Many people in the US prefer to buy their cars outright rather than lease them. However, leasing is growing in popularity, but there is a lot that remains unknown about the ins and outs of vehicle leases.
People new to leasing often ask, “Can you sell a leased car? If so, how?” These are good questions to have the answers to, as you might change your mind about a vehicle and wish to sell or exchange it.
In this article, we’ll pick apart the world of car leasing and how it affects you if you decide to sell. This is essential information to have access to before you sign on the dotted line for your leased vehicle.
What is a Leased Car?
First things first, what exactly is a leased car? Well, a leased car is the vehicle equivalent of renting an apartment. Instead of purchasing the car outright, you hire it from a leasing company. The payments you make each month are similar to rent, to hire a car, and not to own it.
The Benefits of Leasing Cars
So, what is the point if you pay each month and you don’t even get to own the vehicle at the end? Don’t discredit it just yet. Some people like the idea of leasing, as unlike a property, cars depreciate as soon as you drive them off the forecourt. Therefore, a brand new car will not hold its value as an investment piece.
Another reason leasing is an excellent alternative to buying a car is that it’s a low-maintenance option. Repair costs are often covered, and as the vehicle gets older, you can exchange it for another at the end of your agreed lease contract. It gives car lovers more choice over the vehicles they drive.
Can you Sell a Leased Car? What is the Catch?
So, whilst there are undoubtedly benefits to leasing cars, there is still the question of selling to answer. In short, you can only sell your leased car if you first buy it from the dealership that owns it.
To be able to sell your leased car, you need to approach the dealership and enquire whether they want to sell the vehicle in the first place. Once an agreement has been made, you will be provided with a quote. This quote will include any remaining monthly payments if you end the contract early, ownership transfer fees, and taxes.
There are a few catches, so it pays to be aware of these before you proceed. As mentioned, terminating a contract early can incur additional fees, as can sales tax in certain states. Also, car prices do go up and down, so be sure that you are buying and selling at a time when you are not losing out. Timing is key.
What Else Do You Need to Know Before Selling a Leased Car?
Interested in leasing, buying, and reselling? Before you do, there are a few other useful things you should know before you decide to go ahead.
Check your lease agreement
Thinking about selling a leased vehicle? The first thing to do is to check your lease agreement. While some leasing dealerships do allow buyouts for resale purposes, not all do. Look out for specific clauses and restrictions that could cause you issues during the reselling process.
Turning a profit
Whilst cars are known to depreciate, that’s not to say that selling your old leased vehicle can’t be profitable. Make sure that you do your research and check the car’s current market value beforehand. If the amount you need to put forward to buy out the vehicle from the leasing dealership is less than the market resale price, you could walk away with a tidy profit.
Dealer markups
However, be careful of dealers who try their luck and overinflate the buyout figure. Be prepared for this eventuality, backed up by your market value research, and you may be able to negotiate a better offer.
Where to Sell Your Leased Car?
Once the buyout is complete and you are the owner of your previously leased vehicle, you are free to sell the vehicle (subject to any other conditions, that is). When the timing is right, you may want to shop around for interested buyers to turn a higher profit.
But, where to sell your leased car? Well, you can sell the vehicle to a private seller, which may mean that you get a better price for it. However, this can result in more paperwork and hassle. If you prefer a quicker, more efficient sale, you could sell the vehicle to a dealership. Though this might mean you sell at a reduced cost. It all depends on what you value most: time or money?
Decisions, decisions. Though by fully understanding your lease agreement and researching thoroughly, it is possible to profitably sell your leased car.
