Archive for January, 2014
People who lease cars tend to enjoy the benefits of low anxiety levels and low monthly payments. When the lease ends, you can turn in the lightly used vehicle and pick up a new one. But according to Edmunds, used-car prices have been driven up by low inventories on new cars and credit concerns, which reduces the number of new-car buyers eligible for loans and drives up demand for used cars.
As a result, some leased vehicles are now worth more than the residual value written into the contract when the vehicles were leased several years ago. Dealers generally do a good job estimating what a vehicle will be worth when the lease expires two, three or four years later, but sometimes unanticipated factors drive actual prices higher or lower than the estimates.
The typical lease contract gives the customer the right to buy the vehicle at the residual value. If the actual value is higher, the customer can profit in three ways.
Selling to a dealer.
First, you can exercise your option to buy the vehicle at the price specified in the contract, then sell it to your dealer, or a Tucson Acura dealer, for the higher market price. Selling to a dealer will fetch a wholesale price, typically the same as the trade-in value. You might get a slightly higher retail price by selling directly to another individual.
Buy the leased car
If you choose to buy the car that you leased, you can turn it in on a new purchase or lease. This allows you to turn the unexpected equity into a down payment. The key thing you want to track down is the actual value of your leased vehicle. You also want to find out how much a dealer would pay to buy the car at an auction.
Sell Privately
The third option is a “lease buyout transfer,” a process for selling your vehicle to someone else, typically someone which whom you share some trust. Your buyer mails a check for the buyout amount to the leasing company. When you receive the title, you turn it over to your buyer.
It is important to remember that you don’t necessarily have to wait until the lease is ending. You can exercise your option to buy at any time. If your lease has some time to go, you’ll have to ask the leasing company about the buyout price. For more information, visit Chapman Acura in Tucson.
