Home > 2016 > Auto Loans

A New Startup Is Taking Used Car Leases Mainstream

Advertiser Disclosure Comments 0 Comments

If you’ve ever wished that leasing a car or buying a used one was easier, your wish might be about to come true thanks to a San Francisco startup Beepi.

The company leases used cars, letting drivers get into used cars at a lower price point than a new lease or used car loan, and without all the hurdles typical to the car-shopping experience.

As you probably already know, traditional auto leases have plenty of advantages over buying a car. Car dealerships offer more incentive for leasing, including $0 down payment for qualified buyers, for example. And when you lease, you also enjoy lower monthly payments and sales tax. However, when car leases terminate, lessees end up surrendering a four-year-old (or newer) vehicle — not very old for a modern vehicle. Beepi sees those cars as an opportunity.

“We’re fundamentally changing the way people buy and sell cars, taking a process that hasn’t changed over the past 100 years and making it simple and trustworthy,” Tyler Infelise, Beepi’s head of product, said in an email. “We’re giving buyers and sellers the simplicity of transacting completely online or in-app. People love it for being the total opposite of what they were used to, and as a result, we’ve grown [10 fold] in the past year.”

According to recent data comparing used car and new car leases, compiled by Swapalease.com, used cars make for much more affordable lease options. And because used cars retain 30% more of the original value after three years, used car leases subsequently have an average depreciation charge of nearly $140 less than new car leases. Comparing an analysis of over 50,000 estimated average lease term calculation with typical finance offers and terms, the Merit Mile case study found a new sedan lease came in at $553.76 monthly. This compared to a used sedan lease payment of only $387.01.

Given that disparity, the demand for the Beepi’s model is seemingly growing. The company just launched in Houston, its 16th market.

Before You Lease or Buy

In the past few years, car leases and loans have become more available to people with bad credit, with some analysts even suggesting there might be an auto loan lending subprime bubble akin to the housing bubble of 2008.

Though Beepi does offer customers an affordable leasing option, the company still determines terms based in part on your credit score. It’s important to monitor the health of your credit report and score before you apply for a loan or lease. You can get your credit reports for free once a year at AnnualCreditReport.com, and you can check two of your credit scores for free every month on Credit.com.

More on Auto Loans:

Image: Pixland

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team