexibility: You can renew your rental each month. If you’re not sure how long you might need the car, this is a convenient option.Low rates: Many rental companies offer low rates to people who agree to a long contract.Different models: Many rental car companies allow you to switch out your model for another one between months, so you can test out a lot of different vehicles.Convenience: Maintenance, paperwork, and insurance are usually the rental company’s responsibility, not yours.

Traditional Long-Term Lease

Another option is to get a standard lease. If you want to get out of it early, you can look for someone to take it over. This option requires some luck, as you’ll have to find someone who’s happy with your lease terms and needs a short-term car lease themselves.

How to Get a Short-Term Car Lease

Follow these steps to find a short-term lease that works for you:

Visit dealerships. Speak with a variety of dealerships in your area to learn which ones offer short-term leases and which have the most favorable terms.Check your credit. You usually need strong credit to qualify for a lease because the dealership wants to know you can make on-time monthly payments for the entire duration of the lease.Apply. Once you find a vehicle you like with a lease duration that works for you, you will need to submit an application.Put down a security deposit. Most lease agreements require you to pay a security deposit that the dealership returns to you if the car comes back without damage at the end of your lease.Pay fees. You often have to pay a few fees at the start of a car lease, like an acquisition fee and a registration fee to register it in your state.

Finance & Insurance Editor

Elizabeth Rivelli is a freelance writer with more than three years of experience covering personal finance and insurance. She has extensive knowledge of various insurance lines, including car insurance and property insurance. Her byline has appeared in dozens of online finance publications, like The Balance, Investopedia,, Forbes, and Bankrate.