The supply chain shortages due to COVID-19 have spread in multiple industries, and the automotive industry has not been immune. An increase in demand in the used vehicle market as fewer new cars roll off from assembly lines. That means it could be a great chance to sell your leased car, with used-vehicle prices at record highs, you may be able to cash in your leased car at a high price.
If your leased vehicle is in the closing months for your lease term or at the lease end, you might be able to get out of the lease and walk away with several thousand dollars. Here are the three ways to turn your leased car into cash.
1. Use Lease Buyout and Sell Your Car To A Third Party
A lease buyout is in the end or at any point in time in a lease term, you have the option of buying out your leased car at the buyout price. When you buy out your leased vehicle when the lease is up, the price you need to pay will be at the guaranteed purchase option price. The guaranteed purchase option price is set at the beginning of the lease and based on the car’s expected residual value at the end of the lease. While you are buying out your lease before the contract is up, the price you need to pay will be recalculated, and it will be a combination of the car’s residual value plus the lease balance.
With this strategy, you need to first find out the residual value in your lease contract then compare it with the current market value. If your buyout amount is less than the market price, buying your leased car and selling it to a dealer could be a good way to pocket a profit.
A lease buyout is a fastest and easiest way to sell your leased car. Get an Carnex Instant Offer by just entering a few details about your leased vehicle and you will cash in your car on the same day! If you are thinking about an early lease buyout, you need to first check if your contract allows it and if there are any restrictions. Most lease contracts are open to early buyout, while some don’t. So before you make any moves, read your lease contract to determine if you have any restrictions for an early buyout.
2. Buy Your Leased Car and Sell It
Once you have purchased the vehicle, you can sell your leased vehicle for the most money. It’s not exactly like selling your car to a third party, selling your used car privately gives you more earning potential. Because of the new car shortage, the residual value in your leased car is likely to be well below the current market value. It means your leased car may be worth more on the marketplace, and while you can purchase it at the present residual value, it’s very likely you will make a good profit.
However, don’t expect cash immediately with this strategy, selling your leased car privately can take a bit of time. You will also need to invest your time in communicating with potential buyers, answering questions about the vehicle, and taking people for test drives. Or even need to spend money for detailing, reconditioning, listing, and marketing.
3. Use the equity on your leased car as the down payment for your next car
If you are looking to buy a new car, this can be another way to turn your previous car into cash. You can use the equity in your leased car as a downpayment for a new one rather than pay that money out of pocket.
In fact, while used vehicle prices are at a recorded high, buying or leasing a new vehicle today means you may pay over MSRP. While the dealer will only offer the same amount at your leased car buyout to put towards a new car, you might have to shop around to locate the best offer. Alternatively, you can also trade in your old vehicle to reduce the sales taxes on the new one. Makes sure you shop around and chat will the dealers to see what the best option is.
Looking to trade your car? Now you can get extra money from your car at Carnex.
Learn more about the benefits of buying from Carnex. We believe that all clients deserve to know the good and bad of what they’re buying. Because we wanted to know these when we bought cars. That’s why at Carnex.ca, we will proudly display every detail every step of the way. Browse all the best cars, automobile buying tips, auto insurance, young drivers, driving techniques, auto industry trends from Carnex Blog.
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