How To Make A Profit On A Car Leasing Deal
According to Edmonds, more Americans than ever before are choosing to lease vehicles instead of buying them. At the start of 2020, a record 4.3 million car leases expired, indicating a drastic shift in consumer sentiment.
The reason why many people are wary of leasing is simple; even though they’re making monthly vehicle payments, they’re not building any equity. At the end of a leasing period, the individual simply walks away from the vehicle. To many, this isn’t a prudent financial decision and doesn't amount to much more than simply renting the car.
Although this may be true in some cases, there are instances in which you can sell your leased car for a profit. To understand how this can be achieved, we must first review what a lease is and how to negotiate a lease buyout.
When leasing a vehicle, the auto company will require you to make an upfront payment, followed by subsequent monthly payments for an agreed-upon period, during which you can use the vehicle. Most lease agreements include a buyout option, meaning the lessee can choose to purchase the car at a pre-set 'buyout' price. If the agreement doesn’t have a buyout clause, you can always approach the leasing company to negotiate a buyout agreement.
If your leasing term is up, it's a good idea to do some research on the vehicle’s make and model and see if the buyout price is, in fact, less than the current market value. If so, the car can be purchased and potentially sold at a profit.