Car Leasing for Teens

Is leasing a car a good idea for teens?

Teenage drivers looking for an affordable way to get a car often look at leasing with its attractive low monthly payments — about half the monthly payment amount required to purchase the same car with a loan.

But is leasing right for teenage drivers?

First, let’s say that leasing a car is not possible for anyone less than 18 years old — because leasing is a form of financing and requires a legal contract that minors cannot sign.

Even though it might seem that the way around that issue is to have a family member lease a car and let the teen drive it, that might not be possible either. The reason is that most car lease contracts restrict who can drive the car.

With some lease companies, only the person who signs the contract may drive. In others, the signer and a spouse. However, many companies will allow other drivers if asked for permission. If you are considering a lease for a teen driver, make sure he or she will actually be allowed to drive the car by the lease finance company.

For teen drivers 18 years old or older, leasing might be a good choice — or not.

Leasing has requirements and limits that often don’t work well for young drivers.

For example, leasing is best for people who only drive a “normal” number of miles each year, usually 10,000 or 12,000 miles. Fees are charged for any extra miles. This can become very expensive for young people who drive a large amount of miles.

Furthermore, leasing requires that the car not be modified and be well maintained, something that teens may have a hard time living up to. Teens often have minor accidents and create damages which must be properly repaired on a leased car (if the car will be returned at lease-end, not purchased).

Finally, leases are designed to be completed as agreed to in the lease contract. It is very expensive to end a lease early. Since young drivers often become tired of a vehicle before the end of a 3-4 year lease, it may not make sense to lease.

Another consideration is that lease companies require a higher and more expensive level of insurance coverage than many people have for their vehicles. This can be very expensive for teen drivers, for which insurance is already expensive enough.

Leasing requires good credit

Leasing requires a good credit history just like a loan. Anyone leasing a car must have a good credit score, a good steady job, and no excessive debt. These requirements may be difficult or impossible to meet for someone just turning 18 years old and just beginning to build their credit and income. Getting someone to co-sign on the lease may be the solution in this case. (see Do I Need a Co-Signer?)

What’s the alternative if leasing doesn’t work?

Most teenage drivers find that a good used car is best suited to their finances and driving needs. In many cases, it’s possible to get a relatively new used car for monthly payments that are as low or lower than leasing a brand new car. That’s because not only are used cars less expensive, in general, but a used car loan can be spread over 4 to 7 years, while a lease is typically restricted to only 3 years. Take a look at our Used Car Advisor site for tips and advice on buying used cars.


Car leasing for teens is usually not a good way to go because of age, credit, insurance, and lease contract requirements. However, there may be situations in which leasing will work well and should be considered.

Before making a decision, make sure you understand how leasing works and how to determine if it’s right for you. That’s what this web site is all about.


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