Loans, Taxes, and Law

What is Short Term Car Lease and should you go for it?

Leasing a car has become an increasingly popular option for many drivers looking to get behind the wheel of a new vehicle without taking on a long-term financial commitment. Typically, car leases run for 2-4 years. However, some dealerships and rental car companies offer shorter lease terms of 1-2 years, known as short term car leases.

But are short term leases a good choice? This comprehensive guide examines the pros, cons, options, and steps for getting a short term car lease to help you decide if it’s right for your situation.

What is a Short Term Car Lease?

A short term car lease is generally considered any lease under 24 months in length. Most standard leases run 2-4 years, so short term leases offer a much briefer commitment.

With a short term lease, you can drive a car for a set number of months, then return it to the dealer when your lease ends. You do not own the vehicle. Short term leases allow access to newer cars without years of payments.

Short Term Lease Options

If you decide a short term lease fits your needs, here are some options to get one:


Some dealers offer lease terms under 24 months. Shop around, as shorter leases may cost more per month than longer leases. You’ll likely need good credit to qualify. If you don’t have the good credit score, just read a comprehensive guide about leasing a car with low credit score.

Useful Information: Lease a Car with Bad Credit | Here’s How?

Rental Car Companies

Major rental brands offer long-term rentals from 4 weeks up to 11 months. This gives flexibility if you’re unsure exactly how long you need a car.

Lease Takeovers

You take over someone else’s existing car lease through sites like You don’t negotiate terms but inherit payments/mileage limits.

Pros of Short Term Car Leases

Short term leases offer advantages including:

  • Newer vehicles – Drive newer models more frequently since you swap cars as leases end.
  • Flexibility – Shorter commitments if you only need a car temporarily.
  • Lower startup costs – Taking over a lease may avoid down payment needs.
  • Convenience – Long-term rentals include maintenance/insurance.

Cons of Short Term Car Leases

Disadvantages of short term leasing include:

  • Higher monthly payments – Payments are higher because depreciation is spread over fewer months.
  • Mileage limits – Avoid exceeding your mileage allotment or face penalties.
  • Limited availability – Short term leases aren’t as widely offered as longer leases.
  • Existing wear/tear – Inheriting someone else’s lease means you take their wear and tear.

More Information: Can You Lease a Used Car? Everything You Need to Know

Who Should Consider a Short Term Lease?

Short term leases best suit:

  • Temporary transportation needs – Relocations, college, internships
  • Wanting new cars frequently – Ideal if you like driving new models
  • Desiring flexibility – Unsure if your car needs/tastes will change

What is the Shortest Car Lease Term Available?

While subject to interpretation, leases under 24 months are generally considered short term. The shortest lease possible depends on what you can find available:

  • Dealerships may offer terms as short as 12 or 18 months.
  • Taking over someone else’s lease could get you 6-12 months depending on their remaining time.
  • Long-term rentals allow leases as brief as 4 weeks, with flexibility to extend monthly.

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Alternatives to Short Term Car Leases

Other options beyond short term leasing include:

Long Term Rentals

Rent from a company like Avis or Hertz for several months. Provides flexibility to return the car anytime.

Traditional Lease

Get a standard 2-4 year lease, then try to transfer it early if your needs change.

Buying a Used Car

Purchase a used vehicle if you can afford ownership. Won’t have lease-end mileage/wear penalties.

Ride Sharing

Use services like Uber or Lyft if you need transportation occasionally, not daily.

How to Get a Short Term Car Lease

Follow these steps when seeking a short term lease:

  • Check your credit score and history. Good credit helps approval odds.
  • Research leasing companies and dealers with short term options.
  • Compare lease terms, mileage limits, conditions of cars, and monthly payments.
  • Test drive vehicles you’re considering to ensure a good fit.
  • Submit a lease application with required down payment and fees.

Can I End a Short Term Lease Early?

  • With a dealer lease, you may be able to transfer your lease to another party, but this isn’t guaranteed.
  • Long-term rental contracts allow you to return a car any time with proper notice.
  • Taking over someone else’s lease locks you into the remaining term, with no early end option.

Common Short Term Lease Terms Explained

When researching short term leases, here are some key terms to know:

  • Mileage limits – The max miles you can drive annually without excess mileage fees.
  • Wear and tear – Damage beyond normal use that you’re responsible for fixing.
  • Down payment – An upfront payment, often thousands, required upon leasing.
  • Acquisition fee – A fee charged by the dealer for setting up the lease, around $300-$600.
  • Disposition fee – A fee charged when ending a lease, around $300-$500.
  • Security deposit – A refundable deposit in case of damage, defaults on payments, etc.

Is a Short Term Car Lease Ultimately a Good Idea?


  • Flexibility
  • Newer vehicles
  • Lower commitment


  • Higher monthly costs
  • Mileage limits
  • Wear and tear responsibility
  • Limited availability

For drivers who only need a car temporarily or frequently want to swap vehicles, the flexibility and low commitment of short term leases can outweigh higher costs. But carefully compare all options first to find the best transportation solution for your situation.

FAQ About Short Term Car Leases

How much are monthly payments on short term leases?

Expect to pay more per month than longer leases, likely $100-$300 higher, since depreciation is condensed into fewer months.

Can I get a luxury car with a short term lease?

Yes, dealers offer short term leases on all vehicle types, including luxury and sports cars. Prepare for very high monthly payments.

Do I have to pay sales tax on a short term lease?

Yes, sales tax is included just like longer term leases, based on your state and city tax rates.

What credit score do I need for a short term car lease?

Most leasing companies require good to excellent credit, usually 680 score or higher. Some may accept scores in the low 600s with a larger down payment.

Can I lease a used car short term?

While less common, some dealerships are willing to lease 1-2 year old used vehicle inventory short term.

Can I end a short term lease early?

Ending early is very difficult with dealer leases unless you can transfer it. Monthly rentals offer more flexibility to return the car any time after the first month.

Hopefully this comprehensive guide provided you with a deeper understanding of what short term car leasing is, the pros/cons, and whether it’s the right choice for your situation. Always carefully compare all your options before committing to any car lease.

Brian Morgan
Brian Morgan is an expert in loans and financial regulations. With a wealth of experience, he's a go-to authority in demystifying complex financial concepts. As a prolific writer, Brian provides valuable insights, making him a trusted guide in the ever-evolving landscape of finance.

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