The Pros and Cons of a Short-Term Car Lease

A lease lasting between six and 24 months may offer convenience and flexibility, but it will cost you.

Close up view of agent giving car key to customer after signing rental contract formShutterstock

Article QuickTakes:

A short-term lease is not for everyone. In fact, it’s not for most people, which is why many new-car shoppers aren’t even aware that they can lease a vehicle for less than two years. However, if you need a vehicle for a brief period and are willing to pay a premium for convenience, a short-term lease may be worth it.

Given the limited availability of new vehicles and how challenging it can be to land the car you want right now, you may have reason to consider a short-term lease. The microchip shortage has forced many car buyers to make compromises when purchasing a new car, and it’s left some buyers scrambling to simply find a vehicle that meets their transportation needs. A short-term lease can be used to bridge the gap between one lease ending and the vehicle you want becoming available.

What is a Short-Term Lease?

Typically six to 24 months in length, a short-term car lease works like any other lease: You make monthly payments to drive the vehicle for a predetermined period of time with restrictions on how many miles you can put on the vehicle. Whether you’re nearing the end of a current lease or just want to avoid getting tied up in a long-term contract, a short-term car lease can help relieve a lot of the stress associated with purchasing a vehicle, especially when time is a factor.

So, how does one find a short-term car lease if considering it as an option?

Ronald Montoya, senior consumer advice editor for Edmunds, says many dealerships offer 12-24 month leases, but you typically have to inquire about them. “It's not a very common thing, and most people just default to the longer leases,” Montoya says. Availability of short-term leases varies from dealership to dealership and brand to brand. Honda, for example, does not offer leases shorter than 36 months while Ford will allow leases as short as 24 months. Leases shorter than two years tend to be easier to find through luxury brands.

Online sources such as SwapALease and LeaseTrader also offer options for those looking for a short-term vehicle lease. These lease transfer services are commonly used by individuals looking to get out of a lease due to unforeseen circumstances. They may be facing financial difficulties, a long-distance move, or some other unexpected life change. In some cases, lease transfers are used by people who are in danger of exceeding their allotted mileage. The original driver’s distress may lead them to list the vehicle with a cheaper monthly payment than what they pay. Just know that you will be on the hook if you exceed the mileage limits of the original lease.

How Much Does a Short-Term Lease Cost?

Edmunds’ Montoya notes that there are a few things consumers need to keep in mind when considering any short-term car lease, regardless of what route they’re considering taking. The most notable is cost.

“The payments tend to be higher,” with short-term leases, explains Montoya. “Whereas if you did a traditional three-year lease, that's spread out a little bit longer over the course of the three years, and also most deals are kind of structured for a three-year deal, so they tend to have more incentives on those longer ones.”

As an example, Porsche Grand Rapids in Grand Rapids, Michigan, provided quotes for leasing a $68,500 2022 Porsche Macan compact SUV with no down payment and an annual 12,000 mile allotment. A 36-month lease for this Macan would cost $1,198 per month, while the payments rise to $1,450 for a 24-month lease. A 12-month lease boosts the monthly outlay to $2,177 per month (82% higher than the three-year lease), making it easy to see why so few people opt for short-term leases.

Consumers also need to be mindful of the annual mileage allocated in the short-term lease agreement, whether leasing the vehicle from an actual dealership or through an online lease transfer service.

“That applies to any lease, but I think in a one-year lease, if you're not familiar with how often you drive, then that may be a problem for you,” says Montoya. “Whereas in a longer lease, if you get into it one year and you realize, ‘Boy, I've been driving a lot,’ you can kind of adjust in the next year or so, and maybe take the car less. You have to be more on top of the mileage.”

In the end, the decision – whether a short-term car lease works for you – essentially boils down to two major factors: time and how much you’re willing to pay for that time. “It's more about whether this short period of time fits when you need a car, or if you want to be able to get rid of it quickly,” says Montoya. “Because if you're going to keep the car for a while, I would just tell them to go for a longer lease because the payments are much more affordable.”

This site is for educational purposes only. The third parties listed are not affiliated with Capital One and are solely responsible for their opinions, products and services. Capital One does not provide, endorse or guarantee any third-party product, service, information or recommendation listed above. The information presented in this article is believed to be accurate at the time of publication, but is subject to change. The images shown are for illustration purposes only and may not be an exact representation of the product. The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the availability or suitability of any Capital One product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional.
author photo
Marcus Amick
Marcus Amick has more than 20 years of journalism experience covering the world of automobiles, transportation, and mobility. The native Midwesterner—who now splits his time between Los Angeles and the Metro Detroit area—has written for a number of national automotive industry and consumer media outlets. Marcus also consults in the automotive sector, providing insight on lifestyle trends and how consumers connect with vehicles beyond the sheet metal.