Automotive Leasing 101: How to Lease a Car in 2026

Jul 22, 2026 | AmeriTrustPublisher

Leasing a car means paying for the vehicle’s use over a contracted term, typically 24 to 36 months, then returning it rather than owning it outright. For millions of U.S. consumers, it’s a practical path to driving a newer vehicle with predictable costs and no long-term ownership commitment. Understanding how leasing works, what it truly costs, and where the pitfalls hide will help you decide whether it’s the right move in 2026.

Key Takeaways

According to Experian, the industry-wide average monthly auto lease payment in the U.S. was $659 in 2025, compared to $682 for financing a new vehicle purchase. This figure reflects broad market averages and is not an offer or representative term from AmeriTrust Financial.
Most consumer auto leases run 24 to 36 months, according to Kelley Blue Book, and you pay for the vehicle’s depreciation during that period, not its full purchase price.
You can lease a used car, not just a new one. Used vehicle leases follow the same structure and can carry lower monthly costs because the vehicle has already absorbed its steepest early depreciation.
End-of-lease costs are real and contractually required to be disclosed upfront. Expect a disposition fee, typically $300 to $500, plus potential mileage and wear charges if you return the vehicle.
According to TransUnion’s 2026 consumer vehicle survey, 17% of Gen Z and Millennial consumers intend to lease their next vehicle, more than double the 7% rate among Baby Boomers.

How Does Car Leasing Actually Work?

Leasing works by paying for the portion of a vehicle’s value you consume during the lease term, not the full purchase price. The lessor buys the vehicle and grants you the right to drive it for the agreed period. Your payment is built from three inputs: the vehicle’s starting value, its projected residual value at lease-end, and a finance charge on the difference.

Here’s what that looks like in practice. A shopper named Maya is considering a certified pre-owned sedan with a market value of $28,000. She negotiates a two-year lease, and the vehicle is projected to be worth $19,000 at term-end. She’s paying for $9,000 in depreciation, divided by 24 months, plus the finance charge. She never finances $28,000. That’s why lease payments are often lower than loan payments on the same vehicle. This example is illustrative only and is not an offer to lease. Actual cap cost, residual value, payment, and fees vary by vehicle and approved credit.

At term-end, Maya has three standard options: return the vehicle, purchase it at the contractual residual value, or in some cases trade into a new lease. None of these are surprises. Under the Consumer Leasing Act, federal law requires the lessor to disclose all material lease terms, including end-of-lease charges, before you sign, according to the Federal Trade Commission.

Lease vs. Finance: Which One Is Right for You?

Neither option is universally better. The right answer depends on how you drive, how long you keep vehicles, and what matters most to you financially.

Leasing tends to work well when you drive a consistent number of miles, prefer to move into a newer vehicle every two to three years, and want warranty coverage throughout the term. Financing makes more sense when you drive heavily, plan to keep the vehicle beyond four or five years, or want to build equity toward a future purchase.

The Mileage Question Matters More Than Most People Realize

Most consumer leases set an annual mileage cap, commonly between 10,000 and 15,000 miles. Exceed that and you’ll owe excess mileage charges at return, which according to consumer legal resources typically run 11 to 20 cents per mile over the contracted allowance. A shopper who drives 20,000 miles per year and signs a 12,000-mile lease will face a meaningful bill at term-end. Do that math before you sign, not after.

If your driving is heavy or unpredictable, negotiate a higher mileage cap upfront. Buying extra miles in advance is almost always cheaper than paying the per-mile overage rate at return.

Can You Lease a Used Car?

Yes, and it’s one of the most underused options in consumer automotive finance. Used vehicle leases operate on the same structural logic as new-car leases: you pay for the depreciation that occurs during your term, then return the vehicle or buy it out. Because the vehicle has already absorbed its sharpest early depreciation, the gap between starting value and residual value is often narrower, which can produce lower monthly payments compared to leasing the same model new.

Used leases require a lessor willing to originate on pre-owned inventory, which is why most traditional lenders don’t offer them. AmeriTrust Financial Technologies specializes in this space, offering new and used auto leases through a platform that integrates directly with dealer workflows. For consumers, that means more dealerships can present a used lease option at the point of sale rather than defaulting to a loan or new inventory.

Eligibility requirements, including credit profile, vehicle age, and mileage at origination, vary by program. Explore your lease or finance options with your dealer to see what’s available on the specific vehicle you want.

What to Read Before Signing a Car Lease

Read the entire lease agreement before you sign. Pay close attention to four items: the capitalized cost (the vehicle’s agreed starting value), the residual value, the mileage allowance and per-mile overage rate, and the itemized end-of-lease charges.

The most common surprise for first-time lessees isn’t the monthly payment. It’s what they owe at return. Three charge categories appear in most lease agreements.

Disposition fee: Charged when you return the vehicle without purchasing or re-leasing. According to LeaseEnd, this typically runs $300 to $500.
Excess mileage charges: Applied at the per-mile rate in your contract for every mile above your allowance. Rates commonly fall between 11 and 20 cents per mile, according to consumer lease disclosures published by the Legal Aid Center of Southern Nevada.
Excess wear charges: Applied for damage beyond normal use. Your lessor will inspect the vehicle at return.

The Consumer Leasing Act requires all of these to be disclosed before you sign. Read that section carefully, ask your dealer to walk you through it, and if mileage overage is a realistic risk for your situation, address it in the negotiation.

Frequently Asked Questions

What is the difference between leasing and buying a car?

Leasing a car means you pay for the vehicle’s depreciation over a set term, typically 24 to 36 months, then return it or buy it out. Buying means you finance or pay the full value and own the vehicle when it’s paid off. Leasing usually produces lower monthly payments, but you build no equity and face mileage and condition restrictions. The better choice depends on how long you keep vehicles and how much you drive.

Can I lease a used car, not just a new one?

Yes, you can lease a used car. Used vehicle leases work on the same principle as new-car leases: you pay for the depreciation that occurs during your term, then return the vehicle. Because the car has already absorbed initial depreciation, lease payments can be lower than a comparable new-car lease. AmeriTrust Financial specializes in used vehicle lease origination for exactly this reason.

What fees should I expect at the end of a car lease?

At lease-end, expect a disposition fee, typically $300 to $500, if you return the vehicle rather than purchase it. You may also owe excess mileage charges, commonly 11 to 20 cents per mile over your contracted limit, and charges for wear beyond normal use. The Consumer Leasing Act requires all these costs to be disclosed in your contract before you sign.

Does leasing a car affect your credit score?

Yes, leasing affects your credit in the same general ways as financing a purchase. Applying for a lease typically triggers a hard inquiry, which can cause a small, temporary dip in your score. Making on-time payments throughout the lease term is reported to credit bureaus and can strengthen your credit history over time.

What credit score do I need to lease a car?

There is no single required score for every lease program. Prime and super-prime borrowers typically access the broadest range of programs. Subprime lease programs do exist for shoppers with lower scores, though terms will vary. AmeriTrust Financial works with both prime and subprime customers, so your options depend on your specific credit profile, not a single cutoff.

What happens if I drive more miles than my lease allows?

If you exceed your contracted annual mileage allowance, you will owe excess mileage charges at lease-end. Those charges commonly run 11 to 20 cents per mile over the limit. If you know you drive heavily, negotiate a higher mileage allowance upfront, since buying extra miles at signing is almost always cheaper than paying the per-mile overage at return.

If you’re ready to explore whether a lease fits your situation, the team at AmeriTrust Financial can connect you with dealers offering new and used lease options matched to your needs. Contact us to get started, or review the full range of lease and finance options available through the AmeriTrust platform.

Sources

The information on this blog is provided by AmeriTrust Financial Technologies Inc. for general educational purposes only and is not financial, legal, or tax advice. It is not an offer or commitment to lend or lease; AmeriTrust provides financing indirectly through participating dealers, and all credit is subject to review and approval. Any rates, payments, lease examples, or terms shown are for illustrative purposes only, may not reflect current offers, and vary based on approved credit, vehicle, and applicable fees — actual terms are disclosed in your final documents. For leases, the lessee is responsible for excess mileage, excess wear, and any disposition fee at lease end. AmeriTrust Financial Technologies Inc. is an Equal Opportunity Lender and maintains a fair lending monitoring program to support equitable treatment across all applicants. We make no warranty as to the accuracy or completeness of this content and are not responsible for third-party linked sites. Products may not be available in all states; terms and conditions apply. NMLS ID 2708412.