Short-Term Car Leases: What To Know
Don’t want to spend a fortune on a car lease when you just need a vehicle for a few months?
A short-term lease may be the best option for drivers who don’t want a typical three-year lease contract. You can get one from a dealer or even take over someone else’s lease.
While the lease payments tend to be higher, the smaller time commitment can be ideal if you’re unsure about your plans.
- Short-term leases last less than two years.
- You can also take over someone else’s lease for whatever time remains.
- A short-term car lease might be more budget-friendly if you need a car for just a limited time.
- But a shorter lease can have higher monthly payments, and like other leases, there are often mileage limits.
What is a short-term car lease?
A short-term car lease works just like a traditional auto lease: You sign an agreement with a lender to pay a certain amount each month to drive the car for the duration of the lease.
Short-term car leases let you drive the car without locking you into a long-term contract, which can help you bridge the gap if your plans aren’t settled. They can work well for summer interns in a new city, workers on temporary assignments, or even people who want to try out a certain car before committing.
While standard car leases usually range between two and four years, short-term car leases run up to two years.
Like longer leases, a short-term car lease involves monthly payments for the duration of your contract. Once the lease ends, you must return the vehicle to your dealer, unless you choose to buy the leased vehicle.
Pros and cons of short-term car leases
While short-term leasing has some advantages, you’ll still face the same contractual obligations as a traditional auto lease.
Pros
- Good temporary option: If you need a vehicle for just a few months, a short-term lease may be more cost-effective than renting a car.
- Ability to drive new models: A short-term lease lets you try out new cars. You can see how much you like a certain new model before buying it.
- Short-term commitment: A short-term lease can also be ideal if you’re simply not sure how long you want the car and prefer to keep your options open.
Cons
- Payments higher than traditional leasing: Shorter lease terms usually have higher monthly payments, even though you’ll be paying them for a shorter time.
- Comes with fees: If you take over someone else’s lease, you’re responsible for the taxes and any fees. Also, if you take a loan to take over a lease, you’ll have to pay interest.
- Will have mileage limits: All lease agreements, whether short-term or long-term, generally limit the number of miles you can drive. If you go over the mileage cap, then you’ll be penalized with extra costs.
How to get a short-term car lease
There are a few ways to get a short-term car lease. You may be able to enter one through your dealer, take over another driver’s lease or find a long-term rental service.
Get a short-term lease at a dealership
Dealerships usually offer traditional lease financing with three-year terms. But if you’re willing to research dealerships and maybe do some negotiating, you could find a dealer willing to offer a shorter term. You can even find leases for used cars.
Keep in mind that leases with shorter terms often come with higher monthly payments.
Look for car dealerships that offer lease options of 24 months or less or have lease-takeover opportunities.
Take over someone else’s lease
You may be able to take over another driver’s lease and have the car for the remainder of the contract, so long as the dealer agrees to it.
Try connecting with people looking to exit their lease early by searching on sites such as LeaseTrader or Swapalease.
On the upside, you may be able to avoid making a down payment. In fact, if the lessee wants to get out of the lease, they might offer you a cash bonus or agree to cover transfer fees charged by the leasing company.
Plus, you might land a lower monthly payment if the original lessee made a big down payment or got better rates due to a solid credit score. Then again, you might face higher payments if the original lease was expensive.
And of course, you must stick to the terms and mileage restrictions of the original contract.
Consider a long-term rental
Some car rental companies and manufacturers offer long-term car rentals and subscription services:
- The Hertz Multi-Month program allows you to rent a car for a minimum of 63 days, with no mileage limits, upfront fees or disposition costs (which cover cleaning and inspection).
- Enterprise will let you rent for a few weeks or longer, with unlimited mileage except for some large or specialty vehicles. It also offers a Subscribe with Enterprise service, where you get access to a variety of vehicles, for one monthly fee, including maintenance and insurance costs. You can cancel your subscription after two months.
- SIXT+ offers an all-in car subscription service with a short minimum term of 30 days and the option to extend another 30 days.
While you may end up paying more to rent a car through these services, you will avoid locking yourself into a long-term contract that sticks you with the car for longer than you need it.
How to get out of a lease
It’s possible to end your car lease early, but it’ll cost you money. You can return the car, trade it in, transfer the lease, or buy the car and sell it. Learning about your options now can help you avoid expensive surprises if you need to get out of your lease later.
End the lease early and return your car
This could solve your problem — it ends your lease, and you’ll return the car — but it comes at a high cost. Most leasing companies charge early termination fees that can run to hundreds or even thousands of dollars.
LendingTree expert tip: Ending a lease early is expensive. If you’re not completely sure you’ll keep the car for the full term, consider getting a shorter lease or a traditional car loan instead to avoid paying hundreds or even thousands in fees.
Trade in your car
Some dealers and leasing companies let you trade in your car lease and put the money toward a new lease or car loan. That said, there aren’t consistent rules here — making this particularly difficult to plan for — and you’ll need to cover the difference if you owe more on the lease than the car is worth.
LendingTree expert tip: If you think you might be interested in trading up before your lease is over, ask your leasing company about its trade-in policy before you sign. If they don’t offer trade-ins, look around for a company that does.
Transfer the lease
Some leasing companies let you transfer your lease to another person (someone you know or even someone you’ve found through a lease matchmaking site). The upsides are obvious — your lease is potentially over and covered — but you’ll need to deal with extra paperwork and potential lease transfer fees.
LendingTree expert tip: Confirm your leasing company’s transfer policy and fees before you sign your paperwork. Some don’t allow transfers at all, others restrict them and still others charge fees on each transfer.
Do a lease buyout and sell the car
You could also buy the car you’re leasing and then sell it. This could be a good deal if the market value of your car is higher than the price you’ll pay for your car (the “lease buyout price” stated in your lease agreement), or if it helps you avoid thousands of dollars in fees.
LendingTree expert tip: If you’re considering buying out your car at the end of your lease, take a close look at the lease buyout price in your agreement and compare it to car depreciation trends for the model you’re considering.
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