You may have leased a car and now it’s time to return it back to the dealership. You may be offered to renew your lease but what if you’re interested in moving on with a brand-new vehicle? If this is your first time leasing a car, you may not be sure about your options for trading in or reselling your leased car. However, you are not limited to simply renewing a lease or trading in for another automobile that you don’t necessarily prefer.
When you are at the end of your lease, you should always check to see how much its worth. Failure to do so could result in you missing several thousand dollars. With the price of used cars now on the rise, there are some drivers who lease their vehicles that are now taking a big chunk out of the payment for another vehicle by selling their leased vehicle.
It may come as a big surprise to many consumers out there, but the money that you paid to lease your car, that equity is yours. So, the answer is Yes, you can sell your leased car. The reason this may sound so unfamiliar is because the terms have only recently changed.
The Rules of Car Leasing
Car dealers estimate what their vehicles will be worth when the lease term is over. Their estimate is known as the residual value. This is also the amount that the car can be sold for when the lease is over.
Since the residual factor for a car can fluctuate at times, some cars may end up being valued more than their residual value. And since can always purchase your leased automobile at the end of the term, you can earn money from the dealership’s poor calculations. However, if the residual value is more than what the car is worth, you have the option to return it without experiencing any additional fees.
And now, since the inventory for new vehicles are so low, and strict credit rules have caused used car salesmen to raise their prices, it has placed buyers in charge of what to do when it comes to selling their leased car.
While there are some lease companies that don’t allow this arrangement in their agreements, you should always check your lease terms to be sure. Used car juggernaut CarMax has mentioned that consumers can get the money back from their car most of the time, based on the terms of their website. They say that selling your leased car is as easy as selling any other vehicle. They will appraise the vehicle and get in touch the lease company for a quote for you, and then process the amount of equity you may have.
How Do You Know if You Will Receive Payoff?
It is a good idea to pay attention to how much your leased car is worth and stay up to date on any changes, especially as you get closer to the last days of your lease. It is recommended that you learn about the trade-in value for your car so that you have a good idea of what to expect.
The next thing to do is find the residual value for your car which is in your lease contract. Subtract that value from the CMV or current market value, and the answer will be the amount of equity you may have (which you will always have to discuss with the dealer). A good way to stay on top of your numbers is to get the actual market value for your car and provide the dealer with proof of the current price that will help to build up your negotiating terms.