A car lease is a form of auto financing that lets you drive a car, truck, or SUV for a set duration and mileage limit. Typically, leases last for three or more years, but a short-term car lease allows you to lease a vehicle for 24 months or less. Though less common, these leases can be a suitable option if you only need a vehicle for a short period.

Pros and cons of short-term leases

A short-term car lease offers one significant benefit: minimal commitment. If you’re unsure about the type of car you want or enjoy variety, leasing a vehicle for less than two years could be ideal.

However, short-term leases have some drawbacks. The monthly cost can be significantly higher than a standard lease for two main reasons:

  • Depreciation: New cars lose about 20% of their value in the first year. A large portion of your lease payment covers this depreciation. Since the residual value is lower in the short term, you’ll end up paying more.
  • Higher Monthly Payments: Shorter lease terms spread the same overall cost over a shorter period. This results in higher monthly payments. Additionally, you still pay sales taxes and fees in many states.

According to Experian data, the most common lease terms are 35 or 36 months. Short-term leases are less common, meaning you may need to search extensively and negotiate to find lease options for less than three years.

How to get a short-term car lease

Though short-term leases are uncommon, obtaining one follows the same process as a standard lease.

  • Research Your Options: Find a dealer offering short-term leases or willing to negotiate. Ensure they have the type of vehicle you want to drive.
  • Negotiate the Lease Contract: Besides securing a short term, negotiate costs like the disposition fee, mileage allowance, and sale price.
  • Compare Offers: If you find multiple short-term lease deals, compare them closely. Consider the monthly payment and end-of-lease fees, as these will affect the total cost.

Avoid common leasing mistakes by knowing your monthly payment and being prepared to negotiate. Estimate how much you will drive to ensure a short-term lease meets your needs.

Alternatives to short-term auto leases

While negotiating a short-term lease with a dealership is an option, there are other ways to drive a car for less than three years.

1. Take over someone else’s lease

Most auto manufacturers allow another person to take over a car lease from the original lessee who wants out of their contract.

While this can be arranged between two individuals, it might be easier to use a third party, such as SwapALease or LeaseTrader. These services specialize in pairing current lessees with those looking for a short-term car lease. You might also have more luck finding a lease transfer in states with a high number of leases, such as Michigan, New York, and New Jersey, according to Experian data from the end of 2023.

Opting for a short-term lease through a lease transfer allows you to avoid making a down payment. Additionally, your monthly lease payment would be the rate originally negotiated by the first lessee, potentially saving you money. However, you won’t be able to renegotiate any less favorable terms, such as wear-and-tear fees and mileage overage charges.

2. Exit a standard lease early

If you can’t find a suitable short-term lease, you might consider taking on a standard term lease and ending it early.

You can use third-party services like those mentioned earlier to transfer your lease to a new lessee. However, it’s crucial to confirm that your lessor permits this upfront. Even if you find someone willing to take over your lease, it won’t matter if it violates the lease terms.

Another option is to walk away from the lease entirely. Be aware, though, that this usually incurs an early lease termination fee along with any other end-of-lease charges. These costs can add up quickly, making early termination significantly more expensive than simply completing the lease term.

3. Get a long-term rental

Many rental car companies offer long-term rentals, often referred to as “mini leases.” These rentals have certain advantages:

  • Flexibility: Unlike traditional leases, long-term rentals don’t lock you into a contract, allowing you to return the vehicle at any time.
  • No mileage limits — most of the time: Generally, there are no mileage restrictions with long-term rentals, unlike standard leases. However, this may vary, especially for specialty vehicles.
  • Change cars at will: Rental companies often allow you to switch cars during your rental period, giving you the chance to drive different vehicles.

However, while long-term rental rates are lower than standard rental rates for a few days or a week, they are typically more expensive than a lease takeover.

In Conclusion

A short-term car lease can be appealing if you don’t want to commit to one vehicle for an extended period or if you need a vehicle temporarily.

However, shorter terms usually come with higher costs. Before committing to a short-term car lease, shop around at multiple dealerships to find the most competitive contract and compare costs with long-term rental options.