Why Sell Your Leased Vehicle?

Why Sell Your Leased Vehicle?

Car leases are often designed to allow the lessee to return the vehicle at the conclusion of the lease period or purchase the vehicle in a buyout. However, not many discuss the option of returning a leased car to the dealership or selling a leased car to a third party.

Is It a Good Idea to Sell Your Lease?
If you are leasing a car and no longer require it due to a change in your work or driving needs, or if you simply do not want to keep it, selling a leased car makes sense. When the market demand is great and the automobile has low wear and tear, low mileage, and a high market value, selling a leased vehicle can be profitable.

Here are the steps to deciding whether it is worthwhile to sell a leased car: 

1. Determine the Value of Your Vehicle
First, determine the equity of the vehicle, or how much it is worth.

 2. Know Your Contract's Residual Value
Examine your leasing contract/agreement for the "Residual Value." This is the amount that the car leasing company expected the car to be worth at the end of the lease term. The residual value is frequently used as the buyout price or as a method to compute the buyout price by the leasing firm.

 3. Investigate Today's Buyout Price
Contact the leasing firm with which you have a contract and inquire about the buyout price. The buyout is the amount the lease company would charge you (including costs) if you choose to purchase the vehicle from them. If the residual value is greater than the buyout price, you will gain from purchasing the vehicle. 

 4. Investigate Current Market Value
Go online to a website that estimates car values. You'll need to enter information about the vehicle, such as the year, make, model, condition, VIN number, and so on. If the leasing firm misjudges the car's residual value and the market value is greater than the residual, you may be able to recoup some of your investment by selling the vehicle to another dealer.

Calculate the residual value by comparing it to the current market value. If the current market value exceeds the residual value, it may be worthwhile to purchase the vehicle, especially if you can negotiate a good buyout price that allows you to come out ahead.

How to Sell a Leased Car
Lessees who want to sell their leased vehicle have a few options.

Selling to a private party
This refers to selling the leased car to a friend, relative, or stranger who is interested in the vehicle, and it can be done in one of two ways.

You can buy the car from the leasing business and then sell it to an individual. You can also perform a "third-party buyout," which is when you sell the car without purchasing it from the lease company.

Find out from the leasing company or manufacturer if this is permitted, and if it is, they will usually help you with the transaction. After receiving payment from the third party and paying off any remaining costs on the vehicle, ownership can be transferred to the buyer.

Selling to a local dealer or returning a leased vehicle to the dealership
Many vehicle dealers are looking to buy and may be willing to pay a decent price due to a shortage of good used car inventory.

To sell to a local dealer, you would perform a lease buyout and then sell the vehicle.

You might also sell your leased car to the dealership where you leased it and receive money or trade-in value towards the purchase of a new car.

Selling to an online service
Companies such as CarMax, Autotrader, and others buy cars or assist with sales. Before making a commitment to sell, check the car's valuation and compare it to the lease buyout value.

Alternatives to Getting Rid of a Lease
If selling or buying the car isn't an option, there are additional options for ending a car lease, such as:

- Lease Transfer
Do you know someone who adores your vehicle? Some leasing firms will let you transfer the lease and lease payments to someone else;

- Lease Trade
At the end of your lease term, you have the option of exchanging the vehicle for a new leased vehicle. If you decide it's time to buy a new car, inquire about special incentives at the dealership. If you buy a new automobile, they may be ready to forgo certain lease turn-in fees;

- Returning the Vehicle
At the end of the lease term, simply return the vehicle as specified in the lease contract. Before returning your leased vehicle, check the lease agreement to verify if you've met the mileage, wear and tear, and other conditions. Failure to follow the lease terms could cost you at the conclusion of the lease period. If you exceed the mileage limit in your lease agreement and the vehicle shows substantial wear and tear, the leasing company may charge you, and the fines might total thousands of dollars. 

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