You may be driving around with only a few weeks left in your car lease and a single thought keeps popping through your head: what should you do with the lease? Returning a leased car to rotate to the next car is the move a lot of people default to, however many car dealerships may offer a better deal: buying your lease.
Used car dealerships like Carmax are running low on inventory due to the supply issues. These dealerships may be willing to buy your lease and they might even offer a bigger cash payout compared to the default buyout of your lease. Your leased car still has a residual value which is the predicted car’s worth at the end of a lease, so if you had a car for a long time, the default buyout offer may be a bit low compared to its actual worth. This is where used car dealerships can swoop in and help you make a little bit of extra money.
You can sell off the car to a used car dealership and then use that money to pay off the lease and pocket the difference, which could save you thousands in the long run. By doing this, you can also avoid other headaches that are on a lease contract such as over-mileage fees or any cosmetic damage done to the body of the car over time.
However, to get the best deal for your lease, you need to do some math and research. You’ll need the following information:
- Find the residual value that is on your lease. This is the estimated value of the car that is predicted at the end of the term when you first sign the lease. There also might be additional fees as well such as transaction fees or sales tax.
- Call the leaseholder to figure out the buyout price. This is usually the remaining lease payments in addition to the residual value.
- Figure out the market value of the vehicle. You can check with multiple websites or check with dealerships. Places like Carmax will give a free appraisal as well.
One roadblock that may hinder your progress when selling a lease is the contract itself. Some contracts may not allow third-parties to buy out the car itself, but there is an easy way around this hurdle. You will have to buy out the car yourself first, then you can sell it either privately or to a dealership for profit. This is due to leaseholders knowing that the volatility of the market may change over time, especially due to recent, catastrophic events. Of course, before you decide to buy out the car lease, make sure you have a buyer lined up to ensure your profit.
If you wish to avoid the headache of selling your car or you plan on not owning a car in the future, you can use the knowledge of a buyout as leverage in negotiations when the lease is nearly up. Dealerships know the situation and may agree to waive any over-mileage fees or body damage if you say you can get a better deal by selling the lease instead of returning the car. Every dealership is in the business of making money, so they will want to get the car back if they know it will make them more money down the line.
Additionally, another option amid all this car market volatility is that you can just buy the car yourself and keep it. This way, you get to keep the car if you have grown attached to it and get it at below market value since the residual value of the car is set in the contract.
If you have any questions, feel free to give us a call at 877-212-2450!
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